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The New Jersey Life Sciences Vendors Alliance (NJLSVA) is a coalition of businesses, individuals and academia who provide goods and services to New Jersey’s life sciences companies.

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R&D Council’s Cicatiello on Long-Term Data Protection Critical for Future of NJ’s Biotech Sector

Newark, NJ, October 20, 2014 Writing in today’s Star-Ledger, Anthony S. Cicatiello, president of the Research & Development Council of New Jersey, writes:

A trade deal being brokered thousands of miles from New Jersey could have a profound effect on our state’s financial future.

Representatives from the United States and other Pacific-Rim countries will meet in Australia this month to continue negotiations on a major new international free-trade agreement. The Trans-Pacific Partnership is expected to foster trade among the United States and some of the major economies of the Asia-Pacific region, including Australia, Japan and New Zealand.

But in order to complete the deal, negotiators will have to come to agree on a number of vexing issues. One especially important to the New Jersey economy is protection of intellectual property. A key sector of our economy could be fatally undermined if U.S. negotiators don’t stand firm.

That sector is biotechnology, and the issue is “data protection” — how long biopharmaceutical companies can shield their proprietary research results from would-be competitors and copycats.

U.S. law provides a 12-year period of data protection for sophisticated treatments derived from living organisms called “biologics.” Yet some countries, especially those with big generic drug interests, are pressing for a shorter period, seven years.

For the sake of our state and the rest of the country, lawmakers and trade representatives must make strong data protection a central part of the agreement.

As longtime residents know, the Garden State and the pharmaceutical industry go way back. Merck, Roche and sanofi-aventis have all called New Jersey home over the years, earning us the nickname “the nation’s medicine chest.” The industry employs tens of thousands of New Jerseyans in good-paying, high-skilled jobs. Today, as the industry has moved into biologics, such companies are injecting more than $8.1 billion a year into our state’s economy.

But thanks to escalating research and development costs, stiff competition and tighter regulations facing biopharmaceutical research companies, a number of New Jersey jobs have been driven to other states or disappeared altogether.

In the past year, Merck — which once employed nearly 9,000 people just in New Jersey — has laid off more than 16,000 workers worldwide. Roche once employed enough New Jersey residents to fill a 116-acre campus in Nutley; today, fewer than 40 people work there.

A multitude of factors is driving these job losses. But at their heart is the high-risk nature of the industry. Bringing a new product to market now takes an average of 10 years and costs $1.2 billion.

Recouping that investment is a serious challenge; economists peg the typical break-even point on an innovative biological product at 12 to 15 years.

In order to survive, these companies need data protection. With an early peek at the research results, their competitors can simply churn out knockoff versions of the advanced medicines the research pharmaceutical companies spend years developing. And because these competitors have no research and development costs to recoup, they can sell their knockoffs much cheaper.

The upshot? Biopharmaceutical companies and their financial backers would have no incentive to invest in new treatments if they conclude they can’t generate a return before similar products based on their research flood the market.

This is more than an economic issue. Biologics enjoy a special degree of protection not only because they are expensive, but also because they are proving uniquely effective in fighting debilitating conditions like Alzheimer’s, which affects 170,000 New Jersey seniors.

If we want the next generation of treatments to come to fruition, we need our negotiators to insist on adequate protection of the intellectual property of this critical industry.

The stakes are remarkably high. We need to let our trade negotiators and the Washington lawmakers who will have to vote on the agreement to know that we are watching them. If we want a strong pharmaceutical industry in New Jersey, and we do, they need to stand strong overseas.