Placing Innovation at the Forefront of the U.S. Trade Agenda

Although we are not even a month into 2015, the U.S. trade agenda has already taken center stage and this coming week will prove to be no different. Less than 24 hours after returning from his trip to India with President Obama to further advance our trading relationship there, United States Trade Representative Michael Froman testified before both the U.S. Senate Finance Committee and the U.S. House of Representatives Ways & Means Committee on Tuesday about U.S. trade policy. If that was not enough activity for one week, chief negotiators from the 12 Pacific Rim nations currently developing the Trans-Pacific Partnership (TPP) trade agreement are meeting in New York this week to continue discussions on how to wrap up the agreement.

The need for the U.S. to craft a strong agreement on the TPP, especially as it relates to continued biopharmaceutical innovation in groundbreaking research, was strongly echoed on Capitol Hill during Tuesday’s hearings. At least five Senators and Congressmen, including Senate Finance Committee Chairman Orrin Hatch, commented directly to Ambassador Froman about the need for robust intellectual property protection for biologic medicines in order to continue progress in one of the most promising areas of medical research. The hearings starkly illustrated how many Congressional leaders recognize what is at stake in the TPP.

While there are many different issues that are currently vying for the TPP negotiators’ attention, including currency manipulation and environmental standards, protecting innovation should remain a top priority for the United States. Innovation is vital to American economic leadership and must be supported. Considering 95% of the world’s consumers live outside the U.S., our trade policy should strive for improved access to global markets so that other nations can reap the benefits of the new, innovative products that are consistently being developed and produced within our borders. 

That innovation is able to take place because of the strong intellectual property (IP) laws in the U.S. that recognize and value ingenuity.  IP cultivates innovation by protecting ideas and encouraging risk-takers to continually push boundaries and break barriers. The biopharmaceutical industry serves as a strong example of this concept. PhRMA member companies have developed groundbreaking medicines, such as complex, large-molecule biologic drugs, that already have revolutionized treatments for many diseases. However, companies would not have been able to undertake the immense burden of time and resources that are required to create these medicines if they had not been protected by the U.S.’s strong IP laws.  Moreover, that intellectual capital has to be protected by our trading partners when innovative ideas and products cross borders. 

When you consider an agreement of the magnitude of the TPP (the countries currently negotiating it encompass 40% of global GDP), weakening the IP chapters could be highly detrimental to the future of innovation in the U.S. For the TPP to reach its full potential, the IP provisions of the pact should reflect current U.S. standards, including 12 years of data protection for biologic drugs. The U.S. has become the world leader in innovation because it is has strongly protected its innovators. If other nations can rise to meet this challenge, they too could reap the benefits of a knowledge-based economy.