Guest's ViewOpinion

Biden’s Entreaty of the Defense Production Act (DPA) and COVID-19 Support for Vaccine Waiver

The Defense Production Act (DPA) was originally enacted in 1950 during the Korean War. It was inspired by two World War I&II-era laws that granted the president emergency powers to, among other things, enter into contracts and to require the prioritized fulfillment of those contracts over all others.

DPA is an Act to establish a system of priorities and allocations for materials and facilities, authorize the requisitioning thereof, provide financial assistance for expansion of productive capacity and supply, provide for price and wage stabilization, provide for the settlement of labor disputes, strengthen controls over credit, and by these measures facilitate the production of goods and services necessary for the national security, and for other purposes.

The original DPA included seven titles, four of which expired at the end of the Korean War in 1953, as detailed by the Congressional Research Service. Three of those titles have been reauthorized more than 50 times since then.

Title I of the DPA (“Priorities and Allocations”) allows the president to require persons and businesses to prioritize and accept government contracts for materials and services and to allocate the general distribution of materials, services and facilities to promote the national defense.

Title III of the DPA (“Expansion of Productive Capacity and Supply”) allows the executive to provide financial incentives—such as loans, loan guarantees, direct purchases and purchase commitments—to incentivize domestic manufacturers and to ensure that the federal government has the capacity to produce critical items.

Finally, Title VII of the DPA (“General Provisions”) establishes key definitions, covers rulemaking under the act and sets out the sunset provisions. It also provides a broader set of authorities for the executive to approve voluntary agreements among market competitors that may otherwise risk antitrust and contract liabilities.

President Trump first invoked the DPA in late March 2020 in response to the coronavirus pandemic and subsequently expanded his use of the act in follow-on executive orders and directives. These follow-on measures were focused on cracking down on hoarding of medical supplies, limiting the export of medical goods, increasing domestic production of masks and ventilators, providing financial support and loans necessary for purchases, and securing the nation’s food supply by declaring meat plants as critical infrastructure.

During his first week in office, President Biden signed two executive orders (13987 and 14001) designed to organize the administration’s whole-of-government approach to the coronavirus pandemic and to leverage the DPA to address critical national needs. The orders established the position of COVID-19 response coordinator, held by Jeff Zients, who is empowered to serve as the conduit for the administration’s coronavirus policies and, specifically, its utilizations of the DPA.

On Feb. 5, the Biden administration announced plans to leverage the Defense Production Act (DPA) to bolster vaccine production, boost the availability of at-home and point-of-care virus tests, and increase the supply of critical shortages in personnel protective equipment such as masks, shields and gloves. Alongside the use of the DPA, the Pentagon announced plans to deploy at least 1,000 active-duty military personnel throughout the country to support mass vaccination efforts.

on March 3, the President vowed to make enough vaccine doses available to vaccinate every U.S. adult by the end of May. White House Chief of Staff Ronald Klain suggested that this new vaccine production timeline was at least in part made possible by the DPA.

Most immediately, the Biden administration directed an inventory review of critical materials; treatments; and supplies, personal protective equipment and resources necessary to effectively produce and distribute tests and vaccines at scale. This part of the order also directed an evaluation of whether private industry could reasonably be expected to provide such supplies in a timely manner.

The second part of Biden’s order requests a determination of whether the use of reasonable pricing clauses in federal contracts can facilitate better purchase rates for state, local, tribal and territorial government buyers of the needed supplies.

Third, Biden’s order directs executive departments and agencies to provide a strategy to design, build and sustain a long-term capability to manufacture supplies for future pandemics and biological threats within 180 days of the order.

Finally, the executive order directs the secretary of health and human services to facilitate access to the Strategic National Stockpile for federally recognized tribal governments and health care providers.

the Biden administration plans to take a more hands-on approach and to directly engage with vaccine manufacturers to determine where bottlenecks exist and to leverage the DPA to help ease supply and production constraints.

The US announced its support for the lifting of patent protection for COVID-19 vaccines on Wednesday, following pressure from more than 100 developing-world countries at the World Trade Organization (WTO). Several EU countries and the UK had been against the move. Those nations previously blocked discussion of a patent waiver at the WTO’s Trade-Related Aspects of Intellectual Property Rights (TRIPS) council. Germany pushed back Thursday against President Joe Biden’s support for a patent waiver on COVID-19 vaccines, one of the first rich nations to explicitly oppose the move.

European Commission President Ursula von der Leyen told an online conference that the bloc is “ready to discuss” the US proposals. “The protection of intellectual property is a source of innovation and must remain so in the future,’ the statement said. “Our priority is to ramp up production to achieve global vaccination,” she wrote in a tweet. “At the same time we are open to discuss any other effective and pragmatic solution. In this context we are ready to assess how the US proposal could help achieve that objective.”

French President Emmanuel Macron had in the past objected to the waiver. But after the US announcement he changed tack, and said he was “absolutely in favor,”.

The reaction from the pharmaceutical industry was fierce. “This decision will disadvantage patients by undermining existing incentives to develop vaccines and therapeutics for future pandemics,” said Michelle McMurry-Heath, CEO of the Biotechnology Innovation Organization (BIO), a trade group that represents vaccine makers like Pfizer and Johnson & Johnson, as well as smaller biotech companies.

But Biden had been under mounting pressure from lawmakers in his own party to support the move: 110 Democratic House lawmakers wrote to him earlier this week in support of the waiver.“A pandemic is not the time to fuss over intellectual property rights; it is a time to come together and crush the virus around the world,” said a group of lawmakers said.

 

Author: Bighneswar Swain

Bighneswar Swain, NITR and University of California alumni. President NITROAA Florida Chapter, Head North America BIPM Practice- A leading IT Company. Trustee Shree Jagannath Chetna & Chintana worldwide. 

DISCLAIMER: This article reflects author’s view point. Goa Chronicle may or may not subscribe to views of the author

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