Technological Progress or Retreat: A New Year’s Resolution

“One sub-part of God’s grace is found in the jawdropping advances science has made the past few years in immunotherapy and more,” writes former U.S. Sen. Ben Sasse in his announcement that he has advanced-stage pancreatic cancer.

These words of appreciation for modern medicine’s many achievements and growing prospects come in an essay that reflects on a remarkable individual’s acknowledgement that every human being faces “a death sentence.” Sobering thoughts in the days between Christmas and New Year’s Day. And seemingly at odds with the promise of health improvements, overcoming diseases and creating cures.

Still, such technological and scientific successes are happening, not only in medical science, but in many areas, including semiconductor chips, energy (including nuclear) and advanced manufacturing.

For me, Mr. Sasse’s essay brought to mind several thoughts. First was a recent reminder of the state of the art in medical technology. This fall, I judged the semifinal round of healthcare contestants for the Cade Prize for Inventivity, sponsored by the Cade Museum for Creativity and Invention.

A contestant in this category was a startup that’s commercializing a discovery of follow-on use of an existing drug, mRNA COVID-19 vaccine. It causes a patient’s immune system to fight various types of cancer. The startup applies research from the University of Florida, where Mr. Sasse served as president, and the University of Texas MD Anderson Cancer Center. The remarkable evidence was reported soon after the Cade contest.

The other Cade Prize semifinalists in this category were also remarkable. There were a novel regenerative therapy for glaucoma (the category winner) and a CRISPR application editing genes in transplant organs to remove viral infections and decrease organ rejections. These three discoveries and inventions represent just a few of the scientific leaps forward occurring across the country and beyond. The rate of progress is indeed “jawdropping.”

Second, Tomas Philipson’s December 1 Wall Street Journal op-ed "Biden’s IRA Is Harming Cancer Patients” highlights one of the most detrimental of the multiple harms the Biden-Sanders-Manchin “Inflation Reduction Act” has inflicted on our nation.

Mr. Philipson’s research findings show how the IRA’s government price controls, regulatory hurdles and other measures reduce follow-on discoveries and inventions that benefit cancer patients. To wit, the IRA’s drug-price-fixing disincentivizes biopharma research and development and innovation, as well as investment in related R&D and commercialization.

The IRA ties an anchor, which becomes progressively heavier year by year, to the heretofore “jawdropping” pace of medical progress and its wondrous health benefits Americans have enjoyed until now and would derive from foregone innovation. He notes how the IRA’s government interventions—in the name of lowering drug prices—lead to more human suffering and greater healthcare costs in the long term.

The Cade contestant’s follow-on use of COVID vaccine, an existing drug, is exactly the type of important medical progress the IRA places at risk and Mr. Philipson discusses. Misguided socialist and populist policymakers miss the forest for the trees by resisting repeal of the harmful IRA.

Also, some Trump administration policies and proposals fall into the same misguided rut as the IRA. “Most favored nation” reference pricing, patent valuation taxes, mandatory “affordability” clauses in federal technology licensing contracts, government expropriation of a share of research institutions’ patent licensing royalties, for instance. We all suffer from bad law and ideologues’ bad judgment.

The Small Business Administration’s chief counsel for advocacy responded to the Philipson op-ed in a letter to the editor. Casey Mulligan writes that “government-imposed price ceilings curtail investment in maintaining and improving the quality of consumer products.” This results in “fewer new drugs to improve health and longevity, and fewer discoveries of how to use existing medicines better.”

Mr. Mulligan adds that small businesses, including the nearly 3,000 small U.S. biotech firms, “are the least able to survive a policy that shortens effective patent lives and caps prices as their discoveries approach the market.” From his pen to the White House’s eyes.

My book To Invent Is Divine explains that secure ownership must be connected to creativity in order to foster human flourishing. Attenuated property rights, which U.S. intellectual property law is supposed to secure exclusively, do exactly what Mr. Philipson finds the IRA does to cancer drug development.

Reversing course on these wrong-headed policy fronts would be a highly constructive new year’s resolution—and to keep to it through the year and beyond.

America’s 250th an Opportunity to Revive the Founders’ IP Vision

As the nation is about to celebrate America’s 250th anniversary, we should recognize and appreciate the U.S. intellectual property framework, particularly patents and copyrights. For it has played crucial roles in our country’s prosperity, economic and national security, and the prolific degree to which creativity and ingenuity here produce the innovative fruits that Americans enjoy every day.

The recent publication of my book To Invent Is Divine: Creativity and Ownership has acutely raised my anticipation of America’s 250th. A section of To Invent Is Divine focuses on the novel provision in our Constitution in which the Founding Fathers provided for exclusive legal rights in one’s IP.

The Historic Innovation that Blessed America

George Mason law professor Adam Mossoff calls Article I, Section 8, Clause 8, the IP clause, “unprecedented. No country’s founding document had [contained an individual property right] before.” The newly formed Constitution treated intellectual property the same as other forms of property, which the Bill of Rights later secured.

Though not a controversial matter, putting IP rights in foundational law was intended as the “same fundamental break from the English patent system as other U.S. political and legal institutions.” Patents and copyrights would no longer rest on cronyism with the sovereign; common folks could now obtain protection of what they made, the originality and ingenuity of the creative works—the merit of a composition or an invention—is what matters. The U.S. government doesn’t grant rights, it merely secures those already held, ascertaining the boundaries of newly created property.

This displaces trade secrecy and low innovation from primacy, with immediate dissemination of learnings, exclusive, enforceable rights throughout the IP term, and the creative work’s eventual entry into the public domain, allowing anyone freely to make and sell copies.

Further, securing inherent property rights in one’s creative and inventive works was intended to incentivize widespread creativity and ownership of new inventions, new discoveries and new knowledge. The First Congress in the Patent Act of 1790 sought to replace the shortages, modest domestic ingenuity and challenges of Revolutionary War times with an explosion of the body of knowledge, individual pursuits applying new knowledge to creating new and useful things, and resulting in rapid growth of America’s industry and economy. This democratized meritocracy’s fruits would include wealth creation and technological advancement beyond anything the world had seen.

The Divine Basis for Human Flourishing

Our Founders were biblically literate and lived in a Christian society. The Bible was prominent in their world. They were well versed in its teachings. They knew Genesis 1:1: “In the beginning, God created the heavens and the earth.” They knew the Ten Commandments include prohibition of stealing. They knew that God made humans as His image bearers. They knew Micah 4:4’s metaphor of the vine and the fig tree, where the owner has the right to the fruits of his labor.

As creatures bearing God’s image, finite humans possess the divine attributes of creativity and ownership. It’s no surprise that, as with the infinite Creator, creativity and ownership go together. In fact, the combination of creativity and ownership are God’s provision for humanity’s flourishing.

Humans, Christian or not, continue the working and keeping of God’s creation that Adam did. We apply our faculties and abilities to bringing order to creation, to discovering its secrets, to solving problems and to improving the human condition.

The Founding generation understood all this. Though finite and fallen, we get to participate in God’s mission of caring for our fellow human beings. Our exercising our creativity and our inherently owning what we invent or create actually results in widespread human flourishing. This is the model the Founders adopted.

Forgetting the Keys to Flourishing

By the end of the 20th century, we began to take for granted the careful balance of creativity and ownership together, in the U.S. IP system, as the key to America’s prosperity—the means by which we surpassed the world in standard of living, per capita income, global innovation leadership and dynamic competition.

Moreover, we’ve allowed what Southern Cal law professor Jonathan Barnett notes in his book The Big Steal are midsupply-stream technology aggregators and implementers to hijack the U.S. policy and litigation agenda. These enemies of IP rights are weakening IP protection and commoditizing cutting-edge technologies’ value. In other words, antipatent players from Silicon Valley and beyond have been steadily dismantling the Founders’ biblical, win-win innovation machine.

For example, U.S. innovators in standards-based fields such as 5G and 6G wireless technologies lead the world in standard-essential patents, licensing and royalties. But opponents aim to tackle these innovation pacesetters. SEP royalty setting is already headed down the commoditization path in the EU and the UK. They’re pursuing a government takeover of market-based negotiations between innovators and implementers. The latter favor U.S. adoption of the government-run model.

Meanwhile, socialists and populists advocate for and ramp up regulatory, tax and other interventions that—in the name of “affordability”—ignore the tremendous public benefits of the creativity-ownership IP model. Among the most egregious ideas is a tax on patents’ value. The wise counsel of leading conservatives is disregarded.

The Bayh-Dole Act of 1980 applies the principles for flourishing by democratizing technology management out of Washington bureaucrats’ hands and providing secure patent rights as the means for deriving practical use of federally funded research discoveries. Before Bayh-Dole, such inventions wasted away on bureaucracies’ shelves by the tens of thousands. But, populist and socialist officials aim to deform the successful 45-year Bayh-Dole framework, pursuing misuse of “march-in,” “affordability” requirements in research funding and IP licensing contracts, and raiding universities' patent royalties.

Today, U.S. biopharmaceutical firms set the innovation pace for the world in drug development, including against diseases that not long ago were a death sentence for patients. This, too, is under threat from the Left and the Right. Price controls like “most favored nation” (importing the most socialist foreign drug price controls), antitrust weaponization and regulatory hurdles at the Food and Drug Administration will slow medical innovation and harm a major economic sector.

The Democrat-only “Inflation Reduction Act” set up price controls and regulatory hurdles, including government’s direct drug price setting authority, that reduce follow-on discoveries and inventions that benefit cancer patients. The IRA discourages biopharma innovation, which causes patients to suffer more and increases long-term health care costs. Studies find that the IRA’s antipatent and price control provisions have already chilled more than 50 follow-on drug research projects and killed 26 prospective cancer drugs from being developed—far more than the one new medicine the Congressional Budget Office underestimated the IRA would kill in 10 years.

A Time for Renewal

The occasion of America’s 250th birthday provides the opportunity to consider our heritage—particularly what the Founders bestowed on posterity through a patent and copyright framework that applies the God-given model of creativity plus ownership producing flourishing, prosperity, and improvement of the human condition.

If we act wisely, as To Invent Is Divine discusses, we’ll embrace our divine image-bearing and restore the creativity-ownership-centered American IP system. The stakes are the difference between surviving and thriving—as individuals, as a nation and as a flourishing people.

Senate Finance Must Reject Socialist “Solutions”

The U.S. Senate Finance Committee has scheduled a hearing ahead of Republican leadership’s fulfilling a deal with Democrats—a vote on Democrats’ Obamacare premium subsidies in exchange for a handful of votes by senators from the minority side to proceed with legislation to fund the government and finally end the Democrats’ heartless federal shutdown of nearly a month and a half.

The November 19 hearing, titled “The Rising Cost of Health Care: Considering Meaningful Solutions for all Americans,” holds the potential for health reforms that benefit patients, taxpayers, employers, health care providers and others in the U.S. health care ecosystem.

There are some grownups on both sides of the aisle in this committee. But the rosters include senators of each party who don’t value the art of legislating, but make up for that with blind ideology, either of the socialist Left or the populist Right.

The Democrats will likely march lockstep behind rescuing the expiring government handouts. Their “plan” is to continue Obamacare premium subsidies for people well into the upper middle class and others who shouldn’t qualify. Or worse.

Most Republicans will probably lean toward free-market-based solutions. That would be great, if they inject more consumer choice and competition into a highly regulated sector of the economy.

A good start would be to expand use of and access to health savings accounts. HSAs empower consumers to behave like consumers—comparing the value, cost and quality of medical goods and services, just as they do when buying other types of goods and services. The HSA provisions of the One Big, Beautiful Bill Act are a good first step. But properly amended, HSAs have the potential to enable consumers to move the needle significantly toward constrained costs, better quality care and greater value for the health care dollar.

Another free-market solution would empower patients and medical professionals with greater market power. Rent-seeking middlemen, such as pharmacy benefit managers and insurers, should undergo reforms that benefit the rightful decisionmakers (i.e., docs and patients). PBMs should no longer be able to game formularies to collect higher fees or keep manufacturer discounts that ought to help reduce patients’ out-of-pocket costs. And insurers’ barriers to patient-doctor decisions, such as prior authorizations, should be addressed.

Biden-era socialist price controls are contained in the Inflation Reduction Act. Those radical policies, which include the extortionary 95% excise tax on drugs and the “pill penalty,” continue to raise Medicare premiums, reduce coverage options and advantage China’s growing competitiveness in such areas as biotech and pharmaceutical innovation. One necessary, market-based solution is the Ensuring Pathways to Innovative Cures (EPIC) Act.

Other low-hanging health policy fruit that would clean up waste, fraud and abuse, reverse the Obama-era Affordable Care Act’s irresponsible expansion of 340B-eligible facilities, improve charity care for the truly needy indigent and help rural hospitals is 340B reform. The Congressional Budget Office finds that spending in this program grew from 2010-2021 about sevenfold. The 340B ACCESS Act would be a great place to start in fixing this problem.

Finally, in the “first, do no harm” category, the committee must soundly reject any type  of government price controls, including importation of “most favored nation” foreign drug price controls. Adopting any form of price controls—particularly on biopharmaceuticals, one of America’s critical and emerging technologies—would cement in the law of the United States social democracy’s means of undermining economic liberty. This would be unconscionable and disastrous.

Remember what conservative intellectual Michael Novak said: “Social democracy is based on the same errors as socialism, but in a form that takes a little longer to effect self-destruction.”