Whether it’s for the next miracle drug or the next smartphone, product development is a slog. It can take years of research and millions of dollars in funding to bring a product to market. What makes this process feasible is that hopefully in the end, scientists and developers are able to patent their new product or technology, enjoy partial or complete control over their invention, and reap the rewards of years of hard work and investment.
But President Joe Biden wants to do away with that incentive.
The Biden administration is attempting to use a nearly 30-year-old law that will allow the National Institutes of Health to seize patent rights and mandate the price of these seized products.
This is a horrible plan that would put a nail in the coffin of American innovation and decimate our ability to compete with China.
Biden is passing this destruction of patent rights off as a way to bring down the price of drugs when, in reality, all it will do is disincentivize producers from investing in product research and development. While this action may lower drug prices temporarily, the damage to American innovation will be immeasurable.
The Bayh-Dole Act of 1980 allows contractors that receive government funding to retain ownership of their products. Bayh-Dole was designed to give innovators a leg up in funding for promising products and to encourage innovation in areas that the federal government had an interest in such as defense and healthcare.
Government helping, rather than hurting, innovation has allowed the U.S. to retain a competitive advantage over our adversaries. During the Cold War, massive investments in technology in public-private partnerships led to the creation of the internet, weather forecasting systems, and the GPS. Private citizens were then able to develop private computers, touch screen phones, and now artificial intelligence.
The very first personal computers were astronomically expensive. The IBM 4100 PC cost $8,975 in 1975 when it was first released, equivalent to over $41,970 today. However, due to public-private partnerships enabled through Bayh-Dole, the world today has phones with exponentially more computing power than the 4100 and at a price affordable to 97% of Americans.
Bayh-Dole has facilitated more than 13,000 startup companies and supported 5.9 million jobs since its passage in 1980. The Biden administration’s new NIH rules will reverse this prosperity. When the Biden administration can arbitrarily set the price of seized patents, then the private sector is encouraged to focus on research with the most potential to turn a quick profit. That research does not necessarily translate to groundbreaking innovations.
Technologies that changed the world, such as GPS, required massive amounts of money to perfect because researchers needed to be able to tinker, fail, and reconfigure the system. The first hand-held commercial GPS unit became available in 1989 at a price of $3,000, or $7,371 today. The entire GPS system costs roughly $12 billion today. Without it, the $1.4 trillion in U.S. economic growth it has driven would be nonexistent. Without any rights to their own patents, companies would eschew working with the federal government, or worse, find a foreign government that could commit resources toward their products.
China and other U.S. adversaries stand to gain from the Biden administration’s stretching of Bayh-Dole’s jurisdiction. The Chinese Communist Party’s Thousand Talents program has attracted thousands of researchers in the biotechnology space, and scientists who receive federal funding could be spurred to consider Chinese sponsorship. Massive intellectual property theft in the U.S. biotechnology space has also allowed China to accelerate its own biotech sector with the goal of displacing the U.S.
If the Biden administration can seize U.S. patents that receive even a sliver of federal funding, the federal government is incentivizing our best and brightest to seek foreign sponsors for their research. Researchers at over 71 institutions in the U.S. have already been receiving patents in China for products funded by federal grants and replicating research in China through academic partnerships. U.S. price mandates and patent seizures will make even more scientists develop products in China to the detriment of U.S. competitiveness and our healthcare system.
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Collaboration between the government and the private sector is one of the biggest strategic advantages that the U.S. has against China. Investing more resources into research and development is the only way the U.S. can stay ahead of Chinese state-sponsored innovation. The Trump administration made keeping manufacturing in or close to the U.S. a priority in order to bring back jobs and protect U.S. supply chains from relying on China. That has allowed the U.S. to dominate the global pharmaceutical market. The U.S. today is still responsible for half of all global pharmaceutical research and development and makes up a third of the international pharmaceutical market. The Biden administration should protect our existing innovative edge.
Lowering drug prices is an admirable goal for the Biden administration to pursue. The question of how to help the thousands of Americans who cannot afford their own prescription medications is indeed pressing. But seizing patents is not the answer. The Biden administration should partner with industry leaders to make medications more affordable while ensuring that innovators are not incentivized to take their research elsewhere.
Roy Mathews is a writer for Young Voices. He is a graduate of Bates College, and his work has appeared in the Washington Examiner, Wall Street Journal, and Boston Herald.
