The Biden Giveaway to China
Under the guise of lowering drug prices, the Biden administration is moving forward with a proposal that could dismantle the intellectual property (IP) framework that has enabled the US to bring life changing treatments to patients. Politicized attempts to strip patent protections from medical innovations would have had a chilling effect on university research, negative impacts on health outcomes and undermine US global leadership and national security.
Our ability to bring new treatments from America’s labs to the patients who need the treatments has been accelerated by legislation called the Bayh-Dole Act, which enables public and private sector collaboration in the name of bringing groundbreaking inventions to consumers.
Passed in 1980, Bayh-Dole allows universities and other public entities to retain the patent rights on discoveries made with federal funds and encourages these institutions to find commercial partners to bring the products to market. The so-called “march-in rights” the law gives to the federal government enable this commercialization. Taking a “use it or lose it” approach, the law says the government could “march in” and strip the patent from an entity that did not commercialize the invention within a reasonable period.
Once enacted, Bayh-Dole unleashed discoveries from universities, small businesses, and research institutions by providing them with assurances that they would retain the patent rights and market exclusivity for their inventions, even if they received government funding. Additionally, the law helped private companies recoup the significant investments required to bring inventions to market – whether they be drugs or new technologies. The impact of this legislation for patients is clear – between 1996 and 2017, the Bayh-Dole Act contributed to the launch of 300 new drugs.
The Biden administration’s misguided interpretation of the law would allow the federal government to license the patent rights of certain prescription medicines to other manufacturers when they arbitrarily deem the price of a drug to be too high. This use of march-in rights would disincentivize investment in university research by commercial manufacturers and prevent new medications from reaching patients in need. Companies would steer clear of any invention that received government funding.
The White House’s proposed framework on the use of march-in rights also ignores the original intent of Bayh-Dole. The law does not give federal agencies the authority to exercise march-in rights because they deem the price or other terms at which the product is currently offered to the public too high or unreasonable. Notably, the National Institutes of Health (NIH) itself has historically denied every march-in request because none could meet the appropriate threshold.
The authors of the law, late Senators Birch Bayh (D-IN) and Bob Dole (R-KS), themselves wrote that the intent of the legislation was not for the government to set prices, instead instructing the government only to revoke licenses when the private entity has failed to commercialize the invention. Further, the senators explicitly stated that the federal government would have to amend the law before Congress could ever decide to make price a ground for “marching in” on a patent.
Beyond the clear impacts on patients and American institutions, the role of a strong IP framework is central to American global leadership and has significant national security implications. Despite this, efforts to erode critical IP protections don’t stop at the White House’s march-in rights proposal.
This week, the World Trade Organization (WTO) is set to consider expanding the temporary Trade-Related Aspects of Intellectual Property Rights (TRIPS) waiver. While it was originally intended to increase global access to COVID-19 vaccines, expanding the waiver to include COVID-19 diagnostics and therapeutics threatens the ability of American companies to compete globally and would hand over precious American IP to foreign adversaries, including China. Washington policymakers must urge the Biden administration to oppose any such expansion of the TRIPS waiver.
Between 1996 and 2020, the Bayh-Dole Act contributed $1.9 trillion to the American economy and supported 6.5 million jobs. Policymakers and regulators must reject any effort to weaken the IP framework that has made America a global leader in innovation through the use of march-in rights or other policies that threaten similar negative impacts. Anything less will turn over U.S. innovation leadership to our foreign adversaries, threaten patient health outcomes and continued technological discoveries, and cut off public-private scientific research cooperation at the knees.
William S. Smith, PhD, is Senior Fellow and Director of the Life Sciences Initiative at Pioneer Institute in Boston.
