PhRMA submission to USTR calls for urgent defense of American innovation abroad

The United States leads the world in medicine research, development and manufacturing, and international trade delivers those medicines to patients around the globe. But trade barriers imposed in many countries impede the ability of U.S. biopharmaceutical companies to export even more American-made medicines and employ even more scientists, researchers and factory workers.

PhRMA recently submitted comments to the U.S. Trade Representative (USTR) to inform its 2023 National Trade Estimate (NTE) Report on Foreign Trade Barriers. The comments highlight several trade barriers in multiple countries that threaten to undermine America’s biopharmaceutical leadership. These barriers include inadequate intellectual property (IP) protection of American innovation and a variety of policies that discriminate against American products. As discussed in the submission, America’s biopharmaceutical workers urgently request that USTR recommit to dismantling these barriers by challenging the unfair actions of U.S. competitors abroad.

America’s innovative biopharmaceutical sector continues to be one of the most manufacturing- and export-intensive in America. In 2021, U.S. biopharmaceutical goods exports exceeded $80 billion, and in 2020, the sector was the largest goods exporter among America’s most R&D-intensive industries, which also includes navigational equipment, semiconductors, medical equipment and communications equipment. The U.S. biopharmaceutical industry also is among the top five employers of U.S. manufacturing jobs, with more Americans directly employed in biopharmaceutical manufacturing than in manufacturing in each of the following: iron and steel, aerospace, petroleum and coal, and electric equipment and appliances.

Importantly, USTR itself must not encourage foreign competitors to take unfair advantage of American innovation. USTR recently 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, as well as the fact that a global surplus of vaccines existed at the time of the decision — and still does.

USTR’s decision to forfeit American IP to countries looking to undermine U.S. leadership in biomedical innovation runs counter to the President’s stated objectives concerning the growth of American infrastructure, innovation and employment. Any further effort by USTR to cede American IP to foreign countries is an effort to undercut American innovation and send American research and manufacturing jobs overseas. The innovative biopharmaceutical industry encourages the United States to reject any expansion of the TRIPS waiver and urges the administration instead to focus more seriously on solving well-documented challenges to distributing and administering the global surplus of vaccines and treatments.