By Adam Mossoff
Over 30 state attorneys general recently sent a letter to federal health officials urging them to confiscate Gilead Sciences' patent on remdesivir, one of the only drugs approved for use on patients suffering severe symptoms caused by COVID-19.
These politicians allege that since Uncle Sam helped pay for some of remdesivir's clinical trials, the federal government can use its "march-in" power in a 1980 law to appropriate Gilead's patent and license it to generic manufacturers to lower the price and increase availability of the drug.
Unfortunately, the state AGs don't understand the law in question -- or the drug development process. If they succeed, this would sanction government theft of patents that will chill innovation and harm patients.
The law they cite, the Bayh-Dole Act, was not enacted for government confiscation of patents. Congress enacted this law to facilitate universities and research institutions to obtain patents and license their innovations in the marketplace. Before 1980, no one knew who owned inventions if federal funding was used in the basic research that led to the patent. As a result, life-saving innovations sat on the shelf in the university lab.
Bayh-Dole changed this. The legislation spurred the licensing of new innovations and massive economic growth. It contributed to the explosion in new drugs over the past forty years that have turned what were once death sentences into manageable conditions -- from cancer to diabetes to hepatitis.
Bayh-Dole does authorize a "march-in" power for the federal government to take patents and license them under limited conditions. Contrary to the state AGs' claim, this is not an authorization for the federal government to confiscate patents merely to lower a price. The National Institutes of Health stated that "march-in is not an appropriate means of controlling prices."
Bipartisan administrations have consistently rejected lobbying efforts to use the "march-in" power for lowering prices of drugs. They did so because Bayh-Dole does not authorize it.
But there's a more basic legal problem with the state AGs' letter: Bayh-Dole doesn't apply to remdesivir. The company acknowledges working with universities and the U.S. military in testing the drug, but it was invented by and patented by Gilead researchers. The chief patent counsel for the U.S. Army Medical Research and Development Command stated that its contributions did "not qualify USAMRIID as a joint inventor of the compound."
Remdesivir is an example of the miracle drugs created by the biopharmaceutical sector. Researchers at Gilead labored for more than a decade and the company will spend more than a billion dollars in R&D expenditures on the drug.
The federal government's total funding of remdesivir's testing, and the funding provided in response to the COVID-19 pandemic, ranged from $30 to $70 million. These federal monies are 3 percent to 7 percent of the total $1 billion in private investments made by Gilead in this medicine. For this, the state AGs would have the federal government confiscate Gilead's entire patent.
This is not what Bayh-Dole was intended to do. The politicians and activists lobbying for the government to invoke its "march-in" power for COVID-19 drugs do a disservice to innovators and American patients. If the government can twist the Bayh-Dole law and arbitrarily decide to confiscate patents, companies will no longer risk billions of dollars and decades of research in creating miracle drugs like remdesivir. We will never see cures for diseases like Alzheimer's and pandemics like COVID-19.
Adam Mossoff is a patent law expert at Antonin Scalia Law School, George Mason University, and a Senior Fellow at the Hudson Institute.
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