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Europe hesitates on vaccine patent easing

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Total global cases: 156.0m

Total doses given: 1.2bn

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Some experts question the utility of waiving patents

The US administration’s decision to back a patent waiver for Covid-19 vaccines has met with hesitation in Europe, particularly in countries with large pharmaceutical sectors, such as Switzerland.

Angela Merkel, the German chancellor, warned it would have “serious implications” for vaccine production worldwide and said the limiting factors in supply were “production capacities and the high-quality standards, not the patents”.

African health officials celebrated what one called a “bold and wonderful” breakthrough, with African Union officials hoping at least three countries — South Africa, Senegal and Rwanda — would develop the capacity to produce vaccines for the continent.

But Stéphane Bancel, Moderna’s chief executive, argued there were not enough production sites or skilled workers to be able to increase the supply of mRNA vaccines rapidly. He said focusing efforts on expanding manufacturing within companies that already had the technology and knowledge was the fastest and most effective way to supply the world.

Alan Beattie writes in the FT’s Trade Secrets: “Given the time (months at least) it will take to negotiate a waiver, in practice we can imagine the US initiative mainly being used by governments to put pressure on pharmaceutical companies to do better on licensing and transferring technology, which are far bigger constraints than patents in producing Covid-19 vaccines.”

And finally, in an FT analysis of whether a suspension of Covid vaccine patents would lead to more jabs? Sir Robin Jacob, chair of intellectual property law at University College London, said: “There’s almost nobody you could license to. They couldn’t do it — you need a huge plant, huge skills, patent or not, it doesn’t matter,” Jacob said.

Global economy

The US labour market added just 266,000 jobs last month and the unemployment rate edged up to 6.1 per cent, marking an unexpected deceleration in job creation in the world’s largest economy. The lacklustre jump is likely to remove pressure on the Federal Reserve to hasten deliberations on withdrawing monetary support for the recovery.

A spate of deals in the business travel industry has raised the prospect of rapid consolidation across the sector as it attempts to buffer a permanent fall in corporate demand. Expedia has agreed to sell Egencia to American Express Global Business Travel; TripActions is buying UK-based specialist Reed & Mackay; and TravelPerk said it had raised $160m in equity and debt to fund new acquisitions.

The UK government will miss out on tax revenues of up to £12bn unless urgent action is taken to support London’s recovery by attracting people back to the city and boosting transport infrastructure, a business lobby group has warned.

Business

The World Health Organization is set to add Sinopharm’s Beijing vaccine to its list of approved coronavirus jabs, people familiar with the matter said, in a boost for the Chinese-made shot amid doubts over its efficacy. The emergency use listing for a two-shot regimen for adults would be the first from China.

The owner of British Airways urged ministers to be more ambitious in reopening international borders as it warned it would only fly 25 per cent of its normal schedules in the run-up to the busy summer season. International Airlines Group flew just 20 per cent of normal flight schedules in the first quarter, and revenue fell 79 per cent year on year to €968m. 

Map showing rising property prices in the North West, annual % change in house prices to Mar 2021, by postcode area

The pandemic has done little to damp the UK’s buy-to-let market, but activity is shifting away from London. Some 37,000 mortgages were completed in the second half of 2020, similar to the same period in 2019. A similar number of homes changed hands “off-market” in the first quarter of this year, compared with 20,830 in the same period in 2019.

Markets

Line chart of German 10-year yield (%) showing The end of the Bund rally?

Bunds, Germany’s sovereign bonds, are the foundation of European markets and a benchmark for the determining prices on the continent’s assets. But investors are turning against them, sparking forecasts that decades of stunning gains for Europe’s ultimate safe asset is at an end.

The prospect of governments “crowding out” other borrowers by competing for funding, pushing interest rates higher and squeezing out private investment might seem a distant concern. But it remains a risk, writes Michala Marcussen, group chief economist at Société Générale.

Copper prices hit a record high on Friday in the latest leg of a broad rally across commodity markets sparked by the reopening of major economies and booming demand for minerals needed for the green energy transition. They rose as much as 1.4 per cent to $10,361 a tonne, surpassing the previous peak set in 2011.

Have your say

The race to develop a child-friendly vaccines

In response to the article Should children be vaccinated to slow the spread of coronavirus? reader FJLsss writes:

Before the adults across the globe have been vaccinated it is just very selfish of the west to go for their kids. Use it where impact is the greatest.
Want to save kids? Lower traffic to 10mph in all populated places. Give them free education including university. Fine parents who have obese kids, as being fat will definitely be more risky.

Final thought

The Nobel-winning psychologist Daniel Kahneman tells Tim Harford over lunch with the FT that while his best-selling book Thinking, Fast and Slow focused on bias in decision-making, his new one explores another source of error: noise.


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