Big Pharma Stocks Rebound After Germany's Merkel Speaks Out Against Vaccine Patent Waiver

After plunging to session lows this week in the wake of the Biden administration's endorsement of a patent waiver for Covid-19 vaccines, pharmaceutical company stocks rebounded strongly on Thursday after German Chancellor Angela Merkel spoke out against the proposal, further complicating the hopes of reaching consensus support at the World Trade Organization.

"Yes, Trump is gone, but Merkel wants to continue his inhumane legacy"
--Andrew Stroehlein, Human Rights Watch

Merkel told reporters that she believes "production capacities and the high-quality standards" of current coronavirus vaccines are the factors limiting global vaccine supply, "not the patents"--dismissing the role that restrictive intellectual property protections have played in preventing manufacturers around the world from making generic alternatives.

"The protection of intellectual property is a source of innovation and it must remain so in the future," Merkel added, echoing a common talking point of the pharmaceutical lobby.

The German leader's comments sent shares of BioNTech--Pfizer's Germany-based vaccine partner and a beneficiary of massive public funding--soaring to session highs on Thursday, an indication that investors believe Merkel's public comments against the temporary waiver strike a significant blow to the proposal's chances of approval at the WTO.

"Yes, Trump is gone, but Merkel wants to continue his inhumane legacy," Andrew Stroehlein, European media director at Human Rights Watch, tweeted Thursday, referring to the former U.S. president's opposition to the waiver.

As Bloomberg reported following Merkel's remarks on the proposed Trade-Related Aspects of Intellectual Property Rights (TRIPS) waiver, "Shanghai Fosun Pharmaceutical Group Co., which has the rights to develop and market BioNTech SE's shot in China, advanced as much as 7% in Hong Kong after sinking 14% the previous day."

"The Covid-19 vaccines have been developed by scientists from all over the world, thanks to basic science supported by numerous governments," they continued. "It is only proper that the people of the world should reap the benefits."
--Joseph Stiglitz, Lori Wallach

"On Friday, AstraZeneca Plc. rose again in London, gaining 0.4%, while French developer Valneva SE jumped 5.1%. Among U.S.-listed companies, CureVac NV advanced 5.9% in German trading from its closing price in New York, Novavax Inc. rose 2.6%, BioNTech climbed 1.7%, and Pfizer Inc. was little changed."

Merkel is hardly the lone remaining opponent of the patent waiver, which was first introduced by India and South Africa in October and has since gained urgency as global coronavirus infections soar to new highs, with the largely unvaccinated populations of developing countries bearing the brunt of the surge.

While Australia, New Zealand, and France joined the U.S. in supporting the waiver on Thursday, much of the European Union, Canada, and other rich countries remain opposed despite broad public support for the measure.

According to a survey released earlier this week by a global coalition of public health advocacy groups, 70% of the people of G7 nations want their governments to require pharmaceutical companies to share key vaccine technology and know-how with the rest of the world.

"This is complete madness," Stroehlein said of the continued stonewalling by rich countries. "We're wasting time, when time only gives the virus more opportunities to kill us. By blocking wider vaccine production globally, the E.U., U.K., and a few other laggards are boosting pharma companies' profits while people are suffering and dying."

Jayati Ghosh, an economics professor at the University of Massachusetts Amherst, said in response to Merkel's comments Thursday that "none of these arguments against the TRIPS waiver stands scrutiny."

"It's time for Germans and other Europeans to put pressure on their governments to support the TRIPS waiver during the pandemic," Ghosh added.

Fueled by the U.S. endorsement, new momentum behind the patent waiver comes amid artificially scarce global vaccine supply that is intensifying concerns over the potential emergence and spread of vaccine-resistant variants--a scenario that could prolong the global pandemic and result in countless additional deaths.

Writing for Project Syndicate on Thursday, Nobel Prize-winning economist Joseph Stiglitz and Public Citizen's Lori Wallach noted that "vaccine production is currently nowhere close to delivering the 10-15 billion doses needed to stop the spread of the virus"--a shortage the pair attributed to "efforts by vaccine manufacturers to maintain their monopoly control and profits."

"As for-profit entities, pharmaceutical corporations are focused primarily on earnings, not global health," Stiglitz and Wallach wrote. "Their goal is simple: to maintain as much market power as they can for as long as possible in order to maximize profits. Under these circumstances, it is incumbent on governments to intervene more directly in solving the vaccine supply problem."

"The Covid-19 vaccines have been developed by scientists from all over the world, thanks to basic science supported by numerous governments," they continued. "It is only proper that the people of the world should reap the benefits. This is a matter of morality and self-interest. We must not let drug companies put profits ahead of lives."