Apparently not content with destroying the pharmaceutical industry slowly by phasing in price controls, the Biden administration plans to speed up the process. The administration proposed last week a policy framework that allows government agencies to “march in” if prices are too high, requiring a drug’s patent holder to license its invention to other companies. While the administration claims that seizing patents will promote competition and lower drug prices, it will do neither. It will stifle pharmaceutical innovation and harm Americans’ health.
March-in rights were created in a 1980 law sponsored by Sens. Birch Bayh and Bob Dole, which allowed universities, nonprofits, and small businesses to retain ownership of patents for inventions discovered with the aid of federal funding. This ensured those inventions could be developed and made available to the public.
Before the Bayh-Dole Act, the government owned federally funded inventions and granted only nonexclusive licenses to developers. Few companies were willing to invest the money and time to transform a scientific discovery into a practical product unless they could own the discovery and exclude others from using it.
