President Joe Biden is once again bypassing Congress’s constitutional check on executive power by unilaterally imposing a new provision to a 43-year-old law that has been debated and rejected numerous times.
However, this time Biden’s scheme doesn’t just target the pharmaceutical industry, he’s threatening any and every industry, academic institution and researcher that receives even a whiff of federal funding.
The bipartisan Patent and Trademark Act Amendments of 1980, also known as Bayh-Dole, allows universities, medical schools and research institutions to use federal funds for research to develop innovative technology and products. These institutions and inventors can then file patent applications, license their discoveries and try to generate revenue that can help cover the costs of university programs.
But creating something of value in a university lab isn’t the same as manufacturing a product, pricing it and marketing it to the public. That’s why Bayh-Dole allows universities and research institutions to license their innovations to businesses that have the capital, manufacturing plants and marketing expertise to bring an innovation to market.
The law has certainly benefited the prescription-drug industry, which has brought numerous, important drugs to market under Bayh-Dole. And researchers at universities and medical schools are working constantly to find the next life-saving drug. Drug companies often pay research institutions to license a discovery, and then invest hundreds of millions and even billions of dollars for the testing, clinical trials and manufacturing to bring the promising research to the public.
But the drug industry is only one of many industries that have benefited from the law. The federal government provides research funds to a wide array of colleges and universities, research organizations and even private companies, focusing on health, energy, agriculture, science, technology and other areas. Think semiconductors, clean energy products such as batteries, gene-editing to improve drought-resistant crops, etc.
But if a grant recipient has created an important new discovery or invention and, for some reason, hasn’t made a good-faith effort to bring it to market, Bayh-Dole permits the government to “march in,” seize the patent and license it to a company without the patent holder’s consent.
These march-in rights are meant to ensure commercialization of a product. They were never meant to be a price-setting mechanism. Yet that’s exactly what Biden now wants to do.
The White House “Fact Sheet” released on Dec. 7 states, “The Biden-Harris Administration believes taxpayer-funded drugs and other taxpayer-funded inventions should be available and affordable to the public.” (Emphasis added.) It’s that “other taxpayer-funded inventions” that should be a red flag to all researchers, universities and other research institutions.
Bayh-Dole was intended to make inventions “available,” but “affordable” was never part of the deal. And that’s the part Biden hopes to change by executive fiat.
While the prescription drug industry has been the one usually (though unsuccessfully so far) targeted for march-in rights, Biden has just opened the door to any and all taxpayer-funded research and innovation if bureaucrats don’t like the price.
In short, there is no invention that receives — or has received — taxpayer funding, regardless of how miniscule the amount, that is safe from government takeover.
Although the White House Fact Sheet and talking points imply that taxpayers are funding the lion’s share of the research that went into creating a new discovery or invention, taxpayer funding may represent only a fraction of the funds needed to develop, test and bring a new invention to market. Yet there is apparently no funding threshold below which the White House wouldn’t consider imposing march-in rights.
In addition, special interests of all types would be lobbying bureaucrats and politicians, trying to convince them that products created under Bayh-Dole were unaffordable and should trigger the law’s march-in rights. We know that will happen because it has already happened several times with certain prescription drugs. The National Institutes of Health has denied those petitions because price considerations do not trigger march-in rights — at least, not yet.
While the prescription drug industry and patients have a lot to lose if Biden’s price-control scheme is successful, they won’t be the only ones. Any research or invention, any patent, any college, university or other research institute that has any connection with taxpayer funding is threatened by Biden’s proposal. And that threat will have a huge negative impact on innovation.
Who is going to invent if the government can come in, at the urging of special interest groups, and seize a patent just because the government doesn’t like the price? When the government goes marching in, innovation goes marching out.