Right now the future of the pharmaceutical industry in Pennsylvania and nationwide -- and the jobs and treatments associated with it -- hangs in the balance.
American trade negotiators are currently negotiating with some of the most vibrant economies in the world to finalize the details of a new trade agreement called the Trans-Pacific Partnership.
The TPP involves the United States plus 10 countries, including Australia, Singapore, New Zealand, Canada, Mexico and Chile. Negotiations for the TPP started in 2009 and are expected to be finished later this year. The chief goal of the agreement is to scale back trade barriers between member nations and create a smart, unified regulatory framework to govern intra-TPP commerce.
America's partners to this agreement are immensely important economically. Together, they represent 30 percent of global GDP.
Central to the success of the TPP is the establishment of strong intellectual property rights for high-tech pharmaceuticals. The major provision currently under negotiation is data exclusivity, which protects the intellectual property of innovators by prohibiting their competitors from accessing the research findings that go into the creation of a new medication.
The function of data exclusivity -- like other intellectual property protections -- is to enshrine the economic incentives for drug companies to innovate and create new treatments. Developing pharmaceuticals is a massively expensive process. For particularly advanced treatments like biologics, the costs regularly exceed $1 billion.
A major class of drugs that benefit from strong data exclusivity protections are called biologics. These are treatments derived from living organisms. They're significantly more complex than traditional chemical drugs -- and they're also more effective. Biologics have already been developed to treat some of the most devastating diseases on the planet, including HIV/AIDs, Parkinson's, Alzheimer's, and cancers.
Competitors can often use a drug's research data to create a knock-off version. Without exclusivity protections, copycats can simply help themselves to the data behind a hot new treatment, create a close enough product, and then suck away sales from the original inventor.
Strong exclusivity protections in the TPP will ensure that innovation in biologics continues. A broad swath of research indicates that the appropriate length of time for data exclusivity is 12 years. Moreover, after extensive debate and with a strong bipartisan showing, the U.S. Congress set the period here in the United States at 12 years.
That's how long the exclusivity provision in the TPP should be set. Anything less would severely compromise American pharmaceutical development -- and devastate the Pennsylvania economy.
Biopharmaceutical firms are responsible for a stunning $40 billion in local economic output every year. They directly employ nearly 80,000 people in this state. These are well paid, satisfying jobs -- precisely the kind of positions that can serve as the cornerstone of the new Pennsylvania economy.
If the TPP doesn't sufficiently protect intellectual property, Pennsylvania drug companies will start losing money to copycats. These firms will respond the only way they can: by scaling back operations, tightening up money for new drug development, and depriving Pennsylvania of new jobs and treatments.
Our state's unemployment rate is at 8.2 percent -- well above where it needs to be. It's vitally important that a major job creator like the pharmaceutical industry continue to operate in a regulatory environment that encourages the kind of risk-taking that generates new treatments and new jobs.
The upcoming TPP negotiations present a real opportunity for American trade officials to install smart intellectual property protections for high-tech pharmaceuticals. Securing a data exclusivity provision of 12 years in the final agreement will help ensure that pharmaceutical companies both in Pennsylvania and across the country keep creating breakthrough treatments.
Christopher P. Molineaux is president of Pennsylvania Bio, a statewide trade association for the life sciences industry in Pennsylvania.