By Joe Trauger and Robyn Boerstling
Over the course of the last year, there have been efforts underway in several states to require some manufacturers to turn over and reveal highly sensitive operational information, such as pricing on specific products, marketing costs, research investments and funding streams that support new and innovative product development.
One misguided legislative effort in the State of Washington could initiate an unprecedented government view of some manufacturers’ proprietary operations. From the perspective of a manufacturer, singling out a sector and publicly releasing such detailed information as required by some of these state legislative efforts would be contrary to commonly understood business practices. Moreover, the impacts would be chilling—a surrender of federal protections exposure to manipulation and, in many cases, forcing the manufacturer to violate contractual obligations. Worse, risk taking and innovation would be too difficult to pursue under such draconian measures.
Washington enjoys a strong manufacturing economy that accounts for more than 6,000 manufacturing firms, representing nearly 14 percent of total gross state product and almost 300,000 manufacturing employees. From aircraft and information technology to biopharmaceutical innovators and alternative energy providers, manufacturing will always be intensely competitive, and manufacturers here and abroad will always seek an advantage for a certain product or a market served. To that end, protections are essential and only reasonable.
The National Association of Manufacturers (NAM) has an unyielding view on the protection of intellectual property and proprietary information because manufacturers understand one crucial thing: If you aren’t innovating, you aren’t competitive. By stripping manufacturers’ ability to protect their lifeblood, well-intentioned, but misguided policymakers presume to know what’s best for America’s manufacturers and consumers. Not only would this type of intervention sap the competitiveness of manufacturers, but many of the proposals also seek to levy fines for failure to meet some obligations set by state leaders. This intrusion singles out a specific industry, and manufacturers will not sit quietly.
As a matter of public policy, requiring manufacturers to hand over what amounts to their identity to government regulators who will then expose various forms of proprietary information is never something the NAM would or could support. It doesn’t matter whether it’s flyswatters or flywheels, the public understands the necessity for businesses, and manufacturers more specifically, to keep their information secure. Why then would manufacturers stand by and watch while one segment of manufacturers is singled out for these type of intrusive, uncompetitive and authoritarian measures when they could just as easily be applied to their own businesses? Sitting on the sidelines is not an option on these issues, and that’s why the NAM opposes efforts that would force manufacturers of medicines to submit to what no manufacturer should have to endure—a government expropriation of their innovation.