Biden’s facing a defining moment on US innovation policy

For nearly two years, progressive activists have lobbied the Biden administration to weaken international patent protections on COVID treatments. The political pressure was immense. And at several points, it seemed like some officials were ready to cave.

But fortunately for American innovation — and patients worldwide — the Biden administration recently rejected these requests. At the World Trade Organization meeting that recently wrapped up in Abu Dhabi, the U.S. delegation refused to lend its support to the proposal, effectively killing it for now. 

Let’s hope this decision serves as a template for other pending issues that could deal a body blow to our economic development and the well-being of our citizens. The future of America’s innovation economy is literally on the line.

Waiving patent protections for COVID-19 diagnostics and therapeutics would have done nothing to help patients, given the reality that the global supply of these products already far outstrips demand.

But its ramifications would have been disastrous. Diluting patent protections — and the security they afford scientists, entrepreneurs and investors alike — is a surefire way to stifle the further creation of ground-breaking and life-saving technologies.

The Biden administration declined to take a formal position ahead of the Abu Dhabi gathering. But dashing activists’ hopes, the U.S. supported innovation over political talking points.

While the U.S. and global economy would benefit from greater upfront American clarity and straightforwardness in support of IP rights, the administration did successfully apply the “do no harm” principle at the WTO.

Now, it faces a more serious test at home. The same voices urging the U.S. to give our COVID therapies away are working to undermine a centerpiece of American innovation, the Bayh-Dole Act, which Congress enacted with support from then-Sen. Joe Biden in 1980.

Prior to Bayh-Dole, Washington laid claim to patent rights for all research that received even a penny of federal funding. As such, there was no incentive for businesses to invest the resources necessary to take these discoveries out of the lab and turn them into useful products benefiting the public here and abroad. Less than 5 percent of the 28,000 patents held by federal agencies at the time were ever licensed and not a single new drug was developed when the government took the invention away from its creator.

In response, Sen. Birch Bayh, a Democrat of Indiana, and Sen. Bob Dole, a Kansas Republican, devised a revolutionary new approach. 

The Bayh-Dole Act, which I had the honor to help draft, awarded universities and small companies control over federally supported discoveries, allowing them to grant licenses for development. It launched a new era in American innovation, generating some $1.9 trillion in gross industrial output, over 6 million new jobs, 17,000 start-up companies, 126,000 patents and 495,000 inventions. Among its fruits were quantum computing, advanced ultrasound imaging, the Google search algorithm and a host of life-saving therapies.

But last December, a working group within the Biden administration put forward a framework that would gut Bayh-Dole. It permits Washington to “march in” to impose artificial price controls whenever someone feels a product’s price is “unreasonable,” a completely undefined term. 

That turns the law on its head, putting a target on the back of any company that brings these technologies to market after investing the considerable time and money necessary for development. And under our system, this burden is assumed by small companies, which take the hit when these efforts fail, as happens more often than not. 

That’s why every administration, Democratic and Republican, including the Biden administration, has rejected attempts to misuse the Bayh-Dole Act so that copiers could use it to harass innovators, until now.

The proposed misuse of the law would send us back to the pre-Bayh-Dole era when U.S. industries avoided working with our research universities and federal laboratories. Promising research that may offer cures to global hunger, cancer and climate change would again be immediately imperiled.

During the recently closed public comment period, the administration got an earful about the disastrous impact of the proposed framework from universities, small business entrepreneurs, patient groups, venture capital and manufacturers from a wide range of industries. These voices made the case that efforts to turn Bayh-Dole into a price-control mechanism would not lower prices but would inflict immense harm on innovation.

Like the WTO decision but with even greater consequences, this is a matter of life or death to the U.S. economic engine. Let’s hope that once again President Biden chooses the “do no harm” option. The stakes couldn’t be higher. 

Joseph P. Allen is executive director of the Bayh-Dole Coalition.