Thank this obscure law for a potential coronavirus vaccine
According to the Milken Institute, over 70 treatments for COVID-19 are already in clinical trials or progressing toward clinical trials. Several of the inventions behind this flurry of activity resulted from government funded research in U.S. universities.
This public-private cooperation is our best hope of defeating the virus. It's also the foundation of our entire drug development system. And it wouldn't be possible without an obscure law known as the Bayh-Dole Act.
For 40 years, this bipartisan policy has allowed university and non-profit researchers to retain ownership of patents that result from federally funded research, and then license those patents to private-sector companies that have the resources to turn good ideas into viable products.
The law has delivered an incredible return on taxpayers' investment. American research universities' patent awards have risen steadily over the last four decades, increasing from just 390 in 1980 to nearly 7,500 in 2017. Bayh-Dole has contributed over $1 trillion to America's economic output and has supported 4 million jobs and more than 11,000 startups.
It'd be hugely counterproductive to weaken the law, as some politicians have urged.
Before Bayh-Dole, the government retained ownership of the patents resulting from federally funded research. For instance, if the National Institutes of Health funded research into a protein at a university lab, and then university scientists patented that finding, the government would own the patent. In theory, this ensured that taxpayers would receive any royalties for patents the government subsequently licensed out to companies.
But in practice, the federal government did a terrible job of licensing patents to private firms, who could then turn the findings into commercial products. Prior to Bayh-Dole, just 5 percent of government-owned patents were ever licensed to the private sector.
In short, Bayh-Dole has kept federally-funded research from going to waste.
My time at MIT showed me the caliber of innovation that can occur when inventors can retain ownership of patents. Just look at high-definition television, a relatively recent invention -- and the result of both federal support and private-sector risk-taking.
Controlled-release drug technology was another groundbreaking invention developed during my time at MIT. Controlled-release technology makes possible such life-altering devices as drug-eluting stents that unblock arteries and long-lasting birth-control implants.
Despite the law's myriad successes, some lawmakers have proposed weakening it. They want to allow the government to "march in" and seize patents on technologies or medicines they feel are overpriced. Though their motives -- seeking to make medicines and other products cheaper for consumers -- are understandable, their scheme would backfire horribly.
Drug companies spent a combined $180 billion on research and development in 2018. That sum dwarfs the National Institutes of Health's current annual spending of roughly $42 billion.
Firms would stop spending such sums if the government could arbitrarily seize the final products that result from years or decades of additional R&D. The pace of innovation would slow considerably.
By facilitating closer cooperation between university scientists and the private sector, Bayh-Dole has paved the way for technologies Americans could only dream of a few decades ago. It's our best chance for a coronavirus cure. Tampering with the law makes no sense at all.
John T. Preston is former Director of Technology Licensing at MIT and founder of TEM Capital.