The idea that the government could forcibly seize ownership of a groundbreaking invention you created is chilling. But that is the prospect the Biden administration seeks to invoke against American innovators in the pharmaceutical space — the driving force behind two-thirds of global drug discoveries.
President Joe Biden’s misguided proposal not only jeopardizes the incentive to innovate but could also lead to a mass exodus of talent and research initiatives from the United States.
America leads the world in drug development thanks to its world-leading system for protecting patents and intellectual property. Abraham Lincoln, a patent holder himself, recognized that patent rights “added the fuel of interest to the fire of genius.” The current administration, however, is trying to undermine our successful system, and the consequences of its proposed regulatory changes could negatively affect millions of lives across the globe.
One key to America’s success in pharmaceutical innovative research and development is the University and Small Business Patent Procedures Act of 1980, popularly known as the Bayh-Dole Act. Crafted by Sens. Birch Bayh and Bob Dole, this legislation granted patent rights to small businesses, universities, and nonprofit organizations involved in federally funded inventions. In addition, this visionary policy spurred inventors to refine and bring their creations to market, revolutionizing the landscape of drug development.
Before Bayh-Dole, federal ownership of patents stifled innovation, with less than 5% of patents making it to consumer markets. The Bayh-Dole Act changed everything, leading to an explosion in patents awarded to universities and a surge in inventions and startup enterprises. Looking back on its impact, the Economist hailed the Bayh-Dole Act as the most inspired piece of legislation passed in the past four decades.
The new policy proposed by the Biden administration would threaten to unravel those achievements. Under the administration’s proposed changes, by exploiting what’s known as the “march-in” clause of the Bayh-Dole Act, the government would suddenly become able to seize patents on inventions partially funded by federal grants, justifying the takeover under the claim that market prices for those drugs are prohibitively high. In essence, the administration would become instantly able to impose price controls through patent seizure, a move that contradicts the very spirit of the Bayh-Dole Act.
Indeed, Bayh and Dole themselves explicitly rejected such a price control rationale in 2002, emphasizing that the law did not intend for the government to dictate prices. Rather, the primary goal was to encourage collaboration between the private sector and public institutions, fostering advancements for the benefit of all the public.
Moreover, contrary to the administration’s arguments, private funding significantly outweighs public funding in research and development, undermining a central pillar of their proposal. For example, the National Institutes of Health reports that private sector research and development amounted to five times the funding NIH approved in 2015 alone.
In light of these realities, the Biden administration’s proposal not only contradicts statutory law but also flies in the face of market dynamics.
American pharmaceutical innovators, credited with saving millions of lives annually, cannot afford to have their achievements jeopardized by a reckless misinterpretation of a law designed to nurture, not hinder, progress. The administration must reconsider this dangerous blunder before irreparable damage is done to the very foundation of our nation’s pioneering spirit in drug innovation.
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Timothy H. Lee is senior vice president of legal and public affairs at the Center for Individual Freedom based in Fairfax, Virginia.