Before the ink was dry on the historic Trade Promotion Authority (TPA) legislation that President Obama signed into law last month, opponents were already working to quash the next item on the president’s trade agenda: the Trans-Pacific Partnership (TPP). By leaking the text of the pact’s intellectual property (IP) chapter—which remains one of the last, yet most contentious, issues to be resolved—anti-traders hoped to revive tired, yet familiar, canards regarding the alleged nefarious consequences of the strong intellectual property (IP) provisions America’s trade negotiators have been steadfastly seeking for inclusion in the TPP. Such allegations include the inaccurate accusation that the TPP could “dump trillions of dollars of additional health care costs on patients, businesses and governments around the Pacific Rim” or that it will compromise access to affordable medicines throughout the Asia-Pacific region.
But the reality is that if we want to conclude a trade agreement that creates the conditions by which innovative solutions to some of the world’s most intractable medical maladies can be found—not to mention an agreement that supports innovation across a wide range of other industries, from manufacturing to digital content—the TPP needs to include robust IP protections and strong enforcement mechanisms. Thus, for the sake of both future global innovation and for the interests of consumers and patients worldwide, Obama and pro-trade members of Congress must stay the course on robust IP protections as the United States heads into what may be the TPP’s final negotiating round.
Strong IP protections in the TPP perpetuate the foundation upon which the global innovation system is built. Without robust protections in the agreement ensuring that the time and money invested into innovating new products, services, and digital content will yield benefits, the incentive to innovate will be diminished. We must ensure that our domestic industries are free to innovate and to market their innovations without fear of expropriation or other infringements by copycats and thieves. Yet this is not just about America’s enterprises and industries. Forceful IP protections and enforcement mechanisms will help create the conditions for innovation to flourish in all TPP-member countries.
For consumers, this means gaining access to new innovations with the potential to dramatically improve our daily lives. One critical example is in the area of biopharmaceuticals. IP protections ensure that the virtuous cycle of innovation—in which the profits derived from one generation of innovations provide the R&D funding to finance investment in the next—will continue unfettered. Scientists will have the freedom (and the resources) necessary to develop new treatments, cures, and vaccines, giving hope to patients suffering from cancer and diseases such as Parkinson’s and Alzheimer’s. One example of the type of protection needed in the agreement is the provision of 12 years of data exclusivity for novel biologic drugs. This standard is already enshrined in U.S. law, and this must continue to be the benchmark for America’s trade negotiators in the TPP.
But while the benefits of strong IP protections are paramount, the politics of trade on Capitol Hill are thorny. The loudest arguments against including IP rights for innovative medicines in TPP are also the most flawed. At the top is the claim that IP rights limit access for generics, because for some opponents of trade agreements, the ideal length of any kind of IP protection is zero. This misses the mark on several fronts and ignores the obvious point that generics wouldn’t exist if it wasn’t for the original inventors, who must bear all the risks and costs required to bring a new drug to market. For proof that the U.S. IP model works, look no further than the fact that generics already comprise an 85 percent market share here. Put simply, the U.S. system incentivizes and rewards the risk-taking that results in new innovations like biologic medicines, while enabling a competitive market for generics. The TPP should reflect this model and ensure it continues unabated.
Although the final TPP will look much different than the leaked text, and no nation will get 100 percent of what it seeks, it remains essential that Obama and congressional supporters of trade stay the course on strong IP protections. After coming this far, bowing to political pressure and weakening TPP would have serious repercussions that could be felt for decades. It’s time for the president to demonstrate the same resolve with our TPP partners that he showed with Congress on TPA and bring home the strongest possible agreement. By doing so, he can ensure the United States keeps moving forward and doesn’t cede ground to competitors such as China in the 21st century economy, nor limit the potential for life-altering innovations.
Ezell is vice president of global innovation policy at the Information Technology and Innovation Foundation.