June 26, 2019

USMCA: Empowering Innovators to Invest in the Cures of Tomorrow


Let’s throw it back to 1994. Forrest Gump premiered; Amazon made its debut; gaming got an update with the first PlayStation release; “grunge” was THE height of fashion; women in hair salons worldwide were asking for “the Rachel;” and the North American Free Trade Agreement (NAFTA) went into effect, establishing the U.S., Mexico, and Canada as one of the largest trading blocs in the world.

No other trade agreement could compare; but it’s long past time to update this quarter-of-a-century old agreement.

Enter the United States-Mexico-Canada Agreement (USMCA), and intellectual property’s (IP) front and center. Chapter 20 of the agreement stands to modernize IP protections for innovators, specifically granting a minimum 10-year regulatory data protection (RDP) term to developers of biologic medicines. This upgrade has been embraced by our neighbors who are looking to incentivize the development of biologics in their countries. For comparison, Congress set the bar in 2010 at 12 years of RDP for these specialized medicines when it approved the Affordable Care Act.

Why is this particular provision so important? Let’s break it down:

  • What the heck is a biologic?

Most of modern medicine is composed of small-molecule chemical products; think old, reliable aspirin. In recent history, pharmaceutical innovators have made high-risk, high-capital investments in R&D to produce complex treatments with the ability to treat illnesses like cancer, rheumatoid arthritis, multiple sclerosis, and many more. Biologics are powerful, complex medicines derived from living sources. While a traditional small molecule medicine, like aspirin, is made from 21 atoms on average, a biologic is comprised of over 20,000. And because these medicines come from diverse living sources, they are much more complicated to produce, stabilize, and maintain than other drugs.

  • And why do they need an RDP?

Here’s where that high-risk investment comes into play. Due to their complexity, biologics take significant time and financial investment to develop before they make it to market. This investment includes the cost of failures; less than 12 percent of medicines that enter clinical trials make it to market. RDP grants the developer’s company exclusive rights to the data they develop during the R&D process to determine whether medicines will be safe and effective. This ensures that the developer can (and will) continue investing in the next-generation of medicinal breakthroughs.

  • What does this have to do with trade?

USMCA will expand Mexico and Canada’s RDP term for biologics to 10 years, aligning them with the U.S., the global leader in medical innovation. Under the new RDP period instituted by the agreement, American, Mexican, and Canadian innovators could develop unprecedented cures and treatments for patients facing otherwise grim diagnoses. And while this all sounds like a no brainer, critics claim these provisions will make these drugs more inaccessible to patients.

  • What does it mean for patients?

Consider the case of Nathan Yates, who has spinal muscular atrophy (SMA), the number one genetic cause of death for infants. It affects the motor nerve cells in the spinal cord, depriving the inflicted of the ability to walk, eat, or breathe without proper assistance. Until 2016, there was no approved treatment at all. In May 2019, the Food and Drug Administration (FDA) approved a new one-time infusion, which has already dramatically improved outcomes for babies with SMA. But skeptics were quick to balk at the price tag. Although this sounds alarming, Nathan was quick to flag the flaws in critics’ arguments, noting that instead of debating the price itself, they should focus on the needs of patients:

“How are we going to get treatments for rare diseases if there’s not a financial incentive for doing it? Therapies are being developed because people think they can sell them for a profit… Don’t we realize, though, that all of society profits from each disease we cure and each baby that is saved from SMA and other deadly diseases?”

  • Still thinking about that price tag? Here’s the bottom line:

The release of this new drug creates competition, which drives down market prices. A third therapy in the same market to be used by a wider range of patients is currently undergoing clinical trials. If approved, not only has competition helped incentivize the investment in new cures, but it has created new treatments for patients where there were previously none. But put aside competition and prices and basic economics and what you have are matters of life and death. The long-term value of this treatment FAR outweighs the initial price. Nathan’s perspective is spot-on:

“We should not put a price tag on life, though… Instead, think about the parents who will no longer have to receive the heartbreaking news that my parents were given 29 years ago: “Your child has spinal muscular atrophy, and there’s nothing we can do. Survival beyond early childhood is unlikely.” The price… seems insignificant now, don’t you think?”

If innovators and scientists are capable of achieving these cures, our policies should accommodate and incentivize them to do so. The time for Congress to act is now. Pass USMCA and empower innovators across the continent to continue investing in lifesaving cures.

Sophia Robichaux is the Associate Communications Manager of the U.S. Chamber of Commerce Global Innovation Policy Center.

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