An illustration promoting the Chinese Communist Virus (COVID-19) vaccine.
Shares of major pharmaceutical companies fell for the first time on Wednesday (5) after U.S. President Joe Biden expressed support for a proposal to exempt intellectual property rights for the Chinese Communist virus (COVID-19) vaccine. The next day, shares of Chinese vaccine makers also plummeted as investors put the brakes on urgently to reassess their previously high valuations.
“This is a global health crisis that requires special measures for the unique circumstances of the COVID-19 pandemic.” U.S. Trade Representative Katherine Tai wrote in a statement that “the administration stands by intellectual property protections, but supports waiving these protections for the COVID-19 vaccine in order to end the pandemic.”
Biden said Wednesday he supports the waiver amid growing concern that a major outbreak in India could allow drug-resistant strains of the deadly virus to flourish and derail the global recovery.
World Trade Organization leaders this week urged members to reach a swift agreement on temporarily easing intellectual property protections for Chinese communist virus vaccines, an exemption proposed by South Africa and India that could remove barriers to greater vaccine production in developing countries. But it could take months for the WTO to finalize the agreement, which would require consensus among all 164 members.
Shares of major U.S. pharmaceutical companies that produce vaccines fell sharply for the first time after news broke that the Biden administration supported the vaccine IP exemption, with Pfizer closing the day flat and biotech company Moderna’s shares down 6.1 percent; Johnson & Johnson fell a modest 0.4 percent.
The vaccine intellectual property exemption also affected Chinese vaccine makers, with shares of CanSino Biologics Inc, which makes a single-dose vaccine against the common virus, falling 16.91% in Shanghai and the company’s Hong Kong shares falling even more sharply, diving nearly 22% at one point.
Shares of Shanghai-based Fosun Pharmaceutical Group fell below the 10 percent daily maximum limit for declines, and the CSI 300 health care subindex fell more than 5 percent.
A Beijing-based fund manager said the vaccine patent exemption will certainly have some impact on domestic Chinese makers of CCP virus vaccines, as it will increase the global supply of vaccines.
Previously, vaccine stocks in China surged, spurred by worsening outbreaks in other countries such as India, with China’s health care subindex jumping nearly 11 percent last month. The healthcare sector’s price-to-earnings ratio was above 62 times as of April 30, compared with about 21 times for the Shanghai and Shenzhen stock exchanges as a whole, according to data from China Securities, Index Co.
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