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De-Mystifying Trade Agreements

June 25, 2014
To many people in our industry, international trade agreements may seem like esoteric documents that have little relevance to the day-to-day workings of a research-based, innovative enterprise. After all, aren’t these agreements more about the cross-border trade of big-ticket goods like autos and wheat than they are about new, cutting edge technologies? Well, actually no. Those who have been paying close attention know that these agreements define many of the underlying rules of the road that govern our global industry.

The first significant instance of a trade agreement that had important global impact on our industry was the conclusion in the early 1990’s of the World Trade Organization (WTO) negotiations, and its inclusion of the Trade-Related aspects of Intellectual Property Rights (TRIPS) agreement. The TRIPS set the global floor for IP protection around the world, including setting a standard 20 year patent period, that has now been adopted by most countries.

A series of Free Trade Agreements (FTAs) subsequently negotiated in the past two decades by the United States with a diverse group of countries in Asia, Latin America and North Africa/Middle East built on the WTO provisions to more clearly define IP standards, and in some cases, also develop transparency requirements for the reimbursement of medicines.

At this time, the United States is embarked on two ambitious trade agreements that could similarly have a broad global impact on our industry. The first, begun in 2010, is the Trans Pacific Partnership (TPP), a negotiation involving the United States and 11 other countries in the Asia Pacific region (Japan, Canada, Mexico, Australia, Singapore, New Zealand, Malaysia, Vietnam, Brunei, Peru and Chile), and that will set standards on issues such as IP rights and transparency in drug reimbursement for the 21st century. TPP negotiations cover issues such as regulatory data protection for biologics products, an issue that did not even exist when the TRIPS agreement was concluded.

Last year, the U.S. also launched a far-reaching trade negotiation with the European Union, dubbed the Transatlantic Trade and Investment Partnership (TTIP). TTIP offers an opportunity for the U.S. and EU not only to confirm the importance of strong IP rules for the global biotech industry, but just as importantly, to embark on the process of “harmonizing” their regulatory systems for medicines. A streamlining or aligning of duplicative FDA and EMA requirements could have the effect of saving companies many millions of dollars in drug development costs. More transparent rules surrounding drug reimbursement are also on the table. TTIP also provides the US and EU an opportunity to “reset” their relationship in the area of agricultural biotech, to ensure that global trade is not disrupted.

A final mention should be made of the APEC (Asia Pacific Economic Cooperation) forum , which comprises the United States and 20 other Asia-Pacific nations, including China, Japan and Korea. APEC is now actively working on a program to harmonize the regulatory approach for drug approval across the entire region - a process which could dramatically improve the ability to collaborate in drug development and to more efficiently commercialize new products.

To further explore and explain the far-reaching impact of these agreements, we have developed an exciting program, including three back to back sessions that bring together top experts and negotiators on the Wednesday afternoon, June 25 from 1:30-5:45 in room 5 (A) . Anyone interested in the global policy environment for innovative biotech should attend.


Joseph Damond is the Senior Vice President, International Affairs at BIO