Software piracy hitting pharmaceutical bottom lines

Emergent BioSolutions, the pharmaceutical company behind the only U.S.-licensed anthrax vaccine, said on Thursday that pharmaceuticals and other U.S. manufacturers are losing money to the practice of international software piracy.

Daniel Abdun-Nabi, the president and CEO of Emergent, made the remarks on Thursday during a press briefing held by the National Association of Manufacturers in Washington. During the briefing, the NAM unveiled a joint study by researchers at Harvard Business School and NAM that found stolen software lost U.S. manufacturers close to $240 billion in revenue between 2002 and 2012.

"In the business of manufacturing pharmaceuticals that save lives, safeguarding (intellectual property) and (information technology) infrastructure is a critical component in ensuring that products in the market are safe, effective, dependable and work as intended," Abdun-Nabi said. "Respect for the rule of law and a decrease in IP piracy will certainly benefit the manufacturing industry and have a positive impact on patients and public health."

According to the study, international software piracy cost the U.S. $70 billion in gross domestic product and 42,220 U.S. manufacturing jobs.

"(In the pharmaceuticals industry), when IP rights are violated, we have seen a devastating impact on jobs and public health in the U.S. and globally." Abdun-Nabi said.

Another study found that if policies were implemented to achieve a 10 percentage point reduction in global software piracy over four years, the policies would add an estimated 65,745 jobs to the U.S. economy during that time.

"It's absolutely clear that the effects of IP theft overseas are significantly felt here at home, threatening jobs, investment and growth," Jay Timmons, the president and CEO of NAM, said. "The study released today paints a stark picture of what we've already lost due to software IP theft-and how much we stand to gain if manufacturers in the U.S. can compete on a level playing field. Until proper enforcement action is taken, our nation's innovators will remain at a disadvantage."

Also on hand for the press briefing were Rob McKenna, the president of the National Association of Jobs and Innovation, Michael Sigourney, the president, CEO and founder of AVTECH Software, Inc. and Drew Greenblatt, the president of Marlin Steel.

When asked how Congress should respond to the issue of international software piracy, McKenna said the Federal Trade Commission could strengthen current language regarding IP theft to make it explicit that IP theft is a World Trade Organization violation. He said Congress could also elevate the issue in trade negotiations with Europe and Asia through the Office of the U.S. Trade Representative.