Against Biden’s vaccine patent suspension, pharmaceutical companies argue that it undermines risk-taking and innovation. This argument is based on false premises. Studies have found that subsidies from patents account for only 30% of R&D costs for the pharmaceutical industry. In the case of Covid-19, vaccine producers have received much more than this amount from government grants and advance market commitments. The Oxford/AstraZeneca vaccine, for example, received 97% of its funding from public sources. There is no economic necessity for them to recover their fixed costs through patents.
More generally, historical evidence is against them. There has been no obvious increase in R&D spending despite the number of patent approvals more than quadrupling between 1983 and 2010. A study, comparing genes sequenced by the private firm Celera and the public Human Genome Project, found that Celera’s IP led to a 30% reduction in subsequent scientific and product development outcomes.