To undermine US competitiveness and national security, keep slashing IP rights

The U.S. International Trade Commission — an independent government body that provides analyses of international trade issues to the president and Congress — recently issued a report with enormous implications for America’s economy.

The report concerns a proposal from several World Trade Organization member countries, who want to waive intellectual property protections on COVID-19 treatments and diagnostic tests invented by American companies. Last year, the WTO already took the unprecedented step of waiving intellectual property protections on COVID-19 vaccines.

The Biden administration previously asked the USITC to study this expanded waiver proposal — and now, the report is here. From the report’s findings, it’s clear that the proposal is unwarranted. It would do immense damage to America’s high-tech industries —  without delivering tangible benefits to people still battling COVID-19 around the world. 

That’s why numerous biotech firms, labor unions and patient advocacy groups have urged the administration to reject this proposal. 

Intellectual property protections grant inventors an exclusive period during which to sell their creations before copycats can enter the market, which encourages continued investment in original research. With patents and copyrights enshrined in the Constitution, the United States has one of the most robust IP systems in the world.

That’s why medical innovation flourishes here. The United States invented about two thirds of all new drugs in the past decade and is developing more than 80 percent of those in the clinical pipeline, according to the National Academy of Sciences. Right now, U.S. researchers are working on more than 400 new drugs to fight infectious disease.

In addition to being the world’s medicine chest, the U.S. biopharmaceutical industry is an economic powerhouse, accounting for more than 3 percent of gross domestic product. And currently, two thirds of all global biopharmaceutical venture capital investments are made right here in the United States.

Our life sciences sector wouldn’t be so robust and globally competitive without strong IP protections. That’s why the actions at the WTO are so serious and far reaching. The proposed IP waiver would allow companies in developing countries to copy foreign IP with few restrictions, and even sell the resulting products outside their domestic markets. Under WTO rules, major drug manufacturing nations like South Africa, India and China count as “developing.” And even IP given to smaller non-wealthy countries could easily make its way to countries like Russia or North Korea.

Waiving IP protections on diagnostics and treatments is completely unnecessary, because biopharmaceutical companies have already partnered with firms in the developing world to deliver more than enough doses for everyone.

For example, Pfizer signed an agreement allowing generic manufacturers to produce its COVID-19 antiviral, Paxlovid, for use in 95 countries, including all low- and middle-income nations. Merck struck a similar deal to promote equitable access to its antiviral medicine, molnupiravir.

Both companies committed to forgoing any royalties associated with sales under their respective agreements.

Rather than isolating the benefits of innovation to wealthy nations, robust IP protections enable widespread global access to the newest treatments and cures. Everyone benefits when innovators can be assured of the security of their IP. Without these guarantees, many companies might hesitate to enter voluntary licensing agreements or other initiatives that aim to bolster access. 

That’s why it’s so confounding that American leaders would even entertain the idea of giving away intellectual property developed in the United States. 

The United States spent the last decade watching its semiconductor industry migrate overseas. Ultimately, we were forced to pass legislation to try and incentivize the industry to reshore operations stateside for the purpose of safeguarding our economic and national security.

We need to learn from that lesson before it’s too late. If we give away a crown jewel of America’s innovation economy, we will soon find ourselves desperately trying to undo the damage. 

And President Biden seems to understand this. He recently signed an executive order aimed at advancing biotechnology in the United States. It highlights how important biotech has become to economic competitiveness and national security — mentioning the former four times and the latter six.

The order was accompanied by speeches from National Security Advisor Jake Sullivan and Director of the National Economic Council Brian Deese.Both touted biotech as a pillar of national security and central to U.S. global competitiveness, particularly given the emerging industry in China.

An expanded waiver would set an alarming precedent not just for American drug developers, but for medical device makers, renewable fuel companies, agricultural science startups, and all other firms — and their millions of workers — within the biotech sector that depend on IP protections. 

The Biden administration has all the facts it needs. Now, all that remains is rejecting the proposal for an expanded IP waiver at the WTO.

John Murphy is the Chief Policy Officer at the Biotechnology Innovation Organization.