The FDA just approved the first drug based on CRISPR, the revolutionary gene-editing technology. The medication treats sickle cell disease -- a condition that overwhelmingly affects Black Americans -- by altering the DNA of bone marrow stem cells. For tens of thousands of suffering patients, the therapy offers hope of living without debilitating pain.
But the Biden administration seems determined to prevent such breakthroughs from happening in the future. The White House just released a proposal that would allow federal agencies to rip up patent licensing agreements between universities -- which may receive federal research funds -- and private companies, including biotech firms.
If the plan goes ahead, it will be a disaster for American workers and consumers, since thousands of high-tech products -- from medicines to computer components -- stem from university labs.
Weakening patent protections would strip away the incentive for companies to turn federally-funded researchers' promising ideas into tangible products -- thereby depriving consumers of life-changing, and even lifesaving, scientific and technological discoveries.
Research breakthroughs at universities are transformed into real-world products through a process known as "academic technology transfer." And that process is only possible thanks to an obscure 1980 law known as the Bayh-Dole Act, which allows universities to seek patents for research they've developed using federal grants -- and then license those inventions to companies for further development.
Prior to the Bayh-Dole Act, the federal government owned the patents on nearly all university research it had helped fund. But because the government generally wouldn't grant exclusive licenses to these patents, companies were uninterested in trying to commercialize them. In 1980, the government held some 28,000 patents, less than 5% of which had been licensed for further development.
After the law passed, companies had an incentive to invest in academic discoveries, because their exclusive licenses would protect them from rival firms unfairly copying the same technology.
Innovation boomed. Between 1996 and 2020, the tech transfer process enabled by the Bayh-Dole Act supported 6.5 million jobs, helped launch more than 17,000 startups, and injected $1.9 trillion into the U.S. economy. And it spawned roughly 126,000 patents and 495,000 inventions, including firefighting drones, airport scanners, numerous vaccines, the Google search algorithm, and CRISPR, a gene-editing technology used in the new sickle cell drug.
Researchers first discovered CRISPR more than two decades ago. With advancements from researchers around the world and help from federal grants in the early 2010's this technology was successfully applied to human cells. It took two drug companies, which licensed and further refined the technology, to transform the lab breakthrough into an effective, FDA-approved treatment targeted at a specific disease.
Under the new White House plan, the federal government could tear up licensing agreements on any product it considers too expensive, and relicense the patent to companies that will charge less. White House officials claim they have this power thanks to the Bayh-Dole Act's "march-in" provision.
That provision of the Bayh-Dole Act applies only in limited circumstances -- for instance, when a developer isn't bringing a product to market in a timely manner. It was never intended to grant the government price-setting powers. The law's original authors reiterated as much in a 2002 letter to the Washington Post.
Far from helping patients, twisting the march-in provisions into a price-setting mechanism would make new medicines less likely to ever come to market. Manufacturers need the period of exclusivity granted by patents to recoup extensive research and development costs. Allowing the government to relicense the patents to rival firms, if the researchers behind the original patent received even a dollar in federal grants, would discourage companies from licensing academic research in the first place.
The consequences go far beyond one drug. The White House's proposed framework would put the entire nascent class of CRISPR-based therapies in serious jeopardy. Since CRISPR was originally developed in part with the help of federal funds, any future CRISPR treatments could be subject to an abuse of the government's march-in powers.
The effects on research investments are not just theoretical. In the early 1990s the National Institutes of Health included a "reasonable pricing clause" in cooperative research and development agreements between government researchers, academia, and industry. Collaboration agreements stalled, and the ill-informed pricing policy was rescinded to "promote research that can enhance the health of the American people." Subsequently, cooperative agreements increased fourfold.
And while the Biden administration has said it plans to focus the use of march-in rights on pricey medications, the proposal is in fact industry-agnostic. It explicitly makes price "a factor" in deciding whether "a drug or other taxpayer-funded invention" requires intervention. In other words, companies in any sector that work with federally-funded research could lose their patents.
Using march-in rights to confiscate patents from private industry is a colossal big government overreach, akin to the early days of the Soviet Union when industries were nationalized and private ownership was effectively abolished. The policy has no place in the land of the free.
Thankfully, there's still time to shift direction. The National Institute of Standards and Technology -- the agency responsible for the proposal -- is accepting public comments through early February. Concerned Americans have an opportunity to speak up and convince the White House to abandon this counter-productive idea.
Dan Leonard is executive director of We Work for Health, which brings together business, labor, biopharma, and patient advocacy leaders to support policies and initiatives that foster innovation in healthcare.
