What a busy week in Peru! Today concludes the latest round of negotiations for the Trans-Pacific Partnership (TPP) agreement. Since 2011, TPP has aided the United States in our active pursuit of stronger trade relationships with countries in the dynamic Asia-Pacific region. A 21^st century trade agreement holds the potential for enhancing trade and investment among all partners, sparking economic growth and development, and supporting future innovation. Realizing these benefits requires pursuing the right kind of standards, particularly in the area of intellectual property.

This week, we’ll explore the key achievements that protecting intellectual property rights would have:

• Increased innovation - A recent blog from PhRMA concludes that IP rights are the key to driving innovation, particularly in medicine. All industries, including biopharmaceuticals, rely on the protection of IP rights to drive and cultivate a culture of innovation. Protecting IP rights leaves the profit in the hands of those who have invested the time and money into research, and allows them to continue doing so.
• Increased trade among all partners – Associate Professor of Economics from Colorado College, Dr. Kristina Lybecker, writes on how strong IP rights contribute to increased trade, which drives economic development. When these rights are protected, it eliminates a critical barrier to access and allows global industries to enhance and grow trade.
• A stronger economy that focuses on development – The IP Commission Report estimates IP theft in the U.S. costs over $300 billion per year—nearly the same number as annual U.S. exports to Asia. If IP received the same protections oversees that it does in the U.S. it would be likely that the American economy would add millions of jobs, increase research and development of new products and drive economic growth

These principles are all deeply interconnected and hinge on protecting intellectual property. Successful investment and trade are crucial to keeping the U.S. economy afloat. To maintain economic competitiveness, international standards must create a level playing field. Furthermore, intellectual property protections create the necessary incentives for investment in research and development, without which patients worldwide would not have access to innovative life saving treatments. As TPP negotiations progress, the U.S. must display a firm commitment to protect intellectual property rights, ensuring that the outcome stands in line with current U.S. law.

Legislation for a national pharmaceutical track-and-trace system gained steam on the Hill this week. On Friday, the House Energy and Commerce committee approved its version of the track-and-trace legislation, H.R. 1919. Yesterday, right on the heels of the House, the Senate Health, Education, Labor and Pensions Committee approved their own version of the legislation, S. 957, and then combined it with new compounding legislation. 

Each bill aims to create an interoperable, electronic, unit-level tracing system for the U.S. drug supply chain aimed at protecting people from fake medicines, recalls, and stolen or expired medicines. Both bills seek to accomplish this goal in a step-wise and scalable manner to ensure it will be implemented by different parts of the supply chain in staggered way. The work begins immediately and eventually will lead to a full track and trace system with roles for each stakeholder in the supply chain, from manufacturers that make the drugs to the pharmacists that dispense them to patients. 

There are some differences in the two bills, but both contain the underlying principles and requirements that will improve drug safety in the United States with a comprehensive, national system. The bills go a long way toward the development of a single, national system to follow medicines as they travel through the supply chain. By strengthening the chain, these bills will help provide patients with peace of mind on the safety and efficacy of their medications. 

Lilly joins other supply-chain stakeholders in congratulating Chair of the Energy and Commerce Committee, Representative Fred Upton, Senate HELP Committee Chairman Harkin and Ranking Member Alexander as well as Senators Bennet and Burr and other Congressional champions of these bills on this great accomplishment. We applaud this milestone and look forward to working with Congress as they partner to improve and eventually pass the legislation into law.

Medicare Part D currently provides over 35 million older Americans improved access to their prescription medications. Yesterday, the Senate Special Committee on Aging brought together policy experts to discuss Medicare Part D’s performance in the decade since it became law. Reflecting back on the last 10 years, it becomes clear that Part D works. Medicare Part D provides beneficiaries with quality, cost-effective care and helps to improve the sustainability of the entire health care system.

Ranking Member Susan M. Collins noted that the Part D program is “extremely popular and working very well.” According to recent surveys, an astonishing 94% of Part D enrollees say they are satisfied with their coverage, and 95% feel confident that their coverage meets their needs. However, Senator Collins cited concerns that a lack of education and awareness of Part D may lead older Americans to choose plans that do not best suit their lifestyles. As Senator Collins emphasized, providing more targeted assistance can help ensure that beneficiaries choose plans that best meet their financial and health needs.

Greater choice for beneficiaries choosing their Rx drug plans helps ensure that competition will keep prices low and quality of care high. It is this free market balance that has made Part D an effective program over the last decade. Speaking before the committee, Research Professor at Georgetown University’s Health Policy Institute, Jack Hoadley, PhD outlined four successes of Medicare Part D:

• The cost of Part D has been lower than expectations
• Part D has reduced costs and increased access for enrollees
• The Part D coverage gap is being fixed
• Despite initial concerns, the program’s launch went smoothly

Medicare Part D has proven time and again that health policy can provide quality care and be fiscally sound. Yet despite these successes, proposals continue to threaten the balance of choice, competition, and free market principles that make this policy viable. As Executive Vice President for Policy and Research at the Pharmaceutical Research and Manufacturers of America, Richard Smith emphasized, “There is no justification for imposing price controls on a Part D program that has achieved a strong record of cost containment, beneficiary satisfaction, and improved health outcomes.” As the months lead up to Medicare Part D’s 10 year anniversary, we look forward to more discussion about how we protect this model program that work for patients. As Chairman Bill Nelson said at yesterday’s hearing, “We can work together to ensure that no senior ever has to leave the pharmacy without the drugs they need.” 

We’re shaking things up on this week’s LinkPad with a Throwback Thursday! Today, we’re looking at the policies that enable innovation and bring those innovations to the patients who need them most.

• 1983: The Orphan Drug Act passed, encouraging the development of new medicines and treatments for rare diseases. Since then, the number of approved medicines for rare diseases has risen dramatically.
• 1984: The Drug Price Competition and Patent Term Restoration Act of 1984, colloquially known as the Hatch-Waxman Act, preserved financial incentives for the research and development of innovative medicines, while making room for the modern U.S. generics market to emerge. Since Hatch-Waxman there has been a 25-30% reduction in the prices of medicine and over $193 billion in cost savings...

Tomorrow, the Government of Peru will host stakeholders from around the world during the 17^thround of negotiations on the Trans-Pacific Partnership (TPP). The TPP provides an opportunity to strengthen U.S. trade relationships in one of the most robust, dynamic regions in the world. The White House has cited the TPP’s potential to create a truly 21^st century trade agreement. But what does that really mean? When we talk about a 21^st century trade agreement and gold-standard intellectual property protections, it may sound like science fiction, but it has very real implications for the United States and partner countries...