“When we do come up with a vaccine (or more than one) the government is going to be the buyer…. And, if necessary, the government has the power to seize business assets (including inventions) to allow it to deal with a national emergency first and worry about fair compensation later. So, you’ll spend your time a lot more wisely worrying about where to find toilet paper than fretting about the cost of a coronavirus vaccine.”
The world is teetering on the brink of a public health and economic catastrophe, depending on emergency partnerships between our public and private sectors to develop a successful treatment for the coronavirus. If there was ever a time to be thankful that we have policies in place making that possible, it’s now. But there are those who want to use this crisis to return to the failed policies of the past.
Here’s the bottom line: the Bayh-Dole Act works. It allows the private sector to collaborate with universities and federal laboratories, like the National Institutes of Health, knowing that intellectual property they bring into such partnerships will be protected. It also allows academic institutions and federal labs to determine what type of license is best suited to promptly commercialize their inventions.
But some want to return us to the days when the government seized inventions made with even small levels of federal funding. Because they were only available through non-exclusive licenses, they gathered dust on the shelves as the incentives needed to take them from the lab into the marketplace were destroyed. As one of Napoleon’s ministers said of such foolish policy choices: “It was worse than a crime. It was a blunder.”
There’s no room for unforced blunders right now.
An opinion piece in The New York Times titled “Drug Companies Will Make a Killing from Coronavirus” claims “unless we fix the system, American taxpayers will get gouged on a vaccine they paid to produce.” For a solution, the article praises a letter to the President signed by 46 members of the House of Representatives. They wrote:
Specifically, we urge the Department of Health and Human Services (HHS) not to provide an exclusive license to any private manufacturer for a coronavirus vaccine or treatment in any government grants, contracts, or licensing agreements. Providing exclusive monopoly rights could result in an expensive medicine that is inaccessible, wasting public resources and putting public health at risk in the United States and around the globe. If HHS or any other federal agency moves forward with such a proposal, we urge you to instead issue a limited license and implement requirements that a vaccine or treatment be made available at an affordable price.
Ironically, not long ago similar Congressional voices objected to the issuance of an exclusive license to develop a Zika vaccine invented by the Department of the Army on the same grounds as those now being trotted out. The deal fell through and that vaccine is still sitting on the shelf. No company expressed any interest in taking a non-exclusive license to develop it. “(see “Bernie Sanders’ Really Bad Idea”).
Those who forget history are doomed to relearn the same lessons at greater cost. In 1968, President Lyndon Johnson asked the Comptroller General a simple question: how many drugs were being developed from National Institutes of Health (NIH) funded research? The answer—none, when the government took inventions away from their creators and tried to license them non-exclusively. That was one of the reasons that Bayh-Dole was enacted. Since its creation more than 200 new drugs and vaccines are protecting health around the world. And once we allowed our public and private sectors to effectively collaborate, the U.S. became the undisputed leader in the life sciences. The industry is largely driven by innovative small companies, which have some of the most promising therapies to meet the current crisis.
Bayh-Dole is Critical in Developing the Most Promising Coronavirus Fix
The potential coronavirus vaccine generating the most hope came about because of a partnership between a young biotech company, Moderna, and scientists at the National Institute of Allergy and Infectious Diseases, headed by Dr. Anthony Fauci, America’s most reliable expert in the current crisis. NIH and academic research institutions are working diligently with Moderna to move it through the necessary tests and evaluations. They can proceed at full speed because the Bayh-Dole Act ensures that if an invention is made during that process, Moderna can obtain sufficient rights to move to market ASAP. The last thing we want at this stage is to hamstring the company leading the charge by requiring that a critically needed vaccine can only be developed non-exclusively.
The critics also insist that the government is assuming the risk and expense of development, which is simply not true. The companies that dropped other promising projects to shift their resources into working 24/7 on the coronavirus are taking a huge gamble that may never pay off. To imply they are doing so to gouge the public is reprehensible.
Without Industry, We’re Sunk
Luckily, not everyone is drinking the Kool Aid. Rich Lowery wrote an effective rebuttal in National Review titled “Only the ‘Crooks’ Can Save Us Now.” He says:
A specter haunts progressive America — the possibility that a company might make too much money solving the world’s coronavirus problem…
When faced with what’s been called a once-in-a-generation pathogen, would we rather have a robust commercial drug industry or not? Brilliant, creative people scattered throughout companies and universities working to be the first to a solution or not? Investors looking to back promising research or not?
If your answer to any of these questions is “no,” you are probably a socialist, a populist firing at the wrong targets, or someone incapable of doing basic cost-benefit calculations…
It is a marvel that the National Institute of Allergy and Infectious Diseases is already working with a Cambridge, Mass., company, Moderna, on a vaccine trial. This is a model of public-private cooperation. Anyone who would want to subtract Moderna from the process because it stands to profit is an ideological zealot heedless of public health.
This crisis brings home the incalculable value of a world-class pharmaceutical sector. We can continue to shelter in place or hope that the “crooks” pursuing breakthrough drugs and treatments make the current disruptions in our national life completely unnecessary.
When we do come up with a vaccine (or more than one) the government is going to be the buyer. It will be doing so in the necessary quantities, under federal acquisition rules and regulation purchasing contracts that ensure favorable pricing for the United States. And, if necessary, the government has the power to seize business assets (including inventions) to allow it to deal with a national emergency first and worry about fair compensation later. So, you’ll spend your time a lot more wisely worrying about where to find toilet paper than fretting about the cost of a coronavirus vaccine. It will be up to public health authorities to ensure that it’s readily available (the vaccine that is, unfortunately not toilet paper).
Hold Their Coats
The eyes of the world have anxiously turned to the United States of America looking for salvation as the coronavirus ravages the globe. We are the undisputed leaders in developing critically needed new medicines because our patent system promotes innovation while the Bayh-Dole Act ensures we can seamlessly form public/private partnerships. As a result, our best minds are working diligently to save us.
President Lincoln said of the critics carping from the sidelines during the Civil War: “If you won’t fight yourselves, at least hold the coats of those who will.” I don’t know about you, but I am profoundly grateful to those in industry and government who are working tirelessly to protect us in a real crisis. Now’s not the time to take away the tools they need to succeed. We better get this one right. The stakes have never been higher.
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Joseph Allen is a Featured Contributor on IPWatchdog.com, and a 30-year veteran of national efforts to foster public/private sector commercialization partnerships, and author of numerous articles on technology management for national publications.
Joe served as a Professional Staff Member on the U.S. Senate Judiciary Committee with former Senator Birch Bayh (D-IN), and was instrumental in working behind the scenes to ensure passage of the historic Bayh-Dole Act. He is our resident Bayh-Dole expert, and will write frequently about Bayh-Dole and issues surrounding the commercialization of university research.
In 2008, Joe founded Allen & Associates, through which he offers consulting services assisting clients in technology transfer issues, including developing effective communication strategies with national policy makers.