All informed, the regulation sparked a nationwide innovation renaissance that continues to at the present time. In 2002, the Economist dubbed it “possibly the most inspired piece of legislation to be enacted in America over the past half-century.” I think about it so important that after I retired, I joined the advisory council of a corporation dedicated to celebrating and defending it.
But the efficacy of the Bayh-Dole Act is now below severe menace from a draft framework the Biden administration is at the moment within the technique of finalizing after a months-long public remark interval that concluded on February 6.
In an try to manage drug costs within the US, the administration’s proposal depends on an obscure provision of Bayh-Dole that permits the federal government to “march in” and relicense patents. In different phrases, it could take the solely licensed patent proper from one firm and grant a license to a competing agency.
The provision is designed to permit the federal government to step in if an organization fails to commercialize a federally funded discovery and make it out there to the general public in an affordable timeframe. But the White House is now proposing that the availability be used to manage the ever-rising prices of prescription drugs by relicensing brand-name drug patents if they don’t seem to be supplied at a “reasonable” value.
On the floor, this would possibly sound like a good suggestion—the US has a few of the highest drug costs on this planet, and plenty of life-saving medication are unavailable to sufferers who can not afford them. But attempting to manage drug costs by way of the march-in provision shall be largely ineffective. Many medication are individually protected by different personal patents filed by biotech and pharma firms later within the improvement course of, so relicensing simply an early-stage patent will do little to assist generate generic alternate options. At the identical time, this coverage might have an unlimited chilling impact on the very starting of the drug improvement course of, when firms license the preliminary modern patent from the schools and analysis establishments.
If the Biden administration finalizes the draft march-in framework as at the moment written, it’ll enable the federal authorities to disregard licensing agreements between universities and personal firms every time it chooses and on the idea of at the moment unknown and doubtlessly subjective standards, comparable to what constitutes a “reasonable” value. This would make creating new applied sciences far riskier. Large firms would have ample motive to stroll away, and traders in startup firms—that are main gamers in bringing modern college expertise to market—can be equally reluctant to put money into these corporations.
Any patent related to federal {dollars} would seemingly develop into poisonous in a single day, since even one cent of taxpayer funding would make the ensuing client product eligible for march-in on the idea of value.
What’s extra, whereas the draft framework has been billed as a “drug pricing” coverage, it makes no distinction between college discoveries in life sciences and people in every other high-tech discipline. As a consequence, funding in IP-driven industries from biotech to aerospace to various vitality would plummet. Technological progress would stall. And the system of expertise switch established by the Bayh-Dole Act would rapidly break down.
Unless the administration withdraws its proposal, the United States will return to the times when probably the most promising federally backed discoveries by no means left college labs. Far fewer innovations based mostly on superior analysis shall be patented, and innovation hubs just like the one I watched develop could have no likelihood to take root.
Lita Nelsen joined the Technology Licensing Office of the Massachusetts Institute of Technology in 1986 and was director from 1992 to 2016. She is a member of the advisory council of the Bayh-Dole Coalition, a gaggle of organizations and people dedicated to celebrating and defending the Bayh-Dole Act, in addition to informing policymakers and the general public of its advantages.