Development of a new drug is an expensive endeavor, requiring top-tier scientists and equipment and years of clinical trials. There are many false starts and dead ends. Altogether, it costs $2.6 billion to bring a single drug to market.
Intellectual property rights, such as patents, give inventors the chance to recoup this enormous investment. IP protections allow companies to sell drugs exclusively for a limited time. As Abraham Lincoln said, a patent, "adds the fuel of interest to the fire of genius in the discovery and production of new and useful things."
The United States has some of the strongest IP protections in the world. As a result, it is the world leader in drug development. U.S. biopharmaceutical firms invest more than $60 billion annually in research and development, and they received more than half of all drug patents granted worldwide in 2014.
Unfortunately, however, other countries embrace our inventions while regularly undermining America's IP. Take, for instance, our NAFTA partner Canada. Our northern neighbor imposes price controls on drugs. Because of these artificial price caps, Canadians spend up to 55 percent less on pharmaceuticals than Americans. That's unfair — especially when you consider that the average Canadian's family income is slightly above the average American's. The Canadian price caps eat into companies' research and development capabilities and shift more of the costs onto American consumers, who pay more as a result.
Canada also regularly undermines American manufacturers' patents. Its courts revoke American patents, enabling Canadian companies to create knockoff copies of our patented drugs. The problem is so bad that the U.S. Trade Representative put Canada on its 2017 "watch list."