PhRMA to USTR: Use trade policy to defend American innovation

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American leadership in biopharmaceutical innovation fuels the U.S. economy and helps American patients receive faster access to breakthrough treatments. Strong U.S. trade policy is vital to protect this leadership.

PhRMA’s submission to inform the U.S. Trade Representative’s (USTR) 2027 National Trade Estimate Report highlights the need for USTR to continue to use trade policy to champion American innovation abroad.

Why it matters: Across the globe, high-income countries impose harmful government price controls that undervalue innovative medicines developed and produced in the United States.

These policies allow other countries to benefit from U.S.-led research and development without paying their fair share for the resulting innovations – leaving America to shoulder a disproportionate share of the cost.

As a result, many of the world’s wealthiest economies, including Canada, France, Germany, Italy and Japan, spend a much smaller share of GDP per capita on new innovative medicines than the United States.

PhRMA’s submission applauds the initial steps that USTR has taken to address these harmful policies – including the landmark U.S.-UK Arrangement on Pharmaceutical Pricing and the Section 301 investigation of Germany’s pharmaceutical pricing policies – and calls on USTR to challenge unfair price controls in other key markets.

But, fairly valuing medicines is only part of the equation.

U.S. trading partners must also adequately protect intellectual property rights, which are essential to give innovators the certainty needed to invest in high-risk research, collaborate across borders and turn scientific discoveries into new treatments and cures.

Despite this, Canada and Mexico have not fully implemented IP commitments required by USMCA, and the European Union recently finalized legislation that weakens critical IP incentives.

Trade policy is a powerful tool: USTR can help champion American industry and innovation by

Securing additional agreements that require wealthy countries to pay their fair share for pharmaceutical innovation, similar to the U.S.-UK pricing agreement;
Aggressively enforcing existing intellectual property and market-access commitments; and
Securing strong, enforceable pro-innovation standards in future trade agreements.

The bottom line: Supporting American innovation requires action at home and abroad.

When our trading partners protect intellectual property, appropriately value new medicines and provide fair market access, American workers can compete on a level playing field, patients gain faster access to new treatments and the global innovation ecosystem is stronger.

Brian Picone

Brian Picone is PhRMA’s Deputy Vice President for international trade. Previously, he was a senior trade policy analyst with the law firm of White & Case LLP and the manager of government affairs at the National Association of Foreign-Trade Zones. He received a master’s degree in public policy from Brown University and an undergraduate degree from Suffolk University.

Brian Picone

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