President Donald Trump will soon have the opportunity to achieve a political and economic victory that he almost achieved in his first term until Congress undermined him at the last minute.
That opportunity includes the upcoming joint review of the U.S.-Mexico-Canada Agreement (USMCA), the trade agreement that replaced the North American Free Trade Agreement (NAFTA). All three countries will meet soon to discuss how the pact works and work out any updates.
During the first Trump administration, as Assistant Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office, I worked on the intellectual property aspects of that pact. The President, U.S. Trade Representative Bob Lighthizer, and the rest of the team have secured numerous concessions from our northern and southern neighbors to strengthen intellectual property (IP) protections – which help prevent foreign rivals from stealing technologies and designs from innovative American companies, reduce foreign free-riding on American investments in innovation, and incentivize American companies to increase their research spending and expand into foreign markets.
Unfortunately, one of the biggest concessions – a requirement that Mexico and Canada provide 10 years of “statutory data protection” to advanced biological drugs grown from living cell cultures – was excluded from the final version of the agreement at the last minute.
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House Speaker Nancy Pelosi of California holds the gavel after entering the Capitol in Washington, Thursday, January 3, 2019. (AP Photo/Carolyn Kaster)
During a regulatory data protection period, competing companies are prohibited from using a biologic developer’s clinical trial data to create their own counterfeit products. Creating a single new biologic drug requires years of research and often billions of dollars.
Data protection regulations essentially give innovators a better chance to recoup their investments and earn returns – thus incentivizing them to put more resources into research and development, creating research and manufacturing jobs.
The United States has provided data protection for biologics for 12 years, and the USMCA would not have changed that domestic standard. The original draft text of the USMCA would have simply brought Canada and Mexico closer to our level to create a level playing field.
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The goal was simple: increase protection abroad so that foreign manufacturers cannot piggyback on American biotech inventors by prematurely introducing counterfeit products. That would allow American inventors to recoup their investments in Mexico and Canada on a more proportionate basis – and thus allow them to lower drug prices in the United States.
But ultimately that provision, intended to reduce foreign freeloading, was removed from the agreement at the insistence of then-Speaker of the House Nancy Pelosi, whose support was needed to pass USMCA implementing legislation through Congress.
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But now there is a new congress. The second Trump administration would be wise to insist on the original terms, which Canada and Mexico had already agreed to, during the upcoming USMCA review. Strengthening data protection laws in our neighboring countries would put an end to freeloading and help lower prices for US patients.
The upcoming review also gives the government an opportunity to hold our neighbors – especially Mexico – to the commitments they have made but are not keeping.
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During a regulatory data protection period, competing companies are prohibited from using a biologic developer’s clinical trial data to create their own counterfeit products.
The Trump administration recently placed Mexico on the special 301 Priority Watch List – the federal government’s collection of serial intellectual property infringers – “due to longstanding and significant intellectual property concerns.” Mexico has failed to implement patent enforcement systems, patent term reinstatement regulations, and copyright enforcement that it promised, and has allowed trademark counterfeiting and copyright piracy to run rampant. Its failures have eroded the protections that the trade pact should have afforded American innovators.
Stronger intellectual property protections would mean more new treatments for patients – at lower prices for Americans – along with more good-paying jobs in the industries of the future, and continued leadership in crucial 21st-century industries for the United States.
