Arizona’s biotech sector faces major threat
Biotechnology has become central to the Arizona economy.
Statewide employment in biotech increased by more than 20% from 2018 to 2021. Phoenix is the top city in the country for life-science job growth.
For evidence of our state’s booming biotech sector, look no further than the industry’s response to the pandemic. Arizona inventors filed at least 60 COVID-related patents.
PathogenDx, a Scottsdale company, developed EnviroX-RV to detect COVID-19 on surfaces. bioSyntagma — a biotech spinoff of Arizona State University — partnered with another firm to develop a method for large-scale automated COVID-19 testing.
Disturbingly, some World Trade Organization member nations want to undermine this economic vitality by waiving intellectual property protections for COVID-19 therapeutics and diagnostics. This could have devastating repercussions for the entire biotech sector.
Thankfully, the ill-advised plan wasn’t enacted at the WTO’s recent gathering in Abu Dhabi — but the threat of the waiver still looms.
Patents and other IP rights are protected worldwide thanks to a decadesold World Trade Organization agreement called TRIPS, short for Trade-Related Aspects of Intellectual Property Rights, which establishes minimum standards for IP protection.
That means American companies can sell their products abroad without having to worry about patent theft.
Intellectual Property, or IP, rights are essential to all innovative industries. They encourage companies to invest in potentially lifesaving and world-changing projects — even when the financial risk is enormous.
But some WTO members want to erode global IP protections. In 2022, the United States bowed to pressure from other WTO members to green-light a patent waiver on COVID-19 vaccines.
That waiver has not yielded a single shot.
Over the past 18 months, activists have pushed to expand the vaccine IP waiver to cover COVID tests and treatments. The WTO, which makes decisions by consensus, needs U.S. approval to move forward.
The Biden administration has not taken a position on the plan, despite pleas from industry leaders and experts to oppose an expanded waiver. Until the United States moves to formally end debate on the matter, the door remains open to a massive IP giveaway.
If an expanded waiver is approved — nearly a year after the World Health Organization
and United States ended the COVID-19 public health emergency — it would cast a cloud of uncertainty over all biotech patents.
Investors will flee if they sense IP rights can be gutted on a whim and without a compelling need.
It costs, on average, $2.6 billion in private investment to bring a single new drug to market. Without secure patents, companies have no chance of recouping those costs.
Between 2018 and 2021, venture capital investors poured about $565 million into Arizona biosciences firms. Those funds fueled significant job growth, not to mention the development of treatments for cancer and heart disease.
Our state’s nearly 3,000 life-science businesses are significant employers. The average Arizona bioscience worker earns $99,585 per year — about 40% more than the average private-sector worker in our state.
Bioscience jobs, like those used to develop COVID-19 treatments and tests, drive the kind of economic growth that makes all Arizonans better off.
Distributing essential medicines around the globe is an important cause. But the world is already well-supplied with COVID-19 medicines.
Major pharmaceutical companies have donated treatments like Paxlovid to developing countries, and also licensed out their patents through the Medicines Patent Pool, allowing generic manufacturers abroad to make their own versions.
In fact, many COVID-19 tests and treatments are going to waste.
Far from solving a global health crisis, the waiver would simply hand over American technology to economic competitors — in particular our chief geopolitical rival, China. While the CIA and the FBI fight to stop industrial espionage by Beijing, the patent waiver would essentially legalize it.
Drugs with direct ties to Arizona could be impacted by the waiver. The University of Arizona, partnering with Colorado’s Sunshine Biopharma Inc., is hard at work developing a new antiviral therapy for COVID-19. The drug, SBFMPL4, could be useful for patients who can’t take Paxlovid.
If the WTO approves a TRIPS waiver expansion, SBFM-PL4 could struggle to cross the finish line.
Both of Arizona’s senators are champions for innovation. They voted to pass the CHIPS and Science Act, which funded new public investment in cuttingedge industries including biotech.
They now have a new task ahead of them: Convincing the White House to formally and publicly oppose the TRIPS waiver expansion — before our health innovation sector suffers and patients pay the price.