Biopharma exports benefit the U.S. economy and global health

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Among the ways that they can advance this effort is by knocking down foreign barriers and promoting strong intellectual property (IP) protections that allow biopharmaceutical companies to bring their medicines into other markets and, importantly, to the patients who need them.

The U.S. biopharmaceutical research sector is already a major generator of exports, contributing to improving the health of people across the globe while generating valuable foreign trade for our nation’s economy.

In fact, biopharmaceutical exports continue to rise and support millions of domestic jobs, even in the midst of the current global recession. Between 2005 and 2010, the U. S. exported more than $232 billion in biopharmaceuticals -- an impressive 60 percent increase, from $29.1 billion in 2005 to $46.7 billion in 2010. To put this in context, 2010’s exports of $46.7 billion exceeded U.S. exports of automobiles in 2010, by nearly $12 billion.

But, the strength of the biopharmaceutical research industry, and its contribution to economic growth and job creation, cannot be taken for granted. Future economic growth and investment needed to achieve vital medical breakthroughs requires an economic and export environment that rewards innovation and strongly protects intellectual property rights.

Globally, biopharmaceuticals are helping to improve the quality of patients’ lives.  In emerging markets such as China, Brazil, Mexico, Turkey, and Russia, a strong and growing middle class has resulted in greater demand for new medicines. But discriminatory trade barriers and inadequate IP protections in some of these markets present real challenges to the U.S. biopharmaceutical industry.

These challenges must be met head-on.

Leadership is needed to help keep U.S. biopharmaceutical research companies competitive in the global export market. For example, stronger IP rights and enforcement are essential. U.S. biopharmaceutical research companies must have confidence that their property – their ideas and innovations and the product of billions of dollars in investment – will not be stolen.

Economists estimate the value of U.S. intellectual property across all sectors was $8.1 trillion in 2011, equivalent to approximately 55 percent of U.S. GDP. A failure to aggressively protect intellectual property results in foreign governments implementing unfavorable pricing and coverage policies as well as enacting other trade barriers that slow the introduction of needed, innovative medicines. In addition, these threats mean that America’s biopharmaceutical research companies are increasingly unable to recoup their substantial R&D investments, thus reducing the investments that would otherwise result in new medicines and new U.S. jobs. In 2010 alone, our biopharmaceutical sector invested an estimated $67.4 billion on R&D.

The Korea-U.S. Free Trade Agreement (KORUS) signed into law by President Obama in October represents an important step forward in the effort to find solutions. KORUS secures new commitments that benefit the U.S. biopharmaceuticals industry and other IP-intensive sectors. KORUS also boosts cross-sector exports to Korea by reducing trade barriers; grants needed IP and due process protections; and provides the transparency necessary to create a more level playing field for innovative U.S. biopharmaceuticals. Most importantly, KORUS helps ensure that Korean patients have access to the latest, cutting-edge medicines.

KORUS is a model for all 21st Century trade agreements, including the Trans-Pacific Partnership (TPP) currently under negotiation. Additionally, the TPP needs to reflect current U.S. law providing 12 years of data protection to innovative biologic medicines in order to help the sector maintain its competitive edge and global R&D leadership. Anything less threatens the lifeblood of the U.S. biopharmaceutical industry, including our exports and jobs, and ultimately jeopardizes global patient access to the medicines we develop.

A strong U.S. biopharmaceutical research sector is essential to meeting these global challenges. For biopharmaceutical innovation to continue, government trade policy – such as NEI and U.S. trade initiatives – must embrace a set of rules and protections to ensure that the sector benefits from its work and continues making critical R&D investments. Agreements like KORUS will allow U.S. exports of biopharmaceutical medicines to grow, will support the industry’s research to solve some of the world’s most critical health needs, and will maintain the positive contribution of the biopharmaceutical industry to our nation’s jobs, exports, and GDP growth.

John J. Castellani, President and CEO Pharmaceutical Research and Manufacturers of America