What happened?
On 5 May, Katherine Tai, the United States Trade Representative, announced the Biden administration's position on the proposal that India and South Africa submitted at the WTO: "The administration believes strongly in intellectual property protections, but in service of ending this pandemic, supports the waiver of those protections for Covid-19 vaccines." 

On 6 May, Ursula von der Leyen, the European Commission President, said she was considering the proposal. She said: "The European Union is also ready to discuss any proposal that addresses the crisis in an effective and pragmatic manner… ready to discuss how the US proposal for a waiver on intellectual property protection for COVID-19 vaccines could help achieve that objective." 

On 7 May, Albert Bourla, Pfizer's CEO, warned that the move "threatens to disrupt the flow of raw materials… will unleash a scramble for the critical inputs we require in order to make a safe and effective vaccine." 

What is the background?
First, the demand-supply imbalance. Advocates of the waiver believe there is a widespread imbalance in the demand for and supply of vaccines. Only a few companies have exclusive rights to manufacture vaccines. AstraZeneca and Johnson & Johnson had promised global manufacturing of vaccines but remain suspended. The Serum Institute of India, a key supplier for Asia, Africa, and South America stands prohibited from exporting by India. Huge global supply gaps mean many people in the developing world are not expected to receive vaccines until 2023. 

Second, the emerging debate on the relaxation of vaccine patents. The primary argument for the waiver is on the demand numbers; it emphasizes the ability to provide vaccines by increasing production in the poorer parts of the world lagging behind in their inoculation drives. The critics, however, argue that waiving patents will not increase production. Since countries would face hurdles with raw material access, distribution, and safety standards, they argue, it would eventually lead to the quality and efficacy of the vaccines being questioned. They also refer to the risk of imminent counterfeit doses. 

Third, the different positions of the US and the EU. The US strongly believes in intellectual property (IP) rights, but ending the pandemic is a greater need. The US has kept most doses produced domestically while exporting a portion to Mexico and Canada. This raises questions about the intent behind the sudden US support for the waiver. The EU thinks that the IP rights waiver can wait and suggest countries follow the bloc's example to permit ample export of doses. The US is backed by Australia and New Zealand while the EU by the UK, Japan, and Switzerland.

Fourth, the stance of the pharmaceutical industry. The industry is worried that the waiver would cut into their profits. To eliminate the need for a waiver, the companies consider alternate solutions like deals that increase vaccine supply to countries facing shortages – via donation or selling them on a non-profit basis. The drug industry now has strong motivation to shift the debate to that of a 'global equity problem' and is taking pragmatic steps towards solving this imbalance. 

What does this mean?
The crisis is enormous. The focus should be on steps making an immediate difference to the demand-supply imbalance countries face. As the immediate measures to meet vaccine requirements need to be prioritized. This needs to be addressed with the argument, that the waiver would disincentivize anyone from taking big risks in the face of future global health threats. A via-media is required.