Roche chief compares waiving vaccine patents to East German nationalisation

Roche chief executive Severin Schwan has warned that waiving Covid-19 vaccine patents would be a "catastrophe" comparable to East Germany's nationalisation of drugmakers.

Schwan said the US-backed proposal to allow free access to pharmaceutical companies’ intellectual property in a bid to boost vaccine production would be “counterproductive” and would not solve supply shortages.

The Biden administration’s decision to back a proposal to waive patents on Covid-19 vaccines during the pandemic surprised many and has negatively affected the share price of vaccine makers.

The US sided with countries including India and South Africa, which believe that suspending the agreement known as Trade-Related Aspects of Intellectual Property Rights, or Trips, could enable more manufacturers to produce vaccines.

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But the pharmaceutical industry has vehemently criticised the move, arguing that it is bottlenecks in raw materials, a congested supply chain and a shortage of technical expertise that are limiting the number of vaccine doses, not intellectual property.

Schwan told the Financial Times that the alternative to incentivising innovation was nationalising an industry, an approach that failed in the former East Germany, which used to be known as the "pharmacy of the world".

“We had enough experiments in the 20th century nationalising the industry and we know what came out of that,” he said.

He accused those behind the plan of trying to “gain some brownie points with some institutions in the short term, even if it is very harmful for mankind in the long term”.

“This will be harmful for my children and grandchildren when I’m not CEO any more,” Schwan said.

The original proposal also included waiving intellectual property on other Covid-19 related products, including tests.

Roche, which also operates in Ireland, does not make vaccines but it has been an important player in providing Covid-19 tests and medicines, including its anti-inflammatory drug Actemra, which has been used to treat Covid-19 patients, and in antibody therapy at Regeneron.

The Dutch government accused Roche last year of hoarding the recipe needed to make its reagent, which is used for PCR testing, the gold standard diagnostics for Covid-19 and other viral diseases. Roche denied this and said its reagent was no longer patented and that the shortage was caused by a tight supply chain.

Now, there was “oversupply” and competition in the market was lowering the price of tests, Schwan added. – Copyright The Financial Times Limited 2021