A new report should help President Trump
find his way out of the confusion suggested by his very mixed signals on the
role of medical innovation to American prosperity and patients. Last month, he said research-based drug-makers’
practices were “disastrous,” the industry was “getting away with murder,” and
suggested the federal government should dictate prices of medicines.
A couple of weeks later, he told pharmaceutical
executives: “You folks have done a terrific job over the years … The U.S. drug
companies have produced extraordinary results...” To cap it off, he promised to
end “global freeloading.” “Foreign price
controls reduce the resources of American drug companies to finance drug
R&D and innovation.”
One difficulty with the President’s recent
statement is that policies which allow American research-based drug-makers to
succeed apply equally to foreign drug-makers which operate here. Any innovative
drug-maker which wants to supply its therapies to American patients can apply
for patents which assure its intellectual property will not be taken by
copy-cats. While patents are issued by national governments, international
agreements are necessary to ensure global benefits.
President Trump traduces international
trade agreements, which have included protections for intellectual property
since the United States and other countries signed the Agreement on
Trade-Related Aspects of Intellectual Property Rights (TRIPS) in 1994.
However, President Trump should be in a
good position to understand how important global protection of intellectual
property is. After all, he is a beneficiary.
The Apprentice, which launched in the United States in 2004, has
been licensed in many other countries. Effective copyright protection is
necessary to ensure President Trump and his business associates’ innovative
model of reality entertainment can be enjoyed by global audiences. (The tiff
between Mr. Trump and his American successor, Arnold Schwarzenegger, pales
beside his 2012 Twitter
battle
with his British counterpart, Alan Sugar. When asked by Piers Morgan why he did
not fire Lord Sugar, Mr. Trump replied “I easily could but as long as Sugar is
making me money (it's my show) I won't.”)
Research just published by the U.S.
Chamber of Commerce’s Global Intellectual Property Center (GIPC) measures the
welfare benefits of protecting all types if intellectual property, from medical
innovation to reality TV.
The Roots of Innovation is the fifth
edition of the Chamber’s annual effort to rank countries by a number of
indicators of strength of IP protection. The current edition ranks 45 countries
representing about 90 percent of the world’s Gross Domestic Product. Countries
are scored by 35 indicators within six categories of IP protection: Patents,
copyrights, trademarks, trade secrets and market access, enforcement, and
ratification of international treaties. The indicators measure both law and enforcement:
Countries which do not enforce IP rights, despite the letter lf the law, are
marked down. Most of the indicators are straight forward: Longer patent, copyright,
or trademark terms are better; strong enforcement mechanisms are better; and
treaty obligations protecting intellectual property invented in other countries
is better.
The report does not attempt to determine
causality between strong IP protection and social or economic outcomes. Indeed,
45 indicators is likely far too many to use for such an analysis. Nevertheless,
it does determine a number of positive correlations between strong IP
protection and other beneficial indicators. For example, the correlation
between countries’ scores and
- access
to venture capital is 0.77, and countries scoring above the median are 45
percent more likely to attract venture capital and private investment than
those scoring below the median;
- Research
& development spending is 0.70, and countries scoring above the median
are over 40 percent likely to attract private investment in R&D.
- human
capital is 0.82, and countries scoring above the median have six times
more workers in R&D;
- Development
of biological therapies is 0.70, and countries scoring above the median
host nearly 15 times more clinical trials on innovative biologic
medicines;
- Cutting
edge clinical research is 0.73, and countries scoring above the median
attract more than 20 times the number of early-phase clinical trials;
- Creative
outputs is 0.86, and countries scoring above the median are 75 percent
more likely to have larger and more dynamic content and media sectors;
- Access
to licensed music outlets is 0.78, and countries scoring above the median
have greater access to new, licensed music content with a wider array of
choice over secure platforms;
- Greater
consumption of new audiovisual content is 0.73, and countries scoring
above the median are likely to see at least 3.5 times more theater
screenings of feature films, and generate more tax revenue from ticket
sales; and
- Wider
and more convenient access to video content is 0.61, and countries scoring
above the median have more than double the level of advanced and
easy-access home entertainment.
Protecting intellectual property in
medical innovation and entertainment go hand in hand. The Roots of
Innovation shows there are no innovative and prosperous countries
today that do not have strong IP protections across the board. As he develops
policies that will determine whether patients will benefit from future medical
innovation, let’s hope President Trump recognizes this in his own experience as
a successful creator of intellectual property.
