Invoking Bayh-Dole may be needed to get affordable Covid-19 treatments

As the Covid-19 pandemic strains the capacity of the U.S. health care system, attention is being focused on developing new drugs and therapies to fight it.

Pharmaceutical company Moderna, for example, began clinical trials in Seattle for a new vaccine, providing welcome news to many. But what few Americans realize is just how much of their taxpayer dollars went into the development of these drugs long before Covid-19 emerged.

The Defense Research Advanced Projects Agency (DARPA), a part of the Department of Defense, has poured tens of millions of dollars into Moderna and other biotechnology companies since 2011. The National Institutes of Health alone has spent almost $700 million to develop a coronavirus vaccine.

Remdesivir, Gilead Sciences’ promising drug candidate for Covid-19, was developed at the University of Alabama at Birmingham. It received nearly $38 million from the NIH — and had received orphan drug status from the FDA before asking to have that status waived due to sharp public criticism. Orphan drug status is normally reserved for drugs developed for rare diseases and provides tax incentives and added market exclusivity that would protect it from generic competition.

Despite all this activity, we have no guarantee that a potential vaccine or treatment will be affordable for the American people who helped fund them.

This is shameful. Taxpayers, and more specifically patients, are about to be taken for a ride.

Covid-19 cases are increasing at an exponential rate. The CDC estimates that between 160 to 214 million Americans could contract the virus. Yet the orphan drug status that was conferred on the basis that Covid-19 affects less than 200,000 persons in the United States would have granted the company a pricing monopoly on a drug millions of Americans might need.

This episode is a reminder that the pharmaceutical industry cannot be relied upon to ensure that its response to this pandemic, and others, will always be in the best interest of the public.

Urgent intervention by the government is needed, and there is clear precedent for it.

During the anthrax scare in 2001, the U.S government successfully pushed Bayer, the manufacturer of the anti-anthrax treatment ciprofloxacin, to drop its drug price. Tommy Thompson, then secretary of the Department of Health and Human Services, threatened to break Bayer’s monopoly in order to manufacture a generic version of the drug by issuing a compulsory license. These steps, merely threatening to act on the U.S government’s right to use any patented invention under the United States Code were bold steps to ensure access to the lifesaving drug.

This makes the U.S. government’s inability to commit to ensuring affordability for Covid-19 therapies even more bizarre, since we already have additional safeguards in place to use publicly funded lifesaving technologies for those who need it most. There is a separate federal statute, the Bayh-Dole Act, that provides a clear path for intervention. In return for clearing the path for the private patenting of taxpayer-funded research, this law has provisions for government to “march-in” on a private patent. If a pharmaceutical company has not made the technology available under “reasonable terms,” the government can provide a license to a third-party manufacturer to introduce competition into the market and can even use the patent itself for free.

Reasonable terms include meeting urgent national health and safety needs.

This, of course, has been hotly contested by industry. Neither the NIH nor any other government agency have threatened to pull the Bayh-Dole trigger in part because of the precedent it would set with industry relations.

Pharmaceutical corporations are so frightened of this that they formed a coalition of industry actors, nonprofit organizations, and even research universities to “celebrate” the 40-year anniversary of the Bayh-Dole Act not being used for price controls. The group, called Bayh-Dole 40, continues to reiterate tired arguments against the use of march-in rights by any government: provide clear assurances on recouping our stated costs for research and development, or else we will take our business elsewhere. Meanwhile 1 in 3 Americans cannot afford to pay for their medication.

But where else would industry take its business? Every success story that Bayh-Dole 40 highlights also highlights just how important and valuable publicly funded research is to the drug development process. It was federally funded research at Georgetown University and the University of Rochester that helped spur the development of the HPV vaccine. It was federally funded research at Emory University that brought forth the development of sofosbuvir, now one of Gilead Sciences’ most expensive drugs for hepatitis C treatment. It was federally funded research at the University of California, Los Angeles, that led to the development of Xtandi, a prostate cancer drug now owned by Pfizer and sold in the U.S. at $129,000 a treatment.

These technologies have netted universities billions. However, universities also generally claim to have a mandate to public service. Many of them even claim that technologies developed within their labs should also be of benefit to the global community. It is an embarrassment in 2020 to see some universities sign on to a coalition like Bayh-Dole 40 that actively aims to undermine a safeguard that exists to serve the public good.

But it is even more shameful to construct safeguards and not use them when they should be used.

Public agencies and research institutions must begin using already constructed safeguards, from compulsory licensing to provisions under Bayh-Dole, to protect the public from industry price gouging. Without action, a costly coronavirus vaccine will be available only to those who can afford it and deny the public a return on its investment of tax dollars. Only by standing up to the false narratives of pharmaceutical corporations and embracing the public-serving role of government can we begin to prepare for the fallout that is the Covid-19 pandemic.

Varoon Mathur is a technology fellow at the AI Now Institute at New York University and a coordinating committee fellow with Universities Allied for Essential Medicines.