Support IPWatchdog with an individual sponsorship: Click here
“With the emergence of the guidelines, we found ourselves with our backs against the goal line. But we held because we found out that there are a lot more of us than we knew who were willing to stand up and push back.”
As we sort through the results of the recent election, one thing that should be noted is what didn’t happen. The Biden-Harris Administration, despite intense pressure from its progressive allies, never finalized the pending march in guidelines.
The draft guidelines, which issued late last year, were an attempt to misuse the landmark Bayh-Dole Act so the government could micro-manage the price of products based on federally-funded inventions. Critics of Bayh-Dole have tried for 20 years to turn the law, designed to decentralize technology management from Washington into the hands of those who make inventions in our public research institutions and companies, on its head so Washington could regulate prices.
Such attempts were uniformly rejected by every Democratic and Republican Administration as unwarranted under the law, until the guidelines appeared. They were touted by the White House as an important tool for controlling drug prices.
Turning Tide
Yet, something the Administration didn’t expect happened during the public comment period. Predictably, the supporters flooded the system with copycat letters saying, “we want cheaper drugs.” No surprise there. But the Administration was probably not prepared for the other reactions. Not only did those owning inventions because of the law object, but so do did small companies, venture capitalists, manufacturers, patient groups and most surprisingly, the generic drug industry, which was supposed to be the primary beneficiary of the effort.
You see, generic drug makers also have research costs. They realized that if anyone could petition the government for a license to a federally funded invention because they could make it cheaper than the original developer, that double edged sword would also be applied against them in a race to the bottom.
The Administration was probably also stunned that the guidelines generated bipartisan opposition, including that of Senator Chris Coons (D-DE), co-chair of the Biden (and later Harris) election campaigns. Congressional opponents pointed out that the proposed guidelines had no statutory basis and would have a devastating impact on American innovation, inflicting serious damage to our struggling economy. And the state of the economy was Issue #1 in the election, according to the voters.
While supporters like Senator Bernie Sanders (I-VT) and Elizabeth Warren (D-MA) sent increasingly shrill letters pressuring the Administration to act, their legs were cut out from under them by a study showing that misusing march in rights would have little impact on drug prices for a simple reason—the vast majority of drugs have multiple patents around them with few based on government supported R&D. Thus, even if the misguided effort went forward, it could never lower drug prices.
Warren and Sanders replied that the government should seize privately funded patents as well. That was a bridge too far for an Administration fighting for its life.
The Retreat
There were rumors throughout the year that the final guidelines would issue at any moment. But they never did. We don’t know why, but here’s a guess: someone in the White House realized this was a political loser. They already had the progressive vote but the wide array of interests warning them against undermining Bayh-Dole in the face of fierce Chinese efforts to eclipse our technology lead, coupled with the harm it would do to American economic development, stayed their hand.
There’s still a chance the guidelines may issue before the Biden-Harris Administration leaves office in January. But in the words of President Lincoln, that would be: “The last shriek on the retreat.”
A Big Win
This year, we found ourselves playing defense against efforts to weaken Bayh-Dole. With the emergence of the guidelines, we found ourselves with our backs against the goal line. But we held because we found out that there are a lot more of us than we knew who were willing to stand up and push back.
Because of that success, we now have the opportunity to present a positive message to the new Administration and Congress touting the benefits to the economy and public well-being because of our unique, decentralized system of public/private sector R&D alliances.
This is a big win. Savor it.
Image Source: Deposit Photos
Author: rudyumans
Image ID: 112485370
