Biden administration must protect U.S. biotech firms from foreign rivals

If Washington is unwilling to protect intellectual property and incentivize innovation, our biotech sector will cede prominence to China and other rivals.

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A health worker administers a dose of CanSino Biologics inhalable COVID-19 coronavirus vaccine in China on Nov. 3, 2022.

A health worker administers a dose of CanSino Biologics inhalable COVID-19 coronavirus vaccine in China on Nov. 3.

STR/AFP via Getty Images

The Chinese biotech firm CanSino just developed an inhalable COVID-19 vaccine, beating out American companies. CanSino’s inoculation reportedly triggers an immune response in people’s nasal linings — the first part of the body to come in contact with the virus. Doctors hope these needle-free vaccines will kill the virus on contact and prevent infections entirely, rather than merely reducing their severity.

The breakthrough is a feather in China’s cap, at a time when the economic competition between Washington and Beijing is at an all-time high. For years, Chinese leaders have poured immense resources into their domestic biotechnology sector. Those investments are clearly bearing fruit.

Oddly enough, our own leaders recently gave Chinese companies an immense handout, and at the expense of U.S. firms.

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America is home to the world’s most brilliant scientists. But brain power alone doesn’t guarantee medical progress. Research companies, and the investors that back them, need to have sufficient incentives to invest in new medicines. But the Biden administration recently undermined those incentives, perhaps without fully appreciating the consequences.

Nearly 30 years ago, the World Trade Organization (WTO) members reached a landmark agreement to set certain minimum standards for intellectual property (IP) protections, including patents on vaccines.

In fall 2020, before any COVID-19 vaccines were even approved, India and South Africa petitioned the WTO to waive those minimum IP protections. They argued IP protections would delay the delivery of shots to poor nations.

Their argument was ridiculous from the start, considering that vaccine developers had inked hundreds of voluntary licensing deals and manufacturing partnerships to turbocharge production on an unprecedentedly short timeline, and that manufacturers and wealthy governments had already committed to providing hundreds of millions of doses to the developing world at low or no cost.

Their claims became even more nonsensical last year, after it had become clear those voluntary partnerships had generated a global surplus of vaccines, with millions of doses spoiling unused in developing countries.

Nevertheless, in June 2022, the Biden administration endorsed the WTO’s approval of the IP waiver, which could force American firms to hand over billions of dollars worth of technology for free. The waiver doesn’t include any binding prohibitions on Chinese firms accessing that IP. To make matters worse, the WTO is considering expanding the waiver to COVID-19 diagnostics and therapeutics in December.

That’s a sword of Damocles dangling over American companies’ heads. What biotech executive or investor in his right mind would pour hundreds of millions, or even billions, of dollars into further research if IP rights are no longer secure internationally, and foreign rivals can help themselves to the fruits of American scientists’ labor?

Of course, the current administration doesn’t deserve all of the blame. As part of a $47 billion supplemental funding request earlier this month, the White House asked Congress for $8 billion to help finance research into next-generation vaccines and therapeutics, with potential application well beyond COVID. But some lawmakers are balking at the package, which remains stalled.

This combination of hostility to IP rights and apathy towards research funding certainly does nothing for long-term sustainability and may well prove disastrous for public health. 

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What comes of this CanSino development will be telling. While our current vaccines are highly effective in reducing the risk of hospitalization or death, they don’t do much to reduce the risk of sickness or transmission. That’s because injected vaccines aren’t as concentrated in the mucosal areas of the nose and mouth through which transmission proceeds.

With inhalable vaccines, antibodies are present in large numbers, where they can attack a virus as it enters through the nose or mouth. Scientists believe this reaction could have a breakthrough effect in slowing or halting transmission and preventing even mild symptoms. The technology is also potentially applicable to other airborne pathogens

In short, we need to be at the forefront of its development. But ultimately, if Washington is unwilling to protect intellectual property and incentivize innovation, our biotech sector will cede prominence to China and other rivals.

If policymakers want to protect patients, they first need to protect patents.

Kenneth E. Thorpe is chair of the Department of Health Policy and Management at the Rollins School of Public Health, Emory University. He is also chairman of the Partnership to Fight Chronic Disease.

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