U.S. must address IP and market access barriers abroad to protect American innovation

PhRMA recently submitted comments to the Office of the U.S. Trade Representative (USTR)’s 2023 Special 301 Report. The comments highlight foreign government actions and policies that undermine American innovation, biopharmaceutical leadership and more than 4.4 million American jobs.  

Durable intellectual property (IP) and market access policies abroad increase patient access to medicines, improve public health, support American jobs and foster innovation. Throughout the COVID‑19 pandemic, the unprecedented worldwide collaborations and partnerships among industry, researchers, governments and other organizations have delivered numerous COVID-19 treatments and vaccines in record time, with supply even exceeding demand.

Despite the major accomplishment by American innovators, World Trade Organization (WTO) members, including the United States, agreed to waive obligations to protect IP rights under the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) for COVID-19 vaccines. The decision, championed by foreign governments historically and consistently opposed to the TRIPS Agreement, alienated allied economies that support strong IP policies abroad and provided political cover for other governments to advance legislation eroding national IP systems. PhRMA and its members urge USTR to reaffirm the bipartisan and longstanding commitment to protecting American innovation by defending against further erosion of IP and enforcing existing rules with key trading partners.

Moreover, damaging market access policies and pharmaceutical incentives legislation in leading markets threaten patient access to and investment in innovation. For example, Japan has implemented more than 50 pricing rule changes over the past few years that have significantly destabilized its innovation ecosystem and often lack transparency. Pending proposals to condition IP incentives on product launches in all EU member states will only further discourage research and development and harm patient access to new medicines and treatments. Currently, about 85% of new medicines launched between 2012 and 2021 are available in the United States, compared to just 61% in Germany, 59% in the United Kingdom, 52% in France and Italy, and 51% in Japan, according to PhRMA analysis.

Despite clear commitments made in trade agreements, U.S. trading partners have yet to implement needed reforms. For example, Korea has not adopted market access policies that are transparent and appropriately value American-made innovative medicines as required by the U.S.-Korea Free Trade Agreement. Mexico has yet to implement key IP provisions of the United States-Mexico-Canada Agreement. USTR has repeatedly highlighted trade agreement enforcement deficiencies in its annual reports and we encourage the Administration to resolve these trade barriers.

As we’ve seen, foreign trading partners that deny adequate and effective protection of IP rights, or deny fair and equitable market access, significantly threaten the ability of the American biopharmaceutical industry to develop and export life-saving treatments and cures. To champion continued U.S. leadership in innovation, and the resulting U.S. economic benefits that it brings, the United States must hold trading partners accountable to their commitments and facilitate policy environments that promote and enable tomorrow’s treatments and cures.