Why Intellectual Property Laws Need To Be Central To Pandemic Preparedness Efforts

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On May 23, the United States announced a major economic initiative with countries throughout Asia known as the Indo-Pacific Economic Framework (IPEF). Already twelve countries have signed up to the framework – including Australia, India, Indonesia, Japan, Korea, New Zealand and Singapore – that together make up around 40% of the world’s combined GDP. While not constituting a full trade deal, the IPEF will require signatories to make at least one “high-standard commitment” in clean energy, supply chain resilience, increased trade and fairness.

What remains to be seen, however, is just how demanding and far-reaching these commitments will be. An important test of the IPEF’s ambitions will be whether it includes stronger intellectual property (IP) law protections and standards for transparent market access, which are traditionally weaker in many Asian-Pacific markets. Integrating a greater commitment to IP protection would not only benefit the US and Australian economies, but would also matter at a global level. At a time when efforts are underway to create a global pandemic preparedness strategy, lax enforcement of IP rights are still the single obstacle to American pharmaceutical giants investing or pursuing joint medical research ventures in many southeast Asian countries. Achieving uniformly high standards around these issues should therefore constitute a priority for the Biden administration, as it would remove barriers towards global medical research and the types of innovations that may just save us from the next pandemic.

Markets and vaccine innovation

For several years, US pharmaceutical companies such as Moderna gambled heavily on the successful prospects of mRNA technology, pouring millions into research. They were able to do so in part due to the strong IP laws incentivizing innovative breakthroughs and also thanks to the transparent conditions creating avenues of dispute resolution. The results of that research are mRNA vaccines that are highly successful in preventing serious disease. These next-generation vaccines outperformed the best efforts produced by countries without the necessary IP policies in place to encourage innovation.

IP protection and enforcement are, however, far weaker in many Asian markets. And while China is arguably the most prolific offender when it comes to poor IP protection, it is a problem that is widespread in the region. Indeed, several Asian countries remain on the 2022 Special 301 Report recently published by the Office of the United States Trade Representative (USTR) for having " serious intellectual property rights deficiencies"  and insufficiently enforcing copyright, patents and trademarks.

For instance, USTR placed Indonesia on the Priority Watch List, citing concerns with the 2016 Patent Law and regulatory data protection failures.  USTR also placed Thailand on the Watch List, and highlighted concerns with the patent backlog.  

Given the risk of losing their investments, the pharmaceutical industry has been reluctant to take innovative risks in Asian markets that offer few certainties. But if the world is to be prepared for the next pandemic, it needs a truly global effort to start developing essential medical innovations now – and that must include greater trade dialogue with Asia.  

Leveraging the Australian advantage

The necessary steppingstone is therefore to create fertile conditions, through the application of stricter IP law application and greater market transparency, for major American pharmaceutical companies to have confidence in placing big bets in the Asian markets.

An opportunity to start making progress in this direction is within the IPEF framework, of which Australia is a named participant. Although the goal of IPEF is to establish trade rules in different domains, it remains to be seen whether the Biden administration will push for the inclusion of tighter provisions over IP law enforcement and market transparency.

These interests are shared by US allies in the Pacific region as well, meaning Washington should elicit their help in pushing for better IP law enforcement through IPEF. A prime example is Australia, which has managed to create valuable common ground on matters related to IP protection in parts of the Indo-Pacific, specifically ASEAN. Australia processed 3,982 patent applications from the pharmaceutical industry in 2019 – proof that Canberra’s emphasis on establishing a strong IP framework to encourage businesses to locate in Australia for IP-intensive innovations has been successful.

Australia has sought to protect these IPs by engaging proactively in IP systems of the Asia-Pacific through various forums, including the ASEAN Patent Examination Cooperation (ASPEC). Australia has been increasing cooperation with ASPEC to achieve standard harmonisation between Australia and ASEAN in the near future.

The experiences gleaned from ASPEC, implemented in 2009, could provide an excellent resource to support shared interests with the US, given that ASPEC was created to accelerate regional growth and investments, with ASEAN leaders acknowledging that the protection of intellectual property rights is crucial to achieve this. In fact, ASPEC, in combination with GPPH, has accelerated patent protection procedures and oversight in ASEAN countries, leading to time and cost savings for applicants, even from abroad.

IPEF could borrow some of Australia’s approaches for engaging the region within these forums to create a system for driving up the standards of other regional trade partners, laying the groundwork for better technological and research responses to the next pandemic that experts and international organisations have been calling for. If the world is to get the next pandemic right, with IPEF officially announced, now is the time to start.

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