Why Trade and Intellectual Property Matter

Why Trade and Intellectual Property Matter

08.13.12 | By Jay Taylor

If you are like most people, I suspect you don't spend much time thinking about how international trade negotiations affect your health, job or the economy. I can't blame you. It's all pretty complex stuff that occurs without much press coverage or commentary.

But the outcomes of these negotiations matter and they can affect your access to medicines, your job and our economy.

That's why the on-going Trans-Pacific Partnership (TPP) negotiations should be on your radar.

The TPP covers trade between the U.S. and many of the countries of the Pacific Rim. With U.S.-Pacific trade representing about 60% of all trade, these negotiations are critically important. And, if countries like Canada and Mexico - aspiring TPP members - are successful, it will be even more imperative to get the terms right.

The bottom-line is that the TPP negotiations could profoundly impact U.S.-based biopharmaceutical R&D and this country's ability to maintain its position as the global leader in developing innovative medicines.

Within the context of the negotiations, the Obama Administration - and all future administrations - must appropriately value the critical role that the biopharmaceutical research sector plays in the health of our people and the health of our economy. They need to protect intellectual property (IP) developed in the U.S. by U.S. companies. In the TPP negotiation, this means standing firm and securing robust biopharma IP provisions like those found in the Korea-US Free Trade Agreement, as well as 12 years of data protection for innovative biologics.

12 years of data protection for biologics is current U.S. law. That law exists for some pretty good reasons. Biopharmaceutical R&D is a costly, time consuming process requiring a huge investment. Twelve years of data protection is a wise policy designed to encourage investment by providing medicine makers time to recoup their R&D investment, while at the same time ensuring patient access to biologic medicines. This is essential because developing a new biological medicine can, on average, cost $1.2 billion and take anywhere from between 10 and 15 years to gain FDA approval for patient use - if a potential medicine is ever approved, as the vast majority of them don't even make it to the approval stage.

What's the economic impact of this R&D? It's substantial. A National Academy of Science report shows this sector's R&D investment represents an astonishing 20% of all domestic R&D funded by U.S. businesses. Additionally, this investment helps support 4 million American jobs.

More than the national scope of R&D, this is a major issue for many states, especially in difficult economic times. In 2011, U.S. biopharmaceutical exports totaled $47 billion. The impact on individual states was enormous. Indiana exported $6.1 billion in biopharmaceutical products; California over $5.5 billion; New York, over $3 billion; Illinois, nearly $2 billion.

All states are hurting, and increasing biopharmaceutical exports are critical to economic recovery. Recognizing this, the Obama Administration should place a high priority on a TPP negotiation that fosters domestic investment, rewards R&D risk-taking and promotes medical innovation.

That is what protecting U.S.-developed biopharmaceutical IP does. That is why success in the current round of TPP negotiations is so important.

Finally, as with all discussion of the biopharmaceutical research sector, it always comes back to patients. American leadership in biopharmaceutical R&D and the resulting new therapies and treatments benefit American patients. Because so much R&D is done domestically, U.S. patients often get access to innovative treatments well before patients in the rest of the world. However, strong biopharma IP protections are not a barrier to access in the rest of the world. The progress made in developing new HIV/AIDS treatments and their wide availability globally help demonstrate how good IP protections can reward R&D investment and improve therapies available to patients.

In short, strong biopharmaceutical IP provisions, including 12 years of biologic data protection in the TPP would be a negotiation win for patients here in the U.S. and around the world.

Note from The Catalyst Editors: Jay Taylor currently serves as Vice President of International Affairs for PhRMA.

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