Collaboration between public and private partners is a catalyst for innovation. As the saying goes, “If you want to go far, go together.” That’s why Congress enacted the revolutionary bipartisan Bayh-Dole Act, which encourages small businesses and non-profit organizations — including universities — to participate in technology transfer activities that bring research from the theoretical in the lab to the practical product in the marketplace. For more than 40 years, Bayh-Dole has inspired public-private partnerships that have, in turn, expanded access to life-changing technologies and spurred economic growth, but that growth is at risk.
According to some estimates, the Bayh-Dole Act has contributed close to $591 billion to U.S. gross domestic product and supports around 4.2 million American jobs. In the life sciences sector, Bayh-Dole relationships have delivered hundreds of new medical treatments. In contrast, before Bayh-Dole’s implementation, not a single pharmaceutical product had been brought to market from federally funded inventions.
The authors of Bayh-Dole wanted every potentially useful federally funded discovery to have a shot at commercialization so that the public could have access to it. So, they created a “march-in” clause to allow the government to force the owner of the original discovery to grant additional licenses if, and only if, good faith efforts were not being made to bring the discovery to market. In fact, the authors explicitly confirmed that “march-in” rights were never intended as a price control mechanism.
However, some members of Congress today have misconstrued that intention, falsely claiming that the government should force the owner of the original discovery to grant additional licenses if it decides the resulting product is too expensive. As Sens. Thom Tillis (R-N.C.) and Marsha Blackburn (R-Tenn.), two recognized experts on intellectual property law and technology transfer, put it: using Bayh-Dole as a price control mechanism “contradicts [the law’s] purpose and function.”
If we sacrifice Bayh-Dole’s purpose and function, we sacrifice its incredible impact on people and patients around the world. Using Bayh-Dole to set price controls would decimate America’s life sciences innovation ecosystem and destroy the pipeline of cures patients are counting on.
For example, consider the Bayh-Dole-driven success of Xtandi — the only novel hormone therapy approved by the FDA to treat three types of advanced prostate cancer. The University of California, Los Angeles (UCLA) discovered Xtandi’s foundational molecular component using less than $500,000 in government funding. Then, pharmaceutical company Astellas and its partners licensed the patent rights to this unproven molecule from UCLA and spent almost $2.2 billion in additional research, pre-clinical studies, and clinical trials to bring a proven safe and effective, treatment-ready drug to hundreds of thousands of patients. Would Astellas have taken on this extensive work and made these incredible investments if they’d known that the government might hijack all the work and sell it to a competitor? Absolutely not. And if they hadn’t, hundreds of thousands of patients would not have access to this life-changing and life-saving innovation.
That’s the question American biopharmaceutical innovators are asking themselves as policymakers debate whether to weaponize Bayh-Dole’s “march-in” clause. It’s not hard to imagine that many companies are losing faith in the system and aren’t willing to take the necessary risks to enter into new Bayh-Dole partnerships out of fear of government price controls and forced tech transfer.
That means less collaboration, less innovation, and less access to innovation. At a time when the U.S. is engaged in a global competition for innovation leadership, this is a recipe for disaster. We cannot risk upending a highly-successful legal framework that has worked for four decades simply on the basis of false narratives. Congress must resist any actions that might weaken the technology transfer ecosystem established under the Bayh-Dole act and instead do anything and everything it can to support its continuation.
Brad Watts is the Vice President for Patents and Innovation Policy at the U.S. Chamber of Commerce’s Global Innovation Policy Center (GIPC).