Oh when the bureaucrats are marching in – Newton Daily News

By Dr. Walter G. Copan

Bureaucrats are debating whether to take away patent rights on Xtandi, a prostate cancer drug, from its manufacturer. Activists have complained that the medicine’s price is too high. They argue that because of the molecule behind the drug originating in the Bayh-Dole Act, 1980 .

That’s not just a misreading of the law – it’s a disastrous idea that could effectively destroy the legal basis for public-private research partnerships that bring new products to American consumers.

The Bayh-Dole Act allows universities, research institutes and small businesses to invent, own and license patents from their research – specifically from research supported by federal funding. Prior to Bayh Dole, the federal government held those patent rights – and bureaucrats rarely licensed any patents to companies capable of turning good inventions into tangible products.

Public-private partnerships nurtured by Bayh-Dole have more than 15,000 startup companies and contributed almost $ 2 trillion to the US economy. Researchers estimate that the law’s technology transfer provision supports 6 million American jobs.

The law requires any company that licenses these patents to make them and produce real-world products. If a company licenses a patent, but then just invests what is necessary to bring it to market – the government can “march in” and relieve the patent to a firm, expensive work.

But activists are now calling on the government to use them as they de facto price control, and march simply because they believe in product costs too much.

However, Bayh-Dole’s march-in power was never intended to be used to micromanage prices from Washington.

Many university inventions come to market through startups, involving significant personal and financial risk. However, if their property rights are not secure, entrepreneurs will eventually fail. If the government does not have to take the risk of licensing a research university that involves even a dime of federal funding.

This is not theoretical. In the late 1980s, the National Institutes of Health imposed a so-called “reasonable price clause” for all public-private cooperation agreements. As soon as the rule went into force, the bottom fell out of these partnerships.

The effects of the rule were so disastrous that the NIH Director Harold Varmus scrapped the policy in 1995, saying it had “driven industry away from potentially beneficial scientific collaborations.” The year after this “government price control” provision was repealed, the number of public-private cooperative agreements more than doubled.

We should not repeat the same mistake, especially on the heels of a pandemic that promotes the vital role that technology transfer plays in developing vaccines and therapeutics as fast as humanly possible. If the Biden administration fails to protect the Bayh-Dole Act, it could spell disaster for American consumers and workers alike.

Walter G. Copan, PhD, is the former director of the National Institute of Standards and Technology. Colorado Advisers & Co-Founder at the Renewing American Innovation Project at CSIS.


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