On February 22nd, world leaders will convene in Singapore to discuss the Trans-Pacific Partnership (TPP). Australia has a prime opportunity to strengthen its intellectual property regime and continue to attract much-needed foreign capital to our shores while inspiring our nation's most innovate minds.
Australia's respect for intellectual property has helped create a sophisticated economy with diverse hi-tech industries. Our biotechnology sector is perhaps the most compelling example. Having emerged just two short decades ago, Australia now counts about 400 biotech companies worth approximately $32 billion that are generating more export cash than our wine producers or automobile manufacturers. In 2013, our biotech companies raised over $700 million in capital investments - the highest figure since 2007 - and launched several successful IPOs.
Beyond the lift these capital investments bring to Australia's economy, the underlying research holds the promise of new treatments and medical innovations to stop debilitating non-communicable diseases like cancer and Alzheimer's, deadly infectious diseases, and even incurable superbugs that impact billions of people around the world.
The Australian Trade Commission has resoundingly endorsed the industry's accomplishments, and celebrated the international capital it has attracted and the impact it could have on human health and well-being. On its website, the Commission states, "excellent research facilities, world-class scientists and a strong but flexible regulatory regime have made Australia a powerhouse of biotechnology and pharmaceutical innovation."
Given that strong intellectual property protections are the engine driving these gains, it is surprising that the Australian government does not appear to support them in the context of the TPP negotiations. According to private documents recently made public, Australia stands against various protections for intellectual property that would facilitate strong investment in our biotech sector - and ensure that our citizens benefit first and foremost from the medical innovations these companies produce.
Regarding TPP, Trade and Investment Minister Andrew Robb recently stated that "opponents of trade are trying their darnedest to undermine a deal that can deliver truly enormous gains for Australia." This includes health activists, who incorrectly claim that strong intellectual property laws needlessly increase the cost of health care and deny life-saving medicines to those most in need.
Minister Robb needs to stand up to these activists on this issue. Effective treatments, cures and vaccines actually save far more public health dollars in the long run than they cost, because they keep people healthy and productive, generate significant cost savings over time. And the fact is that there would be no more life-saving medicines without strong intellectual property laws to incentivise their creation in the first place.
Without clear and enforceable intellectual property protections in the TPP, we risk losing billions of dollars in investment for life-saving medical research. Although Australia's biotech success has come quickly, it has by no means come easily and the path to future success is not assured.
The average drug takes more than a decade and $1 billion to produce. According to a recent analysis by Forbes, that cost can be as high as $5.5 billion for large pharmaceutical companies working simultaneously to develop many drugs. Companies and investors are only prepared to take on these substantial risks if they can earn a return on their investments, backed by strong and predictable intellectual property protections.
Indeed, the Trade Commission further states that, "Leading Australian biotech companies have developed and brought many drugs to market often in collaboration with international investors and multinationals." If we make it easier for our trading partners and other governments to undermine intellectual property protections, limiting opportunities for reward, you can bet that investors will quickly lose their zeal for Australia's biotech sector.
That would be a great shame. The University College London has just published a report arguing that if current scientific momentum is maintained, disease-related deaths among the under-70s could be nearly eliminated by 2050. The authors cautioned, however, that the greatest threat to this progress is a global trend toward weaker intellectual property rights. When it comes to the TPP negotiations, Australia should not make itself a part of the problem when it is poised to play a key role in the solution.
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