President Joe Biden has crossed the line from ill-advised policy to government theft of intellectual property in the White House’s latest economically disastrous move.
The Biden-Harris administration’s announcement of its proposed framework on the use of “march-in rights” to seize patents from certain taxpayer-funded drugs is a clear regulatory overreach, distorting the 1980 Bayh-Dole Act. The administration’s manipulation of this law, designed to incentivize private-public collaboration, will have the opposite effect, serving as the ultimate deterrent for research and investment in critical new cures.
This use of the Bayh-Dole Act also sets a dangerous precedent for federal intervention across a variety of industries.
Under Bayh-Dole, the government retains certain reclamation rights for products created through public-private sector partnerships. This includes the right to confiscate patents on taxpayer-funded medical innovations not receiving proper commercialization to make them more accessible to the public. Instead, the White House has cravenly chosen to interpret march-in rights to mean that “price can be a factor in considering whether a drug is accessible to the public.”
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After years of urging from socialists in the Democratic Party, so-called “moderate” Biden has yielded to their economically illiterate demands. Government seizure of patents on drugs arbitrarily deemed “too expensive” is not only a blatant regulatory overreach and a gross misinterpretation of the law, but it also sets a perilous precedent that threatens property rights at large.
I am no stranger to the healthcare regulatory and policy landscape. I served in the Department of Health and Human Services during the George W. Bush and Trump administrations. No member of our team would ever consider something that so oversteps the government’s regulatory authority and violates key elements of our democracy. Even considering Biden’s left-wing tendencies, the decision to revoke drug patents based on arbitrary cost considerations is nothing short of appalling.
There is a fundamental difference between a drug that is inaccessible due to lack of marketing and a drug that is inaccessible due to its price point. To prevent this misinterpretation, former Sens. Birch Bayh (D-IN) and Bob Dole (R-KS) say this outright in a 2002 Washington Post op-ed: “Bayh-Dole did not intend that government set prices on resulting products. The law makes no reference to a reasonable price that should be dictated by the government.” They continue, “The law we passed is about encouraging a partnership that spurs advances to help Americans.” Furthermore, former National Institutes of Health Director Francis Collins has also stated that the NIH does not have the authority to use march-in rights as a means to lower drug prices.
Respected leaders from both political parties, Bayh and Dole, understood that the threat of government seizure of intellectual property rights could destroy the type of partnerships the law was created to protect. The White House is evidently not afraid to employ political tactics that are unconstitutional and unethical and to ignore basic market realities. Heading into the election year, Biden prioritizes political rhetoric over effective healthcare policy. This, in turn, harms patients who rely on life-saving medicines and cures across the United States.
When economic incentives make investing in the development of new medication unprofitable and increasingly unpredictable, the market will respond. If march-in rights are utilized in the way Biden intends, there is no guarantee that the right to intellectual property will be protected. If that is the case, why would drugmakers work in tandem with the federal government, spending endless funds and hours developing new cures just to see their right to their products potentially ripped away from them?
If the key driver of innovation (the ability of innovators to have a patent on their inventions) is removed from the equation, researchers and developers will use caution when investing resources into creating new cures and decrease public-private collaboration significantly. As applied to drug prices, march-in rights represent the most extreme, dangerous kind of infringement of property rights. Many people do not understand the severity of this problem and think that those affected will extend solely to drugmaker executives. However, patients in need across the country rely on the type of new and innovative medications, treatments, and cures that public-private sector collaboration provides — cures that may never come to fruition if the administration succeeds in its plan.
Don’t be fooled: Biden’s attempt to justify the revocation of intellectual property rights based on ever-moving goalposts and whims of left-wing bureaucrats won’t stop with the pharmaceutical industry. Any industrial or research sector that receives government funding could be next. Biden’s misinformed invocation of march-in rights, which effectively amounts to centrally planned price controls, is one more example of regulatory tyranny in the White House’s campaign to enact a socialist vision for our economy that puts patients last. The even bigger question is if this is permitted, which industry is next?CLICK HERE TO READ MORE FROM THE WASHINGTON EXAMINER
Jack Kalavritinos is the executive director of CPAC’s Coalition Against Socialized Medicine.
