Cosmetic Solutions Won't Fix Serious Problems

Joe Allen
Guest Columnist
 

People of all political persuasions want serious issues to be addressed seriously. And the need to turn federally funded R&D into useful products is no exception. Unfortunately, we could get politically motivated solutions that  make the problems they claim to address even worse.

In the name of lowering drug prices, the Administration’s pending march-in guidelines would misuse the Bayh-Dole Act so the government can license copiers if a product isn’t “reasonably priced.”

But even its advocates admit this “solution” can’t work because the vast majority of drugs are protected by many patents, most of which are privately funded so they can’t be copied through the misapplication of march-in rights. Unfortunately, the proposal applies to all agencies, so it will knock the props out from under the Bayh-Dole system which helps drive our economy while making the U.S. a leader in innovation.

Will the Administration go ahead anyway seeking an election soundbite? Stay tuned.

NIH is floating the idea of requiring licensees of its intramural inventions to develop “access plans” promoting greater equity in using resulting products.  

Such plans could include allowing copiers to use IP the licensee developed independently for sales in underdeveloped countries, having the licensee donate products or selling at cost plus to the government and agreeing to link prices here with those charged abroad. There’s no indication NIH realizes this imposes new burdens on its licensees, and it offers no benefits for complying.

NIH doesn’t mention that companies are paying to get a license, that commercialization imposes enormous risks on them with a high probability of failure, that most licensees are small companies or that NIH is lucky to have even one licensee interested in a particular technology.

This effort may lead to a repeat of NIH’s disastrous “reasonable pricing” experiment of 20 years ago when industry partnerships collapsed. 

And lastly, we have the “Invent it here, make it here” legislation being considered in the Senate Commerce, Science and Transportation Committee which wants to amend Bayh-Dole’s domestic manufacturing procedure. The law currently requires that if a domestic manufacturer can’t be found to make a product in the U.S. that a waiver must be sought from the funding agency before it can be made abroad. 

The problem is that often a domestic manufacturer doesn’t exist. Most agencies ignore waiver requests, so inventions waste away, benefitting no one. But claims were made the universities are slipping technologies to China, so Washington reacted.

While the bill has been improved from its disastrous original form, it still does nothing to address the underlying issue:  we need to broaden our manufacturing base and assist universities and their licensees to find domestic manufacturers when they do exist.  

If the time spent grandstanding was spent seriously addressing the issues, we’d be a lot better off.