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Trans-Pacific Partnership will aid Colorado biotech industry

Colorado hosts one of the most vibrant life-science sectors in America. Already, more than 600 pharmaceutical innovators call the Centennial State home. Combined, they add an estimated $11 billion to the state economy every year.

International trade negotiators are now considering a major new deal that could profoundly affect the ability of our state's biotech industry to keep growing. This fall, U.S. officials are meeting with their counterparts from 11 other major world economies to hash out the final details of the Trans-Pacific Partnership.

This pact could comprise 40 percent of the global economy. Intellectual property rights are a key point of contention. If negotiators don't install sufficiently robust protections, biotech firms could stop investing in new drug research — and Colorado's economy would be devastated.

Over the past 15 years, pharmaceutical companies have conducted more than 3,000 clinical trials in our state, partnering with hospitals, medical schools and research centers including the Denver Health Medical Center, Colorado Springs' Catholic Health Initiatives, the Children's Hospital in Aurora, the University of Colorado and the Medical Center of the Rockies in Fort Collins.

The life-sciences industry also contributes greatly to the local job market. This sector directly employs 27,000 residents, at an average wage of $84,000 a year.

One of the key areas of development of the local bioscience sector is "biologics." Unlike traditional chemical medicines, biologics are derived from living organisms. They are incredibly complex and tend to be significantly more effective at treating major diseases like cancer and HIV/AIDS.

 Creating a new biologic is a very expensive process, typically costing $4 billion or more. It can take up to 15 years between the initial research phase and bringing the final drug to market.

Colorado drug firms are willing to assume such a risk because, under U.S. law, they enjoy 12 years of data protection for new biologics. During this period, rival firms are not allowed to access the research behind the drug and therefore can't create generic versions of the original product. The original innovator can sell their biologic unopposed and therefore has a fair shot a recouping that sizable upfront investment.

Data protection keeps innovation humming. It drives new breakthroughs. It's essential to our state's economic health.

Unfortunately, some of the parties to the TPP want to cut the data-protection period in half, to just seven years. In the short-term, that may save patients some money by allowing low-cost generic biologics to be introduced to market more quickly. However, over the long run, bioscience firms are less likely to recoup billions in development costs and invest in new treatments.

As Colorado College economist Dr. Kristina Lybecker recently noted: "Without a robust data exclusivity statute, investors may be wary of plowing new money into developing biologics. After all, there's already a very high risk they'll spend all that money and have nothing to show for it."

Allowing other countries to shave down the data-protection period could result in less research, lost jobs and slowed economic growth throughout our state. Federal negotiators need to resist any calls for scaling back existing intellectual property rights.

On the flip side, if the final Trans-Pacific Partnership does actually include appropriately robust data protections — along with clear, transparent procedures for pharmaceutical regulation — Colorado's economy could benefit enormously.

The Asia-Pacific region is well represented among the parties to the deal, which includes Singapore and Malaysia. Already, Colorado sends roughly 40 percent of its total exports — worth $3.3 billion — to this area. With a sturdy new trade framework, our export volume could jump dramatically, creating new jobs and stirring growth in this state.

Colorado lawmakers must work with national trade representatives to ward off any calls to weaken biopharmaceutical data protections in the Trans-Pacific Partnership. Strong intellectual property laws help power our state's bioscience sector.

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About Phil Kalin

Phil Kalin joined Pinnacol Assurance as CEO in 2013. He has served as the chief executive of both public and privately-backed companies, including large hospital systems, as well as organizations focused on health care data, technology and education. He has been active nationally on health care topics related to insurance, data analytics, technology innovation, cost improvement and risk mitigation. Phil is providing an informed opinion on what we see in the Monthly Economic Indicators.

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About Pinnacol

Pinnacol Assurance is the Metro Denver EDC's Research Sponsor. Pinnacol is Colorado’s leading provider of workers’ compensation insurance. Pinnacol provides comprehensive, competitively priced coverage; immediate attention to claims; a highly qualified network of medical providers; and proactive safety programs to more than 55,000 Colorado businesses. Annually, Pinnacol supports nearly $500 million of Colorado’s economic activity, spends over 35,000 hours keeping Colorado worksites safe and provides compassionate care to over 40,000 Coloradans injured on the job.

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