Op-Ed by David Williams, President of the Taxpayers Protection Alliance
From job cuts to funding freezes, the National Institutes of Health (NIH) has been dominating headlines. While this reporting has focused on the Trump administration, a parting policy from former-President Biden has all-but-escaped notice. Just a few days before leaving office, the Biden administration quietly set the stage for a government takeover of drug researchers’ intellectual property (IP) for medications developed with the help of the NIH. This reversal of longstanding policy will mean fewer life-saving drugs coming down the pike and make researchers think twice before partnering with the NIH. President Trump must reverse this pharmaceutical fiasco and put scientists back in the drivers’ seat.
In a troubling trend, departing Presidents save some of their costliest, most destructive, and most controversial policies for their last days in office. Former President Biden offered a masterclass in making these “midnight rules.” While researchers partnering with the NIH to develop a drug are usually required to submit a bare-bones plan on how they will commercially develop that drug to obtain a patent, the Biden administration wanted to go way further. On January 10, the Biden administration snuck in a stipulation to NIH guidelines that development plans must address “criteria of availability, affordability, acceptability, and sustainability.” In other words, if the NIH doesn’t think that a medication is priced fairly, it could hold onto the patent and tell drug developers to fly a kite — even after investing considerable time and money into the therapy. And, given that Department of Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. seems fond of using the heavy hand of government to seize patents, this Biden-era provision could likely get a lot of use.
Underlying this policy is an expansive and flawed interpretation of an otherwise-admirable statute. Passed in 1980, the Bayh-Dole Act paved the way for patent-fueled growth by allowing individuals and private institutions the ability to gain title for inventions whose creation involved federal funding. Since 1980, American universities’ rate of patent generation has increased tenfold. According to figures cited in The Economist, these research institutions have “spun off more than 2,200 firms to exploit research done in their labs, created 260,000 jobs in the process, and now contribute $40 billion annually to the American economy.” Under this pro-innovation system, agencies such as the NIH could partner with researchers and give researchers the IP needed to shepherd innovations into the marketplace.
Unfortunately, the legislation opened the door to “march-in” rights, which allow regulators to withhold this IP from researchers to “alleviate health or safety needs,” ensure “practical application” of the product, provide for domestic manufacturing, and maintain compliance with various federal regulations. While these conditions are sloppily written into the law, they are not an invitation for bureaucrats to price-fix drugs. Yet, Biden’s NIH guidance seems designed to do exactly that by allowing the agency to veto drug pricing plans based on “affordability” concerns.
History offers a disturbing preview of the result of this anti-IP policy. In the 1990s, the NIH tried its hand at enforcing a “reasonable pricing” clause for licensees partnering with the agency. Partnerships predictably collapsed as a result, and then NIH Director Harold Varmus was forced to backtrack. He rightly admitted, “the pricing clause has driven industry away from potentially beneficial scientific collaborations … without providing an offsetting benefit to the public.”
Now’s not the time to double-down on this costly mistake. President Trump should remove this harmful guidance immediately and allow NIH to award innovators with the fruits of their creation. By protecting IP, policymakers can ensure that patients have ample access to life-saving drugs.
David Williams is the President of the Taxpayers Protection Alliance.
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