United States: U.S. International Trade Commission's Anticipated Impact Of The TPP—Focus On Pharmaceuticals And Biologics

Last Updated: August 24 2016
Article by Gasper J. LaRosa

In May 2016, the U.S. International Trade Commission ("ITC") released its report ("ITC report" or "report") on the Trans-Pacific Partnership ("TPP") Agreement,1 concluding that the TPP Agreement would likely benefit U.S. industries that rely on intellectual property rights by requiring:

  • Five to eight years of market exclusivity for new biologic products;
  • Transparency from parties regarding regulatory bodies and procedures; and
  • Commitments related to patents and data protection to decrease infringement losses.

The report provided summaries and analysis of each of these TPP provisions.

Market Exclusivity

Chapter 4 of the ITC report discusses TPP Article 18.52, which is directed to the protection of a new pharmaceutical product that "is or contains biologics." It requires at least eight years of protection from the date of first marketing approval of a new pharmaceutical product, or at least five years of protection in addition to other measures to deliver a comparable outcome in the market. According to the report, this provision is important to the pharmaceutical sector as it determines the length of the term of protection for new biologic products.

The report clarifies that the protections afforded under this provision have been met with mixed opinions. On one hand, according to the report, non-governmental organization representatives state that early competition between generic and innovator companies reduces prices, making the products more accessible to patients in developed and developing countries. On the other hand, representatives of innovator companies state that the TPP provides less protection than under current U.S. laws. Overall, the ITC anticipates a positive impact as the TPP Agreement provides stronger protections abroad, despite the relative weakness of those protections when compared to law in the United States.

Some sources, however, are skeptical of the ITC's modeling exercises and note that "the USITC's modeling exercises in the past have not been good predictors of the outcomes of trade deals."2 For example, The Center for Economic and Policy Research, an economic policy think tank, recently analyzed ITC's projections regarding winning and losing sectors from a trade agreement with Korea, and it found no relationship between the projected and actual outcomes of the trade deal.

Transparency

Chapter 6 of the ITC report discusses TPP Article 8, which covers technical barriers to trade and contains product-specific annexes. Annex 8-C of the TPP lays out requirements intended to promote transparency in the pharmaceutical sector, which the ITC expects to benefit U.S. exporters. The ITC report discusses several of the requirements. One requirement is that the parties define which regulatory bodies have the authority to regulate products in their territory. Another requirement is that the parties must consider relevant scientific and technical guidance when developing regulations, grant marketing authorizations based on specified and publicly available criteria, give reasons for rejecting applications, and establish due process procedures that allow for appeals.

Decrease Infringement Losses

Chapter 6 of the ITC report also discusses TPP Articles 18.37-18.54, which include commitments related to patent disputes, data protection, and other measures for regulated products. The ITC expects these commitments to reduce losses from infringement and increase exports of services and goods that rely heavily on intellectual property protection. The ITC provides the following list of key TPP commitments related to patents:

  1. Patents must be available in all fields of technology when the invention is new, involves an inventive step, and is capable of industrial application, subject to limited exceptions;
  2. Patents must be available for new uses for a known product, or new methods or processes for using a known product;
  3. Parties must allow a grace period of 12 months during which certain public disclosures about the invention will not invalidate the patent;
  4. Parties are required to limit reasons for patent revocations to certain identified grounds;
  5. Best efforts must be made to publish patent applications within 18 months from filing or priority date; and
  6. Patent terms are required to be adjusted to account for unreasonable delays at the patent office.3

The ITC also provides the following list of key TPP commitments related to data protection and other measures for regulated products:

  1. A 10-year period of protection for safety and efficacy data generated for approval of new agricultural chemical products is required;
  2. Parties must compensate for the unreasonable curtailment of the patent terms as a result of the marketing approval process for pharmaceutical products;
  3. A five-year period of protection for safety or efficacy data supporting new pharmaceutical products is required;
  4. A three-year period of protection for new clinical information supporting approval of new indications, formulations, or methods of administration is required;
  5. At least eight years of protection, or at least five years of protection plus other measures to deliver a comparable outcome, are required for a new pharmaceutical product that is or contains a biologic;
  6. Parties are permitted to take measures to protect public health in accordance with the Declaration on Trade-Related Aspects of Intellectual Property Rights and Public Health;
  7. A system is established for addressing patent disputes expeditiously in connection with applications to market pharmaceutical products; and
  8. Consultation on biologics data protections is required at least 10 years from entry into force.4

Economic Analysis

Chapter 6 of the ITC report summarizes the ITC's economic analysis of the patent protections offered in the TPP Agreement. The ITC anticipates a positive economic impact stemming from the TPP Agreement's strengthening of patent protections. The ITC uses the "Park Index," which is an index of patent protection covering 122 countries. It measures changes in each country's level of legislative patent protection at five-year intervals from 1960 to 2010. The Park Index scores countries' laws based on equally weighted categories that generally track requirements in five areas: scope of patent coverage, membership in international treaties, duration of coverage, enforcement mechanisms, and restrictions on patent rights. According to the ITC, the average Park Index value across all 122 countries rose 32 percent during 1995 to 2010, which indicates that patent protections in these countries increased in this time period. The ITC's intellectual property rights model links increased patent protections in TPP countries with increased U.S. intellectual property receipts.5

Statements of Interested Parties

Appendix D of the ITC report contains summaries of the views of interested parties. One of these summaries was provided by Leading Biosciences, a California-based company focused on intestinal mucosal barriers and their role in a variety of medical conditions. Leading Biosciences stated that the TPP Agreement would allow for strengthened intellectual property protection and global expansion. Method patents are a big part of the Leading Biosciences portfolio. However, method patents are not currently recognized in all countries, and some countries do not allow a patent to be filed once there has been a public disclosure, preventing pharmaceutical companies from realizing the profits from years of research and investments. Leading Biosciences stated that, along with other similar companies, it depends on trade agreements to level the playing field for American businesses. The company contends that the TPP Agreement will provide significant benefits to the United States, particularly in supporting innovative scientific industries and bringing the next generation of medicines to the global marketplace.6

Other interested parties also provided written submissions regarding the TPP and are quoted in the ITC's report. For example, the report includes comments by the Biotechnology Innovation Organization ("BIO")—a trade organization that serves and represents the biotechnology industry in the United States and around the world; the Industry Trade Advisory Committee for Chemicals, Pharmaceuticals, Health/Science Products and Services ("ITAC-3")—an advisory committee to the President, Congress, and the U.S. Trade Representative on the TPP; and Pharmaceutical Research and Manufacturers of America ("PhRMA")—an advocacy group that aims to represent the country's leading biopharmaceutical researchers and biotechnology companies.

BIO and PhRMA stated that the term of data protection for biologics is too short under the TPP, which will reduce innovation cycles that lead to new products, while simultaneously allowing earlier market entry for biosimilars. Specifically, BIO, in a written submission to the ITC on February 17, 2016, stated that the shorter period will likely allow "foreign competitors to appropriate U.S. technology more quickly, effectively free-riding on U.S. research and development costs."7 BIO also predicted a negative impact on U.S. jobs and U.S. biologic exports to TPP countries, currently valued at $2 billion.8 While some interested parties asserted that the TPP will limit generic competition, ITAC-3 relayed that its members in the generic pharmaceuticals sector generally support the agreement, whereas innovator pharmaceutical companies have expressed some concerns regarding its data protection provisions.

Footnotes

1. U.S. International Trade Commission, Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors.

2. Dean Baker's Statement on the TPP and Latest USITC Report, Center for Economic and Policy Research (last visited July 22, 2016).

3. U.S. International Trade Commission, Trans-Pacific Partnership Agreement: Likely Impact on the U.S. Economy and on Specific Industry Sectors 464 (2016).

4. Id.

5. Id. at 476.

6. Id. at 621.

7. Id.

8. Id.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions