Innovation lies at the heart of America’s economy. Not only does it bring revolutionary new products to consumers but it also serves as an engine of growth that uplifts all Americans.
This is only possible because our laws and institutions are designed precisely to incentivize the risk-taking needed to bring novel ideas from concept to reality. You’d think any president would want to do whatever it takes to maintain this competitive edge. Unfortunately, the Biden administration is starting 2024 with another blunder threatening future economic success.
Our status as the world’s engine of innovation didn’t happen by accident. America’s laws protect businesses in such a way that they can rest assured the research, development and risk will be profitable in the end. This pays dividends in the long run — the Department of Commerce determined in 2010 that technological innovation was responsible for three-quarters of America’s economic growth rate since World War II. That’s not just progress; it’s a testament to our commitment to staying ahead in the race for ideas.
The Bayh-Dole Act plays an important role in this pursuit of innovation. The law incentivizes private-sector development of discoveries made through federally funded research by allowing universities and other research institutions to license patents to private partners. With the promise of intellectual property protections, public-private partnerships have thrived since the law was passed in 1980, especially in medicine. Since then, more than 200 vaccines and drugs have been developed through such partnerships.
This isn’t limited only to drugs, vaccines and therapeutics. Bayh-Dole encourages public-private partnerships that bridge the gap between research and commercialization across many sectors of our economy. The law can be credited with numerous innovations that are changing the world for the better. Just look down at your phone — touch-screen technology, semiconductors, and Google have all been shaped by Bayh-Dole.
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Despite this clear success, the administration is now looking to overhaul the entire Bayh-Dole framework and use the law in a manner for which it was never intended. The government’s new plan would widen the application of Bayh-Dole’s “march-in” rights provisions to consider the price of a product as an excuse to relicense patents. In short, the administration wants the government to be able to take over the patent rights if it does not agree with the pricing of the products formed out of it.
At its core, the administration’s proposal is a threat to the American taxpayer. The Bayh-Dole Act works to ensure that taxpayer-funded research is actually used to benefit taxpayers. According to the Government Accountability Office, fewer than 5 percent of 28,000 patents in the hands of government agencies were licensed before Bayh-Dole. Abandoning the current application of the law to impose price controls would scare off private collaboration and take us back to a time when taxpayer-funded research often hit a dead end, doing nothing for patients, consumers and society at large.
Looking ahead, it is in the nation’s best interest to ensure that the United States continues to lead the world on innovation rather than ceding ground to foreign competitors like China. The Chinese Communist Party is clear in its intention to replace the United States as the world’s leading innovation economy. In fact, China has been doubling down on investments in research and development in a bid to catch up.
China’s share of global R&D spending reached nearly 25 percent in 2020.
Undermining the legal advantages current law provides American companies would only allow other countries to supplant the United States in global market share. This would serve to weaken America’s growth and stick American taxpayers and consumers with the baggage of a waning economy.
If the United States is to maintain its economic advantages, plans to abuse the Bayh-Dole Act must not come to fruition. Lawmakers on both sides of the aisle should call out the administration and push to prevent this abuse of power from seeing the light of day. As the administration considers input from stakeholders on this crucial issue, it must not overlook the clear warning signs that show taxpayers, consumers and our economy would suffer under the future laid out by its new framework.
David Williams is president of the Taxpayers Protection Alliance. He wrote this for InsideSources.com.
The Trust Project
