Protect the Incentives for Hope, Treatment & Cures

Kristina Lybecker - Head shotToday's guest blog comes to us from Dr. Kristina M. Lybecker, the Gerald R. Schlessman Professor of Economics and Associate Chair of the Department of Economics and Business at Colorado College in Colorado Springs, CO.  Kristina’s research analyzes the difficulties of strengthening intellectual property rights protection in developing countries, specifically in the context of the pharmaceutical and environmental technology industries. She has also worked with US Food and Drug Administration, Reconnaissance International, PhRMA, the National Peace Foundation, the OECD, the Fraser Institute, and the World Bank, on issues of innovation, international trade, and corruption.

The future of the most promising medical frontier is under attack. Many of the most valuable recent medical innovations are “biologics”, a sophisticated class of pharmaceuticals derived from living organisms.  Despite their demonstrated effectiveness, continued investment in biologics is threatened by those who seek to undermine the data exclusivity provisions in the Trans-Pacific Partnership (TPP) trade agreement. 

In contrast to traditional “small molecule” therapies, biologic medicines are structurally complex, which makes them challenging and expensive to develop. Protecting the intellectual property of biologics is just as complicated.  Patents alone are not enough. Data exclusivity protection is also necessary. This restricts “biogeneric” manufacturers from using the innovator’s safety and efficacy data for a period after market approvals to gain authorization for a generic copy of the therapy.  A study  that looked in depth at how long the exclusivity period should be to provide a typical pioneer biologic a positive return on investment concluded that time period is 13 to 16 years.

Beyond the importance of biologics to public health and longevity, biopharmaceutical innovation is crucial to our economic prosperity and trade in IP-intensive goods and services is vital to the global economy. In 2011, IP-intensive industries exported more than $1 trillion in goods and services, accounting for approximately seventy-four percent of total U.S. exports that year. 

The Trans-Pacific Partnership, a free trade agreement involving 12 countries, was intended to result in an arrangement that “enhances the competitiveness of our economies, promotes innovation and entrepreneurship, spurs economic growth and prosperity, and supports job creation in our countries”.  Some opponents are concerned that the TPP’s protection of intellectual property goes too far and would be detrimental to efforts to provide access to affordable medicine in the developing world. Surely it is possible to protect this ideal objective without sacrificing the protection of data essential to providing the world’s innovators of our most promising new treatments and cures with incentives to conduct their research.

Some TPP partner nations seek to limit data exclusivity to as little as five years. Currently, the TPP proposes date protection of 12 years, which is also the current protection available under U.S. law. To truly incentivize our best hope for the development of new treatments and therapies, a sufficient period of protection within the TPP is essential. The promise of new biologics can only become a medical reality if the companies that are developing them have the incentive to do so.