• Freedom
  • Innovation
  • Growth

Eroding Patent Rights Threatens U.S. Cancer Patients

Real Clear Policy

Pancreatic cancer takes a devastating toll on American families. It's the third most common cause of cancer death in the United States, despite not being among the 10 most frequently diagnosed. The five-year survival rate is just 12%. And for the more than half of patients who are diagnosed at stage 4, that prognosis is an even dimmer 3%.

In August, researchers at Kansas City University made a potential breakthrough that could change that. They developed a therapy that prevents tumor cells from replicating by targeting the non-cancerous cells surrounding them, and they have applied for research grants that would enable them to start clinical trials.

But that's just the beginning. For the drug to actually reach patients, the university will almost certainly need to partner with a pharmaceutical company that can turn its research into a full-fledged treatment, mass-produce it, and market it to the public. 

Unfortunately, that may never happen. 

That's because the Biden administration is considering whether to abuse a 43-year-old law, the Bayh-Dole Act, by unilaterally relicensing any patents on drugs developed at Kansas City University and other academic labs across the country if that research received any amount of federal funds. Such a move would permanently upend America's entire scientific research ecosystem and gravely imperil patients' access to life-saving medicines.

For most of the 20th century, the government retained the patent rights on any academic discoveries that benefited from federal grants, regardless of the amount of money. At one point, the government held nearly 30,000 patents, but fewer than 5% of those patents were licensed to firms for commercialization. As a result, thousands of life-changing discoveries gathered dust.

The bipartisan Bayh-Dole Act of 1980 fixed that stagnation by permitting universities and other research institutions to retain their patents and license them, even if government funds helped support the research. Proceeds from these licensing deals help fund the institutions that developed them.

Bayh-Dole is indisputably one of the greatest U.S. legislative success stories. The law has been responsible for nearly $2 trillion in additional U.S. economic output, supporting over 6 million jobs in the process. Over 15,000 innovative startup companies have launched thanks to Bayh-Dole and the public-private cooperation it encourages. 

Cancer patients, in particular, benefit enormously from these public-private partnerships. Among dozens of other revolutionary treatments, Bayh-Dole is responsible for the late-stage melanoma drug Yervoy, landmark leukemia therapy Gleevec, and T-cell drugs for colon cancer, breast cancer, and Hodgkin's lymphoma.

And Bayh-Dole protections don't stop with cancer treatments -- or even medical research. The same goes for high-definition television, search algorithms, and even Honeycrisp apples, along with many other non-medical discoveries.

Thanks to Bayh-Dole, universities can license their researchers' discoveries to private firms that have the resources and expertise to turn them into usable products. University researchers rarely have the know-how or desire to commercialize such discoveries themselves. 

However, if a university licenses a patent to a company, and then the company doesn't commercialize it, Bayh-Dole gives the federal government the right to "march in" and relicense the patent to a different company that will. But the system has worked so well that march-in rights have never been needed.

Even so, cynical activists have invented a new interpretation, and use, for the march-in provision. They claim the government can march in on already-commercialized drug patents and relicense them to other companies to make knockoff versions. Indeed, a recent petition urged the government to march in on the patents for Xtandi, a prostate cancer drug developed with federal support. 

In March, the National Institutes of Health rejected that petition, as it has all similar petitions in the past. In both Republican and Democratic administrations, federal agencies have agreed that Bayh-Dole does not give the government the power to revoke licenses for a commercialized product, just because critics don't like the price. 

The Biden administration is encouraging the activists, creating a working group that's weighing whether "different factors, including price" may influence march-in assessments. 

Such a drastic change could obliterate confidence in the Bayh-Dole system. Investors would be reluctant to back efforts to commercialize promising discoveries -- whether they're drugs or other technologies -- if government officials can effectively dictate the price on any resulting products. 

It's no exaggeration to say that a cure for cancer depends on strong patent protections. The Bayh-Dole system has worked remarkably well. Yet the Biden administration seeks to break what has never been broken.