Shot to bits: Pfizer and Moderna CEOs speak out as shares plummet after Meghan and Harry back Biden move to waive vaccine patents for poorer countries
It comes just hours after Prince Harry and Meghan Markle penned an open letter to vaccine makers urging them to suspend the patent protections to help developing countries gain access to the shots.
Shares for vaccine makers Pfizer and Moderna tumbled on Thursday, following the Biden administrations announcement that it supports waiving the protections during the pandemic.
'It is so wrong,' Pfizer CEO Albert Bourla said of Biden's support of waivers on legal protections to keep his firm's Covid vaccine formula secret in a Wall Street Journal interview.
Pfizer has spent the past year securing supply lines and ramping up production for the vaccine, and punishing the firm by taking away firms' exclusive rights to their vaccine formulas would discourage biotech companies from creating treatments and innoculations for future pandemics, Bourla told the outlet.
On Tuesday, Pfizer said it had made $3.46 billion in first-quarter vaccine sales. The New York Times estimated that would come out to about $900 million in pretax profits from vaccines in the past three months alone.
Pfizer shares were down just shy of one percent on Thursday afternoon, while its partner BioNtech's shares slipped 1.62 percent. Moderna recovered slightly by the end of the day Thursday, after its share price plummeted 12 percent earlier on.
In addition to the Duke and Duchess of Sussex, many public health advocates say vaccine makers should allow other countries to use their Covid vaccine formulas to make their own cheaper versions of the shots, regardless of the effect on their future profits.
The initial push to suspend patents was made by South Africa and India, both poorer nations in the midst of Covid crises. India in particular has become a global epicenter of the pandemic, and recorded nearly 4,000 coronavirus fatalities yesterday - a record for the hard-hit nation.
But experts - both within and outside of the vaccine-making firms - argue that opening the patent books won't actually get Covid vaccines to countries in crisis like India any time soon.
Germany agrees, with Chancellor Angela Merkel's office reiterating the argument that waiving patents won't help boost production in the short-term, and could hamper innovation in the longer-term.
Biden's patent waiver support has triggered the first major clash between the U.S. and Germany since Biden took office, the Guardian reported.
Pfizer CEO Albert Bourla (left) hit out at the Biden administration's support for waiving intellectual property protections to allow poorer countries to produce vaccines developed by companies like it and Moderna, potentially cutting into their profits
Pfizer shares were down just shy of one percent on Thursday afternoon
Moderna's shares recovered slightly by the end of the day Thursday, after its share price plummeted 12 percent earlier on
Prince Harry and Meghan Markle (left) penned an open letter to vaccine makers urging them to suspend the patent protections to help developing countries gain access to the shots. But Biden's patent waiver support has triggered the first major clash between the U.S. and Germany's Chancellor Angela Merkel (right), who opposes patent waivers, since Biden took office, the Guardian reported
Prince Harry and Meghan Markle penned an open letter to vaccine makers urging them to suspend the patent protections to help developing countries gain access to the shots. Visitors to the Archewell website are greeted with this picture along with a message saying: 'Join us in advocating for vaccine equity on Archie's birthday'
'The U.S. suggestion for the lifting of patent protection for COVID-19 vaccines has significant implications for vaccine production as a whole' a spokesperson for the German government told the outlet.
'The limiting factors in the production of vaccines are the production capacities and the high quality standards, and not patents.'
Germany is joined by the UK, Canada and the EU. The four wealthy countries are among the final holdouts against the World Trade Organization's (WTO) push to 'free the vaccines,' as protestors and advocates dubbed the suspension of patents.
The WTO only enacts its policies with consensus from its 159 member countries, so the rift between the U.S. and Germany stands to turn the discussion to a stalemate.
Contrary to rallying cries from Harry, Meghan and various NGOs, 'freeing the vaccine' is not likely to offer the world a new deluge of available doses any time soon.
Suspending patent enforcement for vaccines 'will not increase the number of doses we will have available within the next 12 months,' Dr Özlem Türeci, Chief Medical Officer at Pfizer partner BioNTech, told CNN.
'It will probably act towards increasing chaos in production.'
The Biden administration said on Tuesday that it backs a World Trade Organization (WTO) initiative to temporarily waive patent and trade secret laws preventing some countries like India and South Africa from making their own copycat versions of various companies' vaccines.
Prince Harry and Meghan Markle followed up with their own pressure upon companies to sacrifice potential profits to potentially help other countries make vaccines.
Advocates say that letting poorer nations make their own cheaper generics as soon as possible could be a critical boon to global vaccine supply.
The lengthy note, published to Global Citizen, asks the vaccine bosses to 'act with extraordinary purpose, responsibility, and leadership' in response to a 'equity crisis' and use 'every possible measure to increase global supply.'
Critics say waiving protections would be a symbolic gesture, and argue that even with the secret formulas used to make vaccines like Pfizer's, most countries still would not be able to quickly produce meaningful amounts of vaccine and their attempts could strain the already stretched supply chain of materials.
Most experts say that the patent waiver likely won't do much for supply and the immediate fight against Covid crises like India's, which killed a record nearly 4,000 people on Wednesday.
However, waiving patents in combination with other efforts could help combat the pandemic, especially down the line - and scientists anticipate coronavirus vaccines will be part of the global annual routine for years to come.
Pfizer has spent the past year securing supply lines and ramping up production for the vaccine. Pictured: A man receives a vaccine at a mass vaccination site in Los Angeles on Thursday
Suspending patent enforcement for vaccines 'will not increase the number of doses we will have available within the next 12 months,' Dr Özlem Türeci, Chief Medical Officer at Pfizer partner BioNTech and co-developer of its vaccine, told CNN (pictured; file)
The Biden administration said on Tuesday that it backs a World Trade Organization (WTO) initiative to temporarily waive patent and trade secret laws preventing some countries like India and South Africa from making their own copycat versions of vaccines like those made by Pfizer/BioNTech and Moderna
The Biden administration said Wednesday it supports waiving intellectual property rights for COVID-19 vaccines so that other countries can make their own versions of the shots That's why Moderna, which said in October it would not enforce its Covid vaccine patents, is unconcerned about the prospective waiver, and believes countries will continue to purchase its shot for years to come.
'They will have to go run a clinical trial, get the data, get the product approved and scale manufacturing. This does not happen in 6 or 12 or 18 months,' Moderna Chief Executive Stephane Bancel said on a post-earnings conference call.
Manufacturing an mRNA vaccine is not as simple as following a recipe, even if you have it in hand.
The shots require niche ingredients, which have to be sourced and transported across the world to highly specialized production plants - and various phases typically take place in different facilities.
And to do that at scale is a massive undertaking on top of a massive undertaking.
Even for Moderna, one of the leaders in the development of mRNA vaccine technology, it's been a challenge.
Moderna has faced its own hurdles scaling up production with some shortfalls in the manufacturing supply chain, which includes Swiss contract manufacturer Lonza Group, leading to delivery delays in Europe.
Bancel said he has had to tell some countries, 'we're very sorry. We have no more supply for you in 2021.'
In theory, that's a problem that waiving patents could help solve, but in practice freeing up intellectual property alone may not do much.
'Patents are not the limiting factor for the production of, for example, our vaccine,' Dr Tureci told CNN.
'There are a number of important factors in producing vaccines.
'For example, our manufacturing process involves more than 50,000 steps, all of which have to be executed accurately in order to ensure the efficacy and safety of vaccine.
'It takes experienced personnel, it takes specialized facilities, it takes access to raw materials.'
And then there's the matter of money.
Waiving intellectual property protections could cut into profits for vaccine makers like Pfizer, Moderna and Johnson & Johnson, for whom business has boomed amid the pandemic.
Johnson & Johnson reported $100 million in vaccine sales - despite the 11-day pause on the shot in the U.S. - and Moderna will report earnings on Thursday.
On Thursday, Shares of COVID-19 vaccine makers fell on Thursday as governments debated plans to waive patent protection for the shots, with analysts saying the move could rattle investor sentiment or weigh on longer-term business prospects.
Among companies with COVID-19 vaccines, shares of Pfizer fell 1.7 percent and were among the biggest weights on the benchmark S&P 500 index, while U.S. shares of its German partner BioNTech SE shed 0.6 percent after falling as much as 15 percent earlier.
Moderna was off 1.3 percent, recovering after being down nearly 12 percent, while Johnson & Johnson and AstraZeneca Plc were little changed, as the broad S&P 500 rose 0.2 percent.
Whether or not a temporary waiver on patents would significantly reduce global demand for the current Covid vaccinemakers product, the pharmaceutical industry is concerned it could lead to the undoing the tightly wound laws that protect intellectual property worth several fortunes.
'In the midst of a deadly pandemic, the Biden Administration has taken an unprecedented step that will undermine our global response to the pandemic and compromise safety.
This decision will sow confusion between public and private partners, further weaken already strained supply chains and foster the proliferation of counterfeit vaccines,' Stephen Ubl, head of PhRMA, the industry's trade group told Stat.
Public health advocates look at the Biden administration's new position more favorably.
'My take is: By itself, it will not get us much benefit in increased manufacturing capacity,' Prashant Yadav a senior fellow specializing in supply chains at the Center for Global development told Stat.
'But as part of a larger package, it can.'
Either way, patents will only formally be waived if all of the WTO countries agree to it.
As of Thursday afternoon, the UK, Canada and the EU were still blocking a consensus to waive patents.
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