All posts by Stephen Ezell

access

The Recommendations the UN High-Level Access to Medicines Panel Should Be Making

In November 2015, United Nations Secretary-General Ban Ki-moon convened a high-level panel tasked with studying the relationship between intellectual property rights (IPRs) and access to medicines. The panel was charged with “review[ing] and assess[ing] proposals and recommend solutions for remedying the policy incoherence between the justifiable [intellectual property] rights of inventors, international human rights law, trade rules, and public health in the context of health technologies.”

Were this a panel pursuing a comprehensive research program considering the complete range of factors impacting access to medicines and incorporating a diverse set of voices representing the patients using and the enterprises producing those medicines; the governments and their health-care systems (public and private) procuring, distributing, and disseminating those medicines; and engaging the viewpoints of a broad range of stakeholders, it could have represented a serious and constructive dialogue toward tackling a significant global health challenge.

But the panel has given the game away from the outset. First, by starting from a position of supposed “policy incoherence” between IP rights, innovation, and affordable access to medicines; and, second, by focusing exclusively on IP as the main determinant of access to medicines. The German

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Countries’ Use of Life Sciences Localization Policies Continues to Metastasize

The global economy—across a range of industries from information and communication technologies (ICTs), to advanced manufacturing, to life sciences—has seen a substantial increase in countries’ use of forced localization policies, particularly since the beginning of the Great Recession in 2008. These so-called localization barriers to trade represent policies that seek to explicitly pressure foreign enterprises to localize economic activity in order to compete in a country’s markets.

The life sciences sector confronts a number of different types of localization policies, though they can be generally grouped into three categories: 1) local production as a condition of market participation (including in government procurement); 2) forced intellectual property or technology transfer as a condition of market access; and 3) the use (or threat of use) of compulsory licenses. Unfortunately, the roll call of countries employing these pernicious policies continues to grow.

For example, Indonesia’s Decree 1010 requires foreign pharmaceutical companies to manufacture locally or entrust manufacturing to a company already registered as a manufacturer in Indonesia (a company that could be a potential competitor) in order to obtain drug approvals. Further, Decree 1010 requires local manufacturing in Indonesia of all pharmaceutical products

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A Welcome Expansion of the Information Technology Agreement Has Arrived

On July 1, the global production, trade, and usage of information and communications technology (ICT) products received a long-awaited boost when the expanded Information Technology Agreement (ITA)—a trade agreement that eliminates tariffs on hundreds of ICT products—came into force. The World Trade Organization (WTO) considers the initial ITA, concluded in 1996, as one of the most successful trade agreements ever. The expanded ITA is the biggest tariff-cutting deal in WTO history. It’s hoped that the deal will have similar success in driving ICT-based trade, productivity, and innovation as its successor.

The expanded ITA will build on the significant impact that the initial ITA exerted on growing global ICT trade. From 1996 to 2008, total global two-way trade in ICT products covered by the agreement increased by more than 10 percent annually, from $1.2 trillion to $4.0 trillion. The expanded ITA promotes affordability and accessibility to a new generation of ICT products by eliminating tariffs to trade on an updated list of 201 ICT products. The initial ITA cut tariffs on eight categories of ICT products, such as semiconductors, computers, and telecommunication products. The latest list includes scores of products

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bayh-dole

Why Exploiting Bayh-Dole “March-In” Provisions Would Harm Medical Discovery

By most accounts, patients in the United States and across the globe are in the midst of a new era of medical discovery, one in which new treatments and cures for costly diseases will become increasingly commonplace.

As ITIF noted in a recent report, our nation has benefited from public policies that support innovation and discovery, including strong intellectual property (IP) protections, limits on price controls for innovative medicines, data protections for biologic drugs, and strong government research and development expenditures on health care.

Unfortunately, these core fundamentals are being set aside by proponents of expanding “march-in” rights to address concerns about the price of drugs.

“March-in” rights were included as a privilege for the government under the Bayh-Dole Act, which was enacted with bipartisan support in 1980 to address intellectual property created (at least in part) from government-funded research. The law has played a significant role in driving impactful medical discovery and life-sciences innovation by allowing academic and other research institutions to patent inventions created by federally funded research and exclusively license them to industry for further development and commercialization. As The Economist has written about Bayh-Dole, it

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University Startups Conference Showcases Latest ITIF Tech Transfer and Commercialization Policy Proposals

ITIF Vice President for Global Innovation Policy Stephen Ezell spoke at the National Council of Entrepreneurial Tech Transfer’s University Startups and Global 1,000 Conference in Washington, DC, on April 5, 2016. The following excerpts his remarks.

With innovation being the lifeblood of the American economy, I’d like to offer several policy recommendations that could bolster America’s broader innovation, tech transfer, and commercialization ecosystem.

First, as a society, we’re simply not investing enough in scientific research. We’re not investing as much in research and development (R&D) compared to our own history. In fact, if our own federal government invested as much in scientific research as a share of gross domestic product (GDP) that we did in 1983, we’d invest at least $60 billion more a year in R&D than we do now. So closer to $200 billion a year than $138 billion a year. Moreover, we’re not investing as much as a share of R&D compared to competitor nations. Preliminary data for the forthcoming 2016 OECD Science, Technology, and Industry Scoreboard shows the United States falling to 10th of the 39 OECD countries in national R&D intensity (national R&D investment in

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Yes, the U.S. Really Isn’t Contributing as Much to Global Innovation as Belgium

The American Enterprise Institute’s James Pethokoukis writes about ITIF’s Contributors and Detractors: Ranking Countries’ Impact on Global Innovation report in a new AEIdeas blogpost. We certainly appreciate James bringing attention to the report and calling it out as a “must read.” Yet his post does raise a degree of skepticism about ITIF’s report, questioning in particular the United States’ overall tenth place ranking and asking “If the U.S. is really less innovative than Belgium?”

It’s vital to remember that the intent of ITIF’s report is not to rank the world’s most innovative countries or to rank countries on their aggregate innovation output as measured by indicators such as numbers of new start-ups, numbers of digital economy “unicorns” valued at over $1 billion, or new technologies created—and, indeed, the report acknowledges that the United States leads the world in levels of absolute innovation output. Rather, the report’s objective is to assess which countries’ economic, innovation, and trade policies—on a per-capita basis, crucially—are doing the most to contribute to and the least to detract from global innovation. In other words, to ascertain which countries are producing the most positive global innovation

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manufacturing-blog

New ‘Manufacturing Communities Act’ Would Spur Broad Manufacturing Renewal

While America’s manufacturing sector has rebounded somewhat from Great Recession lows—for example, adding 865,000 manufacturing jobs since February 2010—the recovery languishes, and even those job gains recover less than one-sixth of the U.S. manufacturing jobs lost during the 2000s. Moreover, the U.S. manufacturing sector has seen no growth in real value added since the end of the Recession. In fact, in 2013, U.S. manufacturing value added remained 3.2 percent below 2007 levels.

Put simply, America’s manufacturing sector continues to underperform its potential, meaning that America’s policymakers need to be leveraging every tool and instrument at their disposal to bolster the health of America’s manufacturing economy. And here, a key component of the strategy for accelerating America’s manufacturing recovery should include better empowering regional- and community-based manufacturing ecosystems.

That’s exactly what new, bipartisan legislation in the Made In America Manufacturing Communities Act, unveiled on Tuesday, February 9, 2016, sets out to accomplish. Sponsored by Senators Kirsten Gillibrand (D-NY), Mark Kirk (R-IL), and Jerry Moran (R-KS) along with Representatives David Cicilline (D-NY), Richard Hanna (R-NY), John Katko (R-NY), Tom Reed (R-NY), and Tim Ryan (D-OH), the legislation supports local manufacturing ecosystems

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Top 9 False Promises That China Made in Joining the World Trade Organization

After almost 15 years in the World Trade Organization (WTO), China has still failed to follow through on many of the trade-liberalizing commitments it made in order to convince free trade-oriented nations to approve its membership in 2001. These broken promises have harmed the global trading system as   well as both economic growth and the health of innovative industries across the United States and Europe. Here are nine commitments China made, but never lived up to:

  1. Refraining from requiring technology transfer as a condition of market access

Although its WTO accession agreement included rules forbidding China from tying foreign direct investment or market access to technology-transfer requirements, it remains commonplace for China to compel firms to hand over their technology in exchange for the privilege of investing, operating, or selling in China.

  1. Significantly reducing intellectual property (IP) theft and violations

Joining the WTO required China to recognize the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), which provides protections for patents, copyrights, trademarks, service marks, industrial designs, digital content, and other intangible property. Unfortunately, Chinese IP theft grows unabated. The IP Commission Report on the Theft of U.S. Intellectual

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‘Innovation Box’ Proposal Would Stimulate U.S. R&D and Innovation

In recent years, the United States has become less competitive in retaining and attracting globally mobile capital. That’s in large part due to an uncompetitive tax code that features the highest statutory corporate tax rate among OECD countries; a worldwide, as opposed to territorial, tax system; and an intermittent research and development (R&D) tax credit that has fallen to just the world’s 27th most generous, behind even Brazil, China, and India.

It’s high time for Congress to begin a serious reexamination of U.S. tax policy and to incorporate innovative approaches that spur greater levels of R&D, innovation, and investment by enterprises operating in the United States. One proposal that ITIF has long championed is the “innovation box” (or “patent box”). So named because it is implemented through a check box on a tax form, the policy provides favorable tax treatment for revenues generated from newly developed intellectual property (IP). As ITIF explained in its 2011 report “Patent Boxes: Innovation in Tax Policy and Tax Policy for Innovation,” these provisions differ from—and should be seen as a supplement to—R&D tax credits in that they provide firms with

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digital

Data a Key Driver of Transatlantic Economic Growth

The Transatlantic Policy Network hosted an event on Capitol Hill yesterday to discuss the data revolution in the transatlantic marketplace. The discussion was timely, for the reality is that data is the key commodity in today’s knowledge-based economy. In fact, a recent study by Finland’s TEKES finds that, by 2025, half of all value created in the global economy will be created digitally. Meanwhile, half of all global trade in services depends on access to open, cross-border data flows. Indeed, a wide range of industries—from manufacturers to miners, to banks, hospitals, and grocers—depend on the ability to move data across borders and/or analyze it in real-time as a fundamental component of their supply chains, operations, value propositions, and business models, as ITIF writes in Cross-Border Data Flows Enable Growth in All Industries. And this is as true for small businesses at it is for large—a 2014 study found that 60 percent of U.S. and European businesses with 50 or fewer employees regard data analytics as important to their enterprises’ success.

Moreover, the competencies of countries, and their enterprises therein, at extracting value and insights from data is instrumental to

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