Not All Ivy League Professors Want to Gut American Innovators' IP
By Wolfgang Klietmann
Some Ivy League academics recently laid out ways in which they think the Biden administration can intervene, under existing law, to cut prescription drug costs.
All Team Biden has to do is ignore the plain meaning, text, and legislative history of the law at issue, as well as numerous court rulings running explicitly counter to the view the professors espouse. Oh, one more thing. President Biden will have to unilaterally gut America's patent system.
What could go wrong?
Activists have been touting the letter as something like holy writ -- the combined judgment of two of America's most prestigious institutions of higher education, Harvard and Yale. As a former lecturer at Harvard Medical School myself, I can assure you the letter is no such thing. The authors are speaking only for themselves.
Nor is the substance of the letter new. Exactly the same argument has been making the rounds for 20 years by now, rejected by administrations of both parties.
The importance of patent protection has been well understood in this country since its founding. Article 1, section 8 of the Constitution empowers Congress "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." Congress has done just that. One such landmark piece of legislation is the 1980 Bayh-Dole Act.
Prior to Bayh-Dole, the patent rights to any inventions supported by taxpayer money became the property of the federal government. But the government isn't in the business of developing commercial applications for scientific discoveries. Nearly 30,000 government-patented discoveries were sitting idle before Bayh-Dole.
Bayh-Dole solved this problem by letting universities hold the patents, allowing them to license their discoveries for commercial development -- a powerful incentive that has opened a floodgate of innovation.
The law has a protective proviso, however, designed to ensure patented discoveries are made available to the public. If they aren't, the government reserves the right to "march-in" and issue a patent license to a third-party who will make the product available.
That's the point at which the Ivy League professors themselves come marching in. They want the government to use this provision to license cheap generic copies whenever officials deem the price of a medication to be too high -- especially in cases where the government has made even a minuscule funding contribution to the preliminary research.
This gross misreading makes a mockery of the law's intent. Senators Birch Bayh and Bob Dole, the authors of the legislation, wrote in 2002 that "Bayh-Dole did not intend that the government set prices on resulting products." But what would they know?
Legal debates aside, twisting Bayh-Dole to achieve the admittedly popular political goal of lower drug prices would be a disaster for future innovation.
This is not a speculative conclusion. In 1989, the National Institutes of Health tried imposing a "reasonable pricing" rule for products resulting from public-private cooperation. As soon as the rule took effect, collaboration between private developers and the government collapsed. NIH repealed the rule in 1995. One year later, such collaborations were going strong again.
Bayh-Dole alone has spurred approximately $1.7 trillion in additional economic output and fostered the creation of more than 15,000 startups. These advances would be wiped out if the federal government heeds the advice of the professors.
Dr. Wolfgang Klietmann is a former clinical pathologist and medical microbiologist at Harvard Medical School. This piece originally ran in Boston Herald.
