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Life Sciences Innovation; IP

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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