On this Wednesday and Thursday, two powerful Senate committees will hold confirmation hearings for Robert F. Kennedy Jr., President Trump’s nominee to lead the Department of Health and Human Services.
RFK Jr. is no stranger to controversy. But his most radical policy position may be one that relatively few people are talking about.
Politico recently reported that RFK Jr. has “expressed openness” to seizing drug companies’ patents and relicensing them to generic manufacturers—a move that would effectively implement roundabout price controls on some of the nation’s most commonly prescribed drugs.
RFK Jr.’s team disputed that report, claiming the allegations are simply “an attempt to denigrate” him. Ordinary Americans should hope that’s the case.
But the senators on the Finance and Health, Education, Labor, and Pensions (HELP) Committees can do more than hope. They should question Kennedy directly about his views on forcibly relicensing patents—and upending America’s entire high-tech economy in the process.
The idea of seizing drug patents to control prices has long been a goal of progressives, including former President Biden. The strategy hinges on a deliberate misinterpretation of the Bayh-Dole Act, the bipartisan law that created a pathway for turning federally funded research discoveries into commercial products.
The Bayh-Dole Act empowered federally funded universities and non-profits to retain the patents on their research discoveries—and license those patents to private companies interested in turning promising ideas into real-world drugs, medical devices, and other high-tech products.
Prior to the Bayh-Dole Act, the government retained the rights to any patents arising out of federally funded research. And the government rarely licensed those patents to private-sector companies. So taxpayer-funded research effectively went to waste. Scientists made great discoveries—but consumers never saw the benefits in the form of new products.
In the nearly 45 years since its passage, the Bayh-Dole Act has made the United States the world’s leading developer of new cures and treatments. The law has spurred the creation of more than 200 new drugs and vaccines, as well as the formation of some 17,000 start-ups.
The Bayh-Dole Act outlines very limited circumstances in which the government can “march in” on a patent to forcibly relicense it. For instance, if a company has licensed a patent on an urgently needed experimental vaccine that benefited from federal funding, but proves unable or unwilling to make that vaccine commercially available, the government has the authority to seize the patent and relicense it to another company.
But the government’s march-in authority is so potentially counterproductive—and so tightly constrained—that past administrations have uniformly rejected calls to employ it. Under the first Trump administration, the National Institute of Standards and Technology made clear that “[t]he use of march-in is typically regarded as a last resort, and has never been exercised since the passage of the Bayh-Dole Act in 1980.”
Far-left activists are trying to change that. They’ve claimed for years that the government can and should liberally invoke march-in rights to relicense patents on any products deemed unreasonably priced.
This is a gross misreading of the Bayh-Dole Act. The law’s authors, Sens. Birch Bayh (D-IN) and Bob Dole (R-KS), stated explicitly that the “ability of the government to revoke a license granted under the act is not contingent on the pricing of a resulting product.”
If RFK Jr. were to endorse this radical interpretation as HHS Secretary, the consequences for our most innovative and productive industries would be catastrophic.
For starters, misusing march-in rights would have all the disastrous drawbacks of traditional price controls. And it would introduce extreme financial uncertainty into the business of licensing, developing, manufacturing, and distributing life-saving medicines, discouraging investment in medical science for years to come.
Few biotech companies would be interested in licensing a federally funded university’s promising research ideas if government bureaucrats could arbitrarily tear up that licensing agreement on a whim—after the companies invested years and billions of dollars into further researching and developing the drugs.
The harmful consequences would extend far beyond the health care sector. Arbitrarily ripping up exclusive patent licensing agreements would open the door for wholesale government confiscation of promising technologies. It would give companies in all high-tech sectors less reason to invest their time and resources into developing new technologies that arise out of taxpayer-funded research.
Instead of ensuring that Americans get lifechanging new products, misusing march-in rights would ensure that taxpayer-funded research discoveries never make it out of the lab.
Does the potential next leader of the government’s most expensive department understand this basic reality? It’s up to senators to find out.
Read the full article here