What They Are Saying about the Value of New Innovative Medicines

Understanding how intrinsic intellectual property (IP) is to the United States economy (innovative industries support more than a quarter of all jobs in the U.S.), the Office of the U.S. Trade Representative (USTR) each year releases the Special 301 Report, which details the trade barriers that exist with our trading partners and places certain countries on designated “watch lists.”

Since innovation is fundamental to the success of the biopharmaceutical industry in developing the next generation treatments and cures for the world’s patients, PhRMA always seizes upon the opportunity to submit commentary on behalf of our member companies for consideration in the compilation of the final report.

In addition to submitting our recommendations, I also testified before the Special 301 Subcommittee today to reiterate several of our concerns about our trading partners’ understanding of adequate IP protections.

Although 2014 brought numerous positive IP developments for U.S. biopharmaceutical companies, there are some countries that still pose serious threats to the future of innovation and our ability to bring new treatments to the global marketplace. We have recommended that Turkey receive a Priority Foreign Country designation because of the country’s significant market access barriers, such as its pharmaceutical product registration processes and government price controls. One of our strongest and closest trading partners, Canada, has once again been recommended for the Priority Watch List, primarily because of its significantly heightened and arbitrary patent utility requirements.

Additionally, India still remains an issue for PhRMA member companies. The election of Prime Minister Narendra Modi in May 2014 ignited several positive developments in the U.S. – India relationship, including the reestablishment of the Trade Policy Forum and the High-Level IPR Working Group. While PhRMA is optimistic about our future engagement, we also remain concerned about the country’s IP environment, especially in terms of its capacity to enforce patent protections, lack of regulatory data protection, government price controls, and uncertain clinical trials process. Last year, USTR placed India on the Priority Watch List and also conducted an Out-Of-Cycle Review. This year, PhRMA has recommended that India receive the same designation along with another Out-Of-Cycle Review and we look forward to working with the Administration as it builds a roadmap that will ensure substantive changes to India’s policies.

The Special 301 process and sustained U.S. Government advocacy can have a beneficial impact on the market for innovative pharmaceuticals around the world.  Egypt is a good example.  The Egyptian Government has embarked on a renewed partnership with innovative pharmaceutical industry and has sought to resolve issues addressed in our Special 301 submission.  We  strongly support this effort and believe that if concrete reforms are implemented, it will help improve the healthcare environment for Egyptian patients and the intellectual property and market access regimes for pharmaceutical companies.

It is our hope that the Special 301 Review process will send a message to U.S. trade negotiators about the importance of protecting innovation in our trading relationships and the potential to create a global IP infrastructure. Should adequate IP protections be in the Trans-Pacific Partnership (TPP) trade agreement, including 12 years of data protection for the highly-complex biologic drugs, many of the barriers that are echoed each year by stakeholders in the Special 301 Review process could be alleviated.  

PhRMA and its member companies very much appreciate the U.S. Government’s continual willingness to protect U.S. innovation by highlighting problem markets in the Special 301 Report. Continuing this important dialogue will allow the U.S. to remain the world leader in innovation and bring about meaningful, positive outcomes for global health.