U.S. Negotiators on TPP -- Don't Trade Away the Biopharmaceutical Research Sector

by McDonnell Boehnen Hulbert & Berghoff LLP

[authors: James C. Greenwood and John J. Castellani]

Biotechnology Industry Organization (BIO)How do we create success in an age of fierce competition and accelerating globalization?  America no longer has a lock on any industry or technology.  That is why it is important to do all we can to sustain America's global leadership in biopharmaceutical research and development which provides quicker access to innovative medicines, jobs and economic growth to build stronger communities, and new technologies, spin-off industries and a stream of exports to keep America competitive for decades to come.

PhRMA #2To secure America's continuing biopharmaceutical leadership, policymakers must not trade away the economic and systemic advantages that made our sector the world-leader.  We need public policies and incentives that support and grow the biopharmaceutical sector domestically and promote access to global markets.

The Obama Administration must protect intellectual property (IP) in ongoing trade negotiations.  A critical issue at the center of far-reaching Trans-Pacific Partnership (TPP) negotiations is biologics data protection.  Biologics are pharmaceutical products that are generally derived from living material -- human, animal, or microorganism.  Many future therapies will depend on the ability of our innovative companies to produce these complex, life-saving medicines.  This was recognized by overwhelming bipartisan support for a provision in the healthcare reform law that provided a 12-year period during which competitors' products may not be approved on the basis of the complex scientific data generated by a biologic product's inventor.  This provision fosters new biopharmaceutical R&D by giving companies time to recoup their significant investment while providing patients with access to innovative biopharmaceutical products.

As U.S. negotiators sit down with other TPP parties and those who may soon join these talks, including Canada and Mexico, it is essential that they secure strong IP provisions that reflect U.S. law, including the 12 years of data protection for biologics.  For decades, U.S. negotiators have worked tirelessly to bring other countries up to the IP protection standards that we have in the U.S. This is no time to change course.

There is a lot at stake in these negotiations.

First is America's global leadership in developing innovative medicines.  Since 2000, the U.S. Food and Drug Administration (FDA) has approved nearly 400 new medicines for patient use -- most pioneered in the U.S.  There are more than 3,000 new medicines to treat a wide range of conditions and rare diseases in late-stage development or pending FDA approval.  These include therapies to treat the diseases that plague us and our loved ones, including Alzheimer's, cancer, HIV/AIDS and many more.  These compounds are being developed across the country by literally hundreds of American companies, from large global firms to small biotech start-ups.

Next, there is the economic impact.  A National Academy of Sciences study shows this sector's R&D investment represents an astonishing 20% of all domestic R&D funded by U.S. businesses.  This investment supports 4 million direct and indirect American jobs.  These are good-paying jobs that help to build and grow local, state and the national economies.

Finally, there is the contribution to America's exports.  Today, nearly 60 % of U.S. trade is with countries in the Asia-Pacific market.  This will grow so long as American companies can compete and their IP is respected.  Holding firm on 12 years of biologics data protection is a four-fold win:  bringing cutting-edge medicines to patients, fostering a critical American industry, bolstering exports, and keeping America competitive in global markets.

Strong IP protections are not barriers to access.  The progress made in developing new HIV/AIDS treatments and their wide availability globally help demonstrate how IP protections can simultaneously reward R&D investment and improve therapies available to patients worldwide.  As our trading partners, through contexts like the TPP, work to strengthen their IP systems, they will provide the necessary platforms for local innovators, spurring greater global competition that will ultimately benefit the world's patients.

The bottom-line is that the biopharmaceutical research sector is a national asset and is essential to our health and economic future.  If we fail to act, including in the current TPP negotiations, there will be profound consequences -- for patient access to innovative medicines as well as for our economy.

American global leadership in biopharmaceutical research is not a given.  Our international competitors understand the value of a strong biopharmaceutical research sector, the patients it helps and the jobs it creates.  They are doing all they can to encourage domestic production and R&D.  Our companies at home work hard to stay the best and compete globally, but they can only continue doing so if American trade policies support and defend innovation and progress.

James C. Greenwood is the President & CEO of the Biotechnology Industry Organization (BIO) and John J. Castellani is the President & CEO of the Pharmaceutical Research and Manufacturers of America (PhRMA)


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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