Stolen innovation cuts out taxpayers | Opinion

They'd like you to think it's a big old group hug, but what the liberal lawmakers and activists who have locked arms in Washington are really trying to do is choke the life out of American innovators. They're pressing Washington bureaucrats to seize control of the patents for a new prostate cancer drug so bureaucrat-friendly producers can step in and offer their versions of it.

If their big squeeze succeeds, it will crush a 42-year-old system that has turned basic scientific discoveries in government-funded labs into useful, sometimes life-saving, commercial products. Folks, if you think this will stop with this drug, think again. It would kill innovation throughout the economy.

The Bayh-Dole Act

The 1980 legislation known as the Bayh-Dole Act was a turning point in American innovation. Before Bayh-Dole, the federal government kept hold of the intellectual property rights created in labs — including the labs at major research universities like Vanderbilt and the University of Tennessee — funded by taxpayer dollars.

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That worked about as well as the government usually does. Fewer than 5% of the 28,000 patents the government held at the time ever got licensed for commercial development. That's right, more than 26,000 were wasting away, locked up like gold in Fort Knox.

Except unlike gold, patents need to be put to use to have value. So Bayh-Dole allowed universities themselves to keep title to the patents from their labs. That released their locked-up value, as universities licensed them for a fee to private companies to do the heavy lifting of development. Imagine that: the shift from government control to private control of intellectual property rights created an incentive for development where before there was none. The developers, the universities, the people all won.

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Bayh-Dole has been a rollicking success nationwide, unleashing inventors to develop everything from Google to Allegra. For example, a Vanderbilt researcher developed a revolutionary reading-intervention technology, which Scholastic and Houghton Mifflin Harcourt licensed and developed to help thousands of kids learn to read. Meanwhile, the University of Tennessee Research Foundation has played an important role in defeating COVID-19, with UT research contributing to a novel system that lets scientists study viruses without exposing themselves to danger.

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Prostate cancer drug Xtandi

Stacey Campfield
Stacey Campfield

Now consider that prostate cancer drug Xtandi. Its early development took place at UCLA thanks to about $500,000 in government funding. With an exclusive license from the university, Astellas Pharma invested an additional $1.4 billion to develop the drug, bring it through clinical trials and secure regulatory approval. Today, it's broadly available to U.S. patients.

But the lawmakers and activists pressing for intervention don't like Astellas charging for Xtandi to pay off its investment, so they're asking the federal government to use its supposed "march-in" authorities to strip the company of its license.

While Bayh-Dole does allow "march-in" under limited circumstances, activist discontent with a business getting a return on its investment is not one of them. The law's purpose is to foster innovation, not create a way for bureaucrats to punish innovators and developers when they bring a product successfully to market.

In this particular case, the goofiness of the demand is flabbergasting to behold. Astellas has invested in Xtandi about 2,800 times the amount the government put in. Only a liberal activist could think fronting 0.04% of the cost of something should entitle you to 100% ownership and control.

And without that private investment, there would be no new medication at all.

In the absence of a secure license, there's nothing but a patent application stamped "approved" along with 26,000 others crammed into filing cabinets in Washington, taking us back to the 1970s.

There is no surer way for the government to undermine innovation than by destroying the property rights underlying it. No investor would ever again take risks on promising federally-funded research if their chance at earning a return could be subject to a bureaucratic snatch-and-grab at any time.

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This isn't the first time activists have tried to impose price controls by putting the squeeze on patent rights. Both Republican and Democratic administrations have rejected every such march-in petition they've received, and nothing in the law has changed since the last petition was rejected in 2017.

No one should want a return to the anti-innovation economy of the 1970s. Even Jimmy Carter had the sense to sign the Bayh-Dole Act into law. Here's hoping the Biden administration has enough sense not to undercut it.

Stacey Campfield is a Knox County resident who served in the Tennessee Senate from 2010-2014 and in the Tennessee House of Representatives from 2005-2010. He is the host of "The Reality Camp" and co-host of "Let's Talk America with Dr. Alan Keys" on Brighteon TV. He also is a medical investor in patents not directly affected by this legislation or mentioned in this op-ed.

This article originally appeared on Nashville Tennessean: Stolen innovation cuts out taxpayers