Investment in U.S. biotechnology could be about to plummet, with major implications for future innovation. It all depends on the outcome of a February meeting of the World Trade Organization, and what the Biden administration decides to do there.
The WTO is considering a TRIPS proposal that would waive global patent protections on Covid-19 tests and treatments. Since the WTO makes decisions by consensus, the proposal can only become policy if the United States gives it a green light. The White House is still playing its cards close to its chest, but if the policy goes ahead, the impact of lost investment in medical discovery could be devastating.
Patents and other intellectual property protections give inventors the exclusive right to make and sell their creations for a set period of time. For investors, these rights provide certainty that after the financially risky process of product development, companies will have a shot at earning a return.
