America has long led the world in medical innovation – which brings breakthrough, lifesaving medicines to people around the world, and supplies 4.5 million biopharmaceutical jobs to American workers. But to ensure the industry continues to deliver these benefits, the U.S. needs a level playing field when it comes to international trade.
Unfortunately, U.S. trade partners – including Argentina, China, India, Indonesia, Russia, Turkey and Vietnam – are resorting to “localization barriers” which unfairly discriminate against U.S. products. These barriers put U.S. biopharmaceutical products at a disadvantage and flout obligations set out in international trade agreements. The result is contorted market incentives, undermined innovation and restricted patient access to lifesaving treatments.
Take Turkey and Russia, for example. Both employ discriminatory localization barriers, including:
- Discriminatory local inspection requirements. Turkey requires all biopharmaceutical products to go through a burdensome and opaque certification process for market entry, as well as full on-site inspections for importation despite lacking sufficient resources to complete these inspections, resulting in significant market entry delays, or outright restrictions, for lifesaving products produced by U.S. manufacturers.
- Coercive local manufacturing and tech transfer rules. In Russia, only biopharmaceutical products tested in local clinical trials may be submitted for registration. Meanwhile, in Turkey, domestic biopharmaceutical products enjoy higher reimbursement and quicker regulatory approval. A foreign product can only access these if the manufacturer agrees to transfer its intellectual property data to Turkish authorities, creating unfair windfalls for domestic firms that can copy and market the innovative product.
- Closed government procurement processes. Both Turkey and Russia give price advantages to local biopharmaceutical products purchased by the government – allowing local products to secure government contracts even if they are more expensive than imports. Additionally, Russia outright bans foreign products from government contracts if two or more regional companies have provided bids.
The costs and consequences of illegal trade barriers such as these are severe – they disadvantage U.S. companies in the global marketplace, compromise access to lifesaving medicine, and ultimately hurt patients in both countries. It’s time to level the playing field for the U.S. and the rest of the world.
Jay Taylor Jay Taylor is Vice President of International Advocacy at PhRMA. Prior to Joining PhRMA, Jay was a partner at the international law firm, McDermott, Will & Emery, where he specialized in international trade policy, export controls and Foreign Corrupt Practices Act (FCPA) matters. Previously, Jay served as Associate General Counsel at the Office of the United States Trade Representative (USTR), where he managed and litigated numerous international trade disputes, and drafted and negotiated several free trade agreements. Mr. Taylor received his undergraduate degree from Princeton University, and a law degree from Tulane University.