Discouraging Innovation at State or Federal Levels Is Not the Answer

For manufacturers and all innovators in the United States, the protection of intellectual property (IP), including trade secrets, helps drive not only success but also a continuous cycle of innovation. As such, the United States has historically upheld a very strong record of protecting IP through both federal and state laws. After all, if the government can’t ensure sufficient protections, all incentive is lost in spending billions of dollars on research and development (R&D) only to have the resulting product stolen or devalued.

Several states across the nation have introduced “transparency” legislation or ballot measures that would require manufacturers of prescription medicine to disclose sensitive information that would jeopardize IP and would also set a very poor precedent for the entire manufacturing industry. A recent public conversation in Tallahassee, Fla., presented drug-pricing transparency as the ideal solution. We disagree.

Manufacturers understand the need to reduce health care costs, but we have serious concerns related to the long-term implications of such dramatic measures as proposed in different states this past year and even by President Obama. These drug-pricing proposals single out one industry, challenge current IP protections and threaten to eradicate innovation and eliminate future R&D projects.

Manufacturers across the United States take steps every day to better serve customers, innovate and grow their business, and they accomplish these goals without government intervention. Manufacturers are concerned these misguided efforts will send the wrong signal to the researchers, inventors and innovators who constitute the manufacturing community. Any proposal at the state or federal level that requires manufacturers to reveal highly sensitive operational information would set a dangerous precedent that will deliver chilling impacts to our global competitiveness and prospects for more robust economic growth.

The benefits of a strong manufacturing sector to our economy are very clear. Yet, proposals in the name of transparency without the clear benefit of keeping health care costs down could unravel forward-moving economic success. To support the long-term viability of manufacturers, our leaders must enact policies that encourage innovation, not stifle the very forces driving our economic growth and prosperity. It is the only way to remain a trailblazer and preserve a legacy as a revolutionary leader creating the products of tomorrow.

Robyn Boerstling

Robyn Boerstling is the Vice President of Infrastructure, Innovation and Human Resources Policy at the National Association of Manufacturers.

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