A recent analysis by the National Association of Manufacturers shows Pennsylvania manufacturers are innovators and essential drivers of the state’s economy. In fact, in 2015, total output from manufacturing in the state was over $85 billion, employing 566,000 Pennsylvanians.
Unfortunately, one proposal up for consideration in the Pennsylvania Senate and currently being considered would jeopardize the industry’s success. The proposal would establish a “Pharmaceutical Transparency Commission” and require manufacturers in the biopharmaceutical industry to disclose proprietary business information, such as research and development (R&D) costs and production and marketing expenses. While the legislation’s intent of lowering health care costs is very important, the unintended consequences would put Pennsylvania’s manufacturers at a serious disadvantage and have very little impact on health care costs.
Research and development (R&D) is critical for manufacturers to maintain their competitive edge, especially in Pennsylvania. In 2014 alone, the state’s manufacturing industry spent $10.8 billion on R&D —ranking it ninth nationally. As a manufacturer, if you aren’t investing in research and continuously innovating, then you are falling behind. Therefore, it is extremely important that manufacturers’ trade secrets are protected.
This is especially true for biopharmaceutical manufacturers creating new medicines, as the research and investment into finding new life-saving medications is extremely costly, risky and time intensive. Proposed ‘transparency’ legislation does not account for the true costs of R&D and would devastate intellectual property protections, discouraging future investment into critical cures.
However, this legislation would not just harm biopharmaceutical manufacturers, it would send a chilling effect across the entire manufacturing industry. No manufacturer should ever be forced to disclose the sensitive information that contributes to its success. Innovation is the lifeblood of manufacturing and it should be protected at all costs. Pennsylvania manufacturers need strong intellectual property protections to continue to innovate, create jobs and succeed in the marketplace.