Biden Participates in ‘The Price is Right’ | News
TL/DR –
President Joe Biden plans to use the Bayh-Dole Act to lower drug prices by potentially granting licenses to third parties if a federally funded invention is not commercially available to the public or in a national health emergency. This will mark the first time a presidential administration will use price to determine whether a drug is accessible to the public. Critics argue that this approach was not the intention of the act, and moreover, it could create problems for smaller companies and startups relying on venture capitalist funding, who could be discouraged by the threat of government intervention over pricing.
President Biden’s Actions on Drug Pricing and Their Potential Impact
President Joe Biden recently signed the Inflation Reduction Act which allows the government to set the price of drugs for Medicare. Now, under the Bayh-Dole Act of 1980, the Biden administration plans to adjust drug patent licenses to lower drug prices. The act originally let federal research funding recipients retain patents, stimulating over 13,000 startups and adding over $1.7 trillion to U.S. GDP from 1997 to 2017, according to the Center for Strategic and International Studies.
The Biden administration intends to use the Bayh-Dole Act’s provision to grant licenses to third parties if federally funded inventions aren’t commercially available or in a national health emergency. This would mark the first time a presidential administration uses price to determine if a drug is accessible, as expressed by Neera Tanden, the White House domestic policy adviser. This move is seen as a challenge to “Big Pharma” since 25 of the largest pharmaceutical companies in America control 70% of the market.
Interestingly, this move targets older voters who make up a larger part of the electorate and have typically favored Republican candidates. With the growing number of older voters, it is crucial for Biden to win as many of these votes, especially in swing states with large senior populations like Pennsylvania and Arizona.
The Bayh-Dole Act, however, does not relate solely to healthcare and prescription drugs, but all agencies within the U.S. government. This opens up the possibility for any administration to take patent licenses from one company and give them to a third party in any sector receiving federal funding. This could deter investors from backing research if they fear the government might seize a patent license due to high drug prices.
Furthermore, many large pharmaceutical companies such as Merck and Pfizer do not have drugs developed through federal funding, but instead invest billions in their own research and development. According to a report from Vital Transformation, 70% of technologies developed under the Bayh-Dole Act come from small businesses and startups. Thus, Biden’s move could potentially benefit “Big Pharma” while smaller companies bear the brunt of the law.
Despite this, Biden is likely to proceed with his plan to exploit drug pricing for electoral advantage. The Washington Examiner suggests the Republicans may struggle to present a comprehensive case against it amidst the current political chaos, leaving Biden’s controversial approach largely unchallenged.
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