Dec 7 (Reuters) - The Biden Administration on Thursday announced it is setting new policy that will allow it to seize patents for medicines developed with government funding if it believes their prices are too high.
The policy creates a roadmap for the government’s so-called march-in rights, which have never been used before. They would allow the government to grant additional licenses to third parties for products developed using federal funds if the original patent holder does not make them available to the public on reasonable terms.
Under Bayh-Dole, the National Institutes of Health (NIH) has the power to seize patents of federally-funded medicines, but the agency’s former director Francis Collins said it did not have the authority to use march-in rights to lower drug prices.
The problem is that this is a trick that can only be done once. Investors, who spent $100s of millions to develop drugs, in expectation of a chance of hitting a blockbuster and making billions, but sees the large tail end of the profit taken away by government, obviously won’t do it again.
Apparently, the law applies only to drugs that the government paid to develop, not drugs that were privately funded. The Constitution makes the government the protector of private IP rights, via patent and copyright laws. But what if it is the government paying the freight? Are the “JCs” entitled to private profit protection, when they did not pay any of the costs?
Most basic research for drugs begins with govt funding at the college/university level. If the research looks like it might have promise, the school will offer it for license by commercial drug companies. Those researching the drug (prof who got the funding from the govt plus the grad students) typically work with the drug company, who then takes it over. After all, they know the drug the best.
The vast bulk of the cost (“investment”) of getting new drugs to market isn’t in the discovery phase of the drug. The Internet says that Katalin Karikó has a net worth of about $5M, but that says nothing about the success and profit generated by the drug she discovered.