International trade is critical to delivering life-saving and life-enhancing medicines in the global economy, which is why PhRMA addresses several discriminatory foreign government practices in its 2019 National Trade Estimate (NTE) Report submission to the Office of the United States Trade Representative (USTR). Trade practices that violate international obligations or otherwise undermine innovation and access to medicines threaten the biopharmaceutical industry’s ability to produce new treatments and cures. In so doing, such practices jeopardize high-value American jobs, the global competitiveness of several of the most innovative U.S. companies, and significant investment, research, development, and manufacturing in the United States.
Foreign government practices of particular concern to the research-based American biopharmaceutical industry include:
- Localization barriers – Biopharmaceutical innovators increasingly are confronted with discriminatory policies and practices designed to benefit local producers at the expense of American manufacturers and their employees. Such barriers include de facto import bans, mandatory technology transfers and the conditioning of market entry or other benefits on local manufacturing. These policies and practices harm U.S. businesses by diverting resources toward less efficient investment, diminishing global innovation and income and reducing global trade by tens of billions of dollars.
- Practices that deny fair and equitable market access – A variety of foreign government policies and practices that deny fair and equitable market access for medicines undermine American biopharmaceutical companies’ abilities to bring new medicines to patients around the world. Such policies and practices include import barriers, regulatory approval and pricing and reimbursement delays, government price controls and discriminatory pricing policies and lack of transparency and due process. These barriers significantly threaten investment in future treatments and cures, create unpredictable business environments and reduce U.S. exports.
- Inadequate or ineffective intellectual property protections – In many countries, strong intellectual property (IP) rights do not exist, are weakly enforced and / or are counteracted by other adverse policies or practices. Among the most serious types of global IP challenges for America’s biopharmaceutical industry are restrictive patentability criteria, patent backlogs, market-size damages, weak patent enforcement, compulsory licensing and regulatory data protection failures. These threats to IP seriously jeopardize critical incentives for innovation and undermine policies that promote and protect competition and the discovery of new medicines.
PhRMA’s NTE submission highlights many of the most significant international challenges and discriminatory foreign government practices that the U.S. innovative biopharmaceutical industry faces. Addressing these challenges and confronting these practices is essential to ensure that America’s biopharmaceutical companies can continue to compete internationally and provide new medicines to patients across the globe.
We urge USTR and other federal agencies to pursue five actions: (i) enforce and defend global, plurilateral, and bilateral rules; (ii) secure strong commitments in global, plurilateral, and bilateral trade negotiations; (iii) ensure that government pricing and reimbursement policies and decisions are fair and transparent and appropriately value innovation; (iv) combat the worldwide proliferation of counterfeit medicines; and (v) build and strengthen global cooperation.
America’s biopharmaceutical sector is the global leader in medical research, supports nearly 4.7 million American jobs, and contributes nearly $1.3 trillion to the U.S. economy. Even more important than the sector’s role in the U.S. economy, however, is the industry’s contribution to global patient health. For example, new treatments accounted for three-quarters of life expectancy gains between 2000 and 2009, according to research examining data from the United States and other high-income countries.
The United States must take steps to protect and promote this innovation. We look forward to working with the U.S. Government and others to resolve foreign trade barriers and to create and strengthen environments that support and safeguard the future of medical research and progress.
To read PhRMA’s full submission click here.
Douglas Petersen Douglas Petersen is PhRMA’s deputy vice president for international trade. Previously, he was international trade counsel for the U.S. Senate Committee on Finance, an international trade attorney with White & Case LLP and a trade policy analyst at the Cato Institute. He received a law degree from New York University, a graduate degree from the London School of Economics, and undergraduate degrees from the University of Utah.