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Enforcing unmet trade obligations protects U.S. innovation

Jay Taylor
Jay Taylor April 11, 2017

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The United States leads the world in medical innovation, helping patients across the globe access the latest life-saving treatments and cures. Trade agreements with other nations serve as the foundation of this mutually beneficial arrangement by ensuring that trade partners protect confidential information, prevent patent infringement, and fulfill their obligations fairly.

Unfortunately, many countries are not living up to their trade obligations. Ignoring these obligations erodes R&D incentives, harms U.S. companies and jobs, and threatens global access to life-saving treatments.

One critical component to innovation is regulatory data protection (RDP), also known as “data exclusivity.” RDP promotes investment in clinical trials by securing regulatory test data. Trade agreements, such as the WTO TRIPS agreement, ensure proper RDP periods and bar disclosure and unfair commercial use of an innovator’s test data. When RDP is ignored, competing generic or biosimilar developers gain an unfair advantage by freeloading on the considerable investments of U.S innovators. Many countries, including China, Brazil, Russia and India, have failed to comply with their trade agreements to protect RDP.

For example, China agreed to provide a six-year period of RDP when it joined the WTO. However, China’s policies in practice are ambiguous, inconsistent, and unevenly applied. As a result, China’s regulatory environment provides an unfair advantage to competing firms to freeload off our safety and efficacy data.

Also important, biopharmaceutical innovators must be able to effectively enforce their patents. Early resolution of patent disputes helps prevent patent-infringing products from prematurely entering the market. Despite agreeing to provide effective enforcement mechanisms, several U.S. trade partners are failing to do so. In Australia, for example, patent disputes are lengthy and, in direct opposition to their trade obligations, Australia does not notify U.S. innovators of a third party’s intention to market a follow-on product until after it is registered as a generic.

Simply put, trade depends on trust. Other nations must enforce the rules they agree to in trade deals if they want access to American innovation and the American market.

Topics: Intellectual Property, Trade, Policy Solutions