The share prices of global pharmaceutical giants producing vaccines have tumbled after the Joe Biden administration backed the proposal moved by India and South Africa to waive patents on Covid-19 vaccines.
The development hit shares of big pharmaceutical groups late in the trading day on Wall Street on Wednesday. Moderna, BioNTech and Novavax closed down by between 3 and 6 per cent, according to a report in the Financial Times.
Shares in Chinese makers of Covid-19 vaccines also crashed in afternoon trading on Thursday, Fosun Pharma lost 9 per cent, CanSino Biologics 14 per cent and Walvax Biotechnology 10 per cent. ChiNext, a tech-focused index of companies listed in Shenzhen, fell 2.2 per cent while the broader CSI 300 of China’s biggest stocks dropped 1.1 per cent, the FT report said.
The markets have reacted as the huge profits that Big Pharma was eyeing through sales of vaccines will be eroded since other companies will also be able to manufacture these doses once the proposal goes through.
A temporary waiver on their patent rights allowing other companies to make the vaccines will hit their profits and this is being reflected in the fall in stock prices as well, according to market analysts.
Close to 60 countries have now supported the proposal for the temporary suspension of Intellectual Property Rights on Covid vaccines to increase production amid the acute shortage of doses worldwide.
The less developed countries have currently got access to less than 1% of the vaccines and unless the production is increased to provide them with more doses humankind cannot win the fight against the coronavirus pandemic that is wreaking havoc with lives and livelihoods.