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USMCA Will Spur Medical Breakthroughs

By on October 14, 2019

By Kenneth E. Thorpe

Mexico recently ratified the United States-Mexico-Canada Agreement, the mammoth trade deal that could replace NAFTA. U.S. lawmakers would be wise to follow suit — the pact could save and improve millions of Americans’ lives by spurring the development of cutting-edge medicines.

One of the deal’s most important provisions would strengthen intellectual property protections for an innovative class of medicines called biologics. Biotech companies manufacture these large-molecule drugs from living organisms like animal or plant cells.

Doctors use biologics to treat everything from cancer and diabetes to blindness. They’re a beacon of hope for patients living with Alzheimer’s, Huntington’s, and a host of currently incurable diseases. Such cures could ultimately save our healthcare system hundreds of billions of dollars by eliminating costly chronic diseases.

It’s not easy to develop these medicines. Less than 12 percent of biologics that enter clinical trials ultimately receive FDA approval. It takes almost $3 billion, on average, to research, develop, and secure regulatory approval for a single drug. Few entrepreneurs have the patience to exhaust that kind of capital.

Strong IP laws incentivize companies to research these long-shot cures and treatments.

Without such protections, rival pharmaceutical firms could copy an innovator’s drug design and sell the treatment for pennies on the dollar. Investors wouldn’t be able to recoup their development costs. Research spending would soon dry up. And the drug development pipeline would cease to churn out new cures.

USMCA would usher in the next generation of biologic medicines by bringing Canada’s and Mexico’s IP standards closer to our own standards. Currently, U.S. law grants companies a dozen years of “regulatory data protection” on any new biologics. During that time, rival companies can’t use an innovators’ lab or clinical trial data to create their own knockoff medicines.

Under the new deal, Canada and Mexico must offer at least a decade of regulatory data protection. That’s a two-year increase over the status quo in Canada and a 10-year increase in Mexico, which currently offers no data protection to biologic medicines.

The stronger protections would encourage American drug innovators to pour even more money into researching and developing treatments.

Medical breakthroughs represent our best hope of solving America’s chronic disease epidemic. More than 191 million Americans live with at least one chronic condition. These folks account for 81 percent of hospital admissions and cost the United States nearly $3 trillion annually in medical expenses and lost productivity.

Unfortunately, some lawmakers believe that stronger IP protections will raise health costs for patients and government programs.

The opposite is true. By incentivizing companies to discover new cures, USMCA will improve patient health outcomes and prevent patients from needing more costly medical care down the line.

USMCA would lead to more lifesaving treatments and cures for devastating chronic diseases. Let’s hope our congressmen and women ratify the deal pronto.

Kenneth E. Thorpe is a professor of health policy at Emory University and chairman of the Partnership to Fight Chronic Disease.