The Biden administration gave Beijing a gift when it supported a petition to the World Trade Organization to force US developers of COVID-19 vaccines and treatments to abandon their intellectual property rights to these drugs.
China is expected to be the biggest winner of this initiative, which reflects the imbalance in the way the two global powers treat the world: the United States is generous and China is stubborn. A living example: Even if the United States provides its intellectual property rights in the WTO, China is strengthening its control over the accessibility of processed “manganese”, which makes the life of non-Chinese electric car manufacturers more difficult.
As part of its growth strategy, China is catching up with the United States in the high-tech sector. Although the US still controls 48% of the semiconductor market, China is not far behind. The same is true for 5G telecommunications. Since 2014, Huawei’s global market share in telecommunications equipment has increased by 40%. China is also home to SenseTime, the world’s highest-valued artificial intelligence startup. A Harvard University study called China “a full-scale competitor of the United States in the commercial and national security applications of artificial intelligence.”
The Chinese government seeks to take over the biotechnology sector led by American innovators. Biotechnology is included in its “Made in China 2025” plan, which lists 10 industries that China aims to dominate. The government intends to force anyone engaged in business in these areas in China to hand over technical know-how.
Abandoning the intellectual property protection of biomedical technology can have dire consequences. Most importantly, it destroys the foundation of biomedical innovation, which requires huge investments spanning many years to achieve results. Intellectual property protection assures innovators that they can recover these investments and make a profit. The loss of intellectual property protection will have a chilling effect on investment in the industry.
What is equally detrimental to the United States is that intellectual property exemptions will enable China to use American innovations to become a biotechnology power.
The intellectual property exemption for the COVID-19 vaccine will accelerate the “Made in China 2025” timetable. The use of mRNA technology that supports Pfizer-BioNTech and Moderna vaccines extends beyond this pandemic. It has the potential to treat cancer and other diseases. With the exemption, China and other countries will have the courage to apply the once-proprietary mRNA technology to a wider range of research and applications.
Is this in the interests of the United States?Mark Cohen, an expert on intellectual property theft in China, recently told Washington post The exemption would “provide a competitive advantage to countries that are increasingly seen as our opponents at the expense of taxpayers.”
In addition to the damage to US R&D investment by mRNA gifts, the exemption also sends a signal that every time a global crisis occurs, the US can agree to force US innovators to abandon trade secrets.
This attitude will hinder biopharmaceutical innovation. Small biotech companies lead 70% of the R&D pipeline and rely heavily on private investors to fund this work. If investors know that innovators may have to abandon their discoveries in the global crisis, they will deploy their funds elsewhere. This will make the R&D investment required to tackle infectious diseases (including drug-resistant infections and viruses) more difficult. The United States has benefited greatly from early access to COVID-19 treatment and vaccines, saving lives and accelerating economic recovery. Maintaining America’s leading position in biomedical innovation includes maintaining incentives that help it become a world leader.
Democratic Senator Chris Coons from Delaware, where President Biden is located, agrees. “If we simply open up the core intellectual property rights of these breakthrough developments to the world, I think we will face the risk of losing private sector investment and development, which is critical to this moment of personalized medicine.”
The final shortcoming of the waiver is the ability of American companies to find a cure for the next pandemic. One of the biggest threats is bacteria that are resistant to our current antibiotic pool, which will become the super bacteria that caused the pandemic. The market for new antibacterial drugs has been broken. Only a few biotech companies are developing them, and many biotech companies have gone bankrupt while trying to commercialize them.
“A lot of people are right, we now need to start thinking about preparing for the next pandemic,” points out Craig Garthwaite, a professor of healthcare business at Northwestern University. “The suspension of the intellectual property rights of vaccine manufacturers will send a completely wrong signal for the future.”
For patients around the world, American intellectual property must be protected. This is the only way to prevent the work of innovators in China and the United States.
From 2009 to 2019, Erik Paulsen represented Minnesota’s Third Congressional District in the U.S. House of Representatives.