On October 23, PhRMA submitted comments to the Office of the United States Trade Representative (USTR) to inform USTR’s 2024 National Trade Estimate (NTE) Report on Foreign Trade Barriers. In addition to documenting multiple foreign trade barriers that threaten American jobs and leadership in the biopharmaceutical sector, our comments highlight how USTR’s policies are failing to protect American innovation abroad.
PhRMA’s submission emphasizes:
- The biopharmaceutical industry’s robust U.S. economic footprint. America’s biopharmaceutical industry leads the world in research, development and manufacturing of medicines and is a key driver of the U.S. economy, adding $1.4 trillion in total economic impact. The industry supports nearly 4.5 million American jobs and employs more manufacturing workers than each of the iron and steel, aerospace, petroleum and coal, and electric equipment and appliances industries. This large U.S. economic footprint depends not only on strong domestic policies, but also on fair and open access to global markets and robust protection of American intellectual property (IP) against unfair use by foreign competitors.
- Barriers to U.S. exports in countries throughout the world. As PhRMA’s submission highlights, multiple countries maintain trade barriers that disadvantage this critical industry and its large U.S. workforce. These include inadequate protection of American IP, government pricing policies that undervalue American innovation, discriminatory market access policies, burdensome and nontransparent regulations, and import restrictions on innovative medicines. These barriers threaten American jobs and more than $89 billion in annual U.S. exports of medicines to patients around the world.
- The Administration’s unambitious trade policy. Historically, Republican and Democratic administrations alike have sought to address these barriers by advancing trade policies and agreements that value innovation, protect IP and champion open trade. Unfortunately, the Biden administration has departed significantly from that approach by refusing to pursue comprehensive and ambitious trade agreements even with like-minded partners. Instead, the administration has pursued narrow economic dialogues that won’t deliver strong market access, IP and regulatory commitments, despite the continued proliferation of foreign trade barriers that inhibit U.S. biopharmaceutical exports.
- USTR’s unfortunate decision to weaken IP rights through the TRIPS waiver. In addition, in 2022 USTR agreed to waive obligations to protect IP rights under the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) for COVID-19 vaccines — a harmful and unnecessary decision. This TRIPS waiver decision was made despite the fact that TRIPS protections were essential to incentivize the development of American vaccines and the fact that a global surplus of vaccines existed at the time of the decision — and still does. The proposed expansion of the TRIPS waiver to COVID-19 therapeutics would further enable foreign competitors to effectively steal American IP — undercutting innovation and sending American research and manufacturing jobs overseas.
America’s biopharmaceutical workers urgently request that USTR reinstate America’s longstanding and bipartisan commitment to combatting foreign trade barriers and unfair policies abroad. At a minimum, this requires rejecting any expansion of the TRIPS waiver, enforcing existing trade rules and pursuing comprehensive and ambitious trade agreements that promote innovation and dismantle barriers to U.S. exports.