OPINION:
The Biden administration just announced a sweeping policy wish list that’s supposed to function as an early Christmas gift to America’s health care consumers. But it’s really more like a lump of coal.
The proposed new framework would allow faceless Beltway bureaucrats to arbitrarily revoke patent licensing agreements on medicines that benefited even slightly from federally funded early-stage academic research. Uncle Sam, M.D., wants the authority to then relicense those patents to generic drug companies that would produce cheaper copies. Well, maybe.
In reality, this new Washington power grab — if established after a two-month review and comment period — would actively deter innovative private developers from licensing those patents in the first place. Instead of getting cheaper drugs, American patients would get far fewer new medicines at all. Definitely.
This ill-considered new policy hinges on a minor provision of a 1980 law known as the Bayh-Dole Act. The law grants universities, research institutions and similar entities the ability to retain the patents on their discoveries, even if their labs had received grants from the National Institutes of Health or other federal agency. (Prior to Bayh-Dole, the government retained title to all patents arising from federally funded research.)
Before Bayh-Dole, potentially life-changing inventions and discoveries gathered dust in academic filing cabinets because of the considerable real-world cost and risk of turning good ideas into real-world products. Even if inventors, their universities and the sponsoring government agencies had identified companies qualified to commercialize those patents, private companies generally weren’t interested — since the government could have revoked the licenses on a whim.
But Bayh-Dole worked. Since the law’s passage, thousands of products arising from publicly funded research have come to market. These inventions include over 200 lifesaving drugs, vaccines and diagnostics. The Bayh-Dole Act even facilitated the development and commercialization of the breakthrough mRNA platform behind COVID-19 vaccines — for which two scientists recently won a Nobel Prize.
Bayh-Dole’s architects rightly believed that taxpayer-funded research should benefit the public as much as possible. So they added a provision to the law stipulating that companies that license those patents must make a legitimate effort to develop them into tangible products.
If a company just sits on the patent, the government reserves the right to “march in” and relicense the patent to a company that will commercialize it.
If it ain’t broke, don’t fix it? Not in Washington. Now the Biden administration wants to reinterpret this march-in provision, allowing nameless, faceless bureaucrats to relicense patents for inventions that have already been successfully commercialized. The new framework would allow the government to simply direct generic drugmakers to start producing cheap copies of any brand-name drug that came to market if it benefited in any way from federal research funding.
It’s a flagrant distortion of the plain meaning of the law. The legislation’s sponsors — Sens. Birch Bayh, Indiana Democrat, and Bob Dole, Kansas Republican — stated in 2002 that “Bayh-Dole did not intend that government set prices on resulting products” and that “the ability of the government to revoke a license granted under the act is not contingent on the pricing of a resulting product.”
Misusing Bayh-Dole’s march-in clauses as a de facto price control would obliterate private firms’ willingness to license and commercialize discoveries from universities and other federally funded research institutions. All taxpayer-funded research, no matter how promising, could become tainted overnight.
This isn’t a theoretical concern. A few decades ago, the National Institutes of Health added a “reasonable pricing” clause to cooperative research agreements struck between the NIH and private companies. The result? The number of public-private partnerships plunged, and the agency was forced to revoke the clause just a few years after it took effect.
Life sciences companies rely on reliable, predictable patent periods to recoup the massive investments required to bring new medicines from the laboratory to the pharmacy. Developing just one new drug can cost more than $2.6 billion and can take well over a decade of effort. And that’s if the drug candidate succeeds at all — 9 in 10 fail at the clinical trial stage.
And it’s important to remember that while the government does bankroll a large share of basic scientific research, private industry directs most of its research and development investment toward clinical research with real-world applications. In fact, clinical development is where most spending happens, accounting for roughly 90% of R&D expenditures.
In typical White House fashion, if you don’t like the law, ignore it — especially if the president is running for reelection. Prioritizing politics over public health is dangerous.
• Peter J. Pitts, a former associate commissioner at the Food and Drug Administration, is president of the Center for Medicine in the Public Interest.
