top of page

Senate HELP Chairman Bernie Sanders has kept busy strongarming biopharma company executives. Sanders threatened to subpoena those who wouldn’t willingly submit to a public flogging in his star chamber.

The Committee on Health, Education, Labor, & Pensions has called a hearing for February 8, titled “Authorization for Investigation into the High Costs of Prescription Drugs and Related Subpoenas.” There politicians will grandstand on the price difference of medicines in foreign government-run health systems and the United States.

Three biopharma CEOs have agreed to appear at the bullying fest—the third such gang flogging in Sanders’s committee, beating the same worn-out drum and demonizing representatives from one of the world’s and America's most innovative, valuable industrial sectors.

It’s suspected that Sanders called this meeting to punish America’s pharma innovators, whose private investment into drug discovery and development leads the world. They have the audacity to sue the Biden administration over its opaque manner of implementing the “Inflation Reduction Act’s” drug price “negotiation” measures and the unfair, heavy-handed design of the scheme. There’s no actual negotiation to it, and the IRA’s price control scheme may very well violate the companies’ constitutional rights.

At the hearing, Sanders and his colleagues will badger the executives, as they have before, goad them, twist anything they say that doesn’t fit the Left’s narrative.

Meanwhile, Sanders and a disturbing number of Senators will miss an opportunity for honest, factual inquiry and assessment of the lack of transparency government-controlled health systems operate under.

Shouldn’t U.S. lawmakers in what once was known as the world’s most august legislative body instead defend American innovators against socialist elements of foreign health systems that cheat U.S. interests?

U.S. Senators could investigate how and why other countries’ government-run health systems don’t pay their fair share of the costs that these private firms—many American—bear to bring forth new cures and therapies. Those labors typically take a few billion dollars to discover and develop a single new drug approved to market. About nine out of 10 prospective new medicines don’t cross the finish line.

Instead, expect to see Sanders and his cronies drill the biopharma execs so as to tee up importing foreign price controls into the U.S. health system as their preferred “solution.” Sanders and company have this exactly backwards. Forcing foreign health systems to pay their fair share for drugs is a better solution.

But HELP’s flogging appears geared to push an “international price index” or “most favored nation” scheme—where the government sets U.S. prices of drugs based on some average of certain foreign countries’ prices.

That’s guaranteed to stifle American innovation in this space and destroy good-paying American jobs. It also gives China, which has named biopharma as one of the technologies of which it wants to be global leader, a decided advantage.

Sen. Sanders doesn’t understand, or else ignores, that he’s hounding the wrong side. He should be going after “foreign freeloaders,” not American innovators.

President Trump took the same missteps, and conservatives let him know it. Trump griped about “foreign freeloaders,” but proposed importing foreign-government price controls as reckless and radical as Sanders’s. They got the diagnosis right, but their remedy would kill the patient—American health care’s effectiveness and American health care consumers.

Price controls on medicines, from the Left or the populist side, will most certainly hurt patients and undermine innovation.

One more thing Sen. Sanders and others planning to gang up on the biopharma executives might consider: In witch-hunt hearings in our Congress’s history, the conveners usually come out in history’s analysis as thugs, bullies, etc. Those they skewer come off as sympathetic victims, once the fiery political moment has passed.

The Biden administration has declined to hand Apple a “get out of jail free” card. That’s good for U.S. innovation leadership.

Patent-infringing models of the Apple Watch remain subject to an import exclusion order accompanying the U.S. International Trade Commission’s October determination that these devices violate U.S. innovator Masimo’s pulse oximeter patents.

The U.S. Trade Representative had 60 days to review the USITC ruling and potentially could have reversed it. Thankfully for the rule of law, property rights and U.S. competitiveness, USTR didn’t pull the rug from under Masimo, which invented the blood-oxygen sensor technology copied in Apple Watch Series 9 and Apple Watch Ultra 2 devices.

The Christmas Day deadline for USTR’s review ended with a holiday blessing for Masimo and a deserved lump of coal for Apple.

Upholding this exclusion order wasn’t a certainty. The Obama-Biden administration intervened for Apple in its USITC loss to Samsung concerning iPad and iPhone models. And President Biden has weaponized antitrust and other regulatory takings to the extreme, including as a means of undermining exclusive intellectual property rights.

Apple now continues its predatory infringement strategy. Apple—hardly alone as a practitioner of predatory infringement—would rather deliver the “kiss of death” to innovative firms.

The company is appealing the USITC case to the Federal Circuit Court of Appeals—the next step in ongoing, multipronged patent litigation. Thus, an American innovator’s IP remains uncertain and of tenuous reliability.

And as Locke’s Notebook has explained, the USITC remains under assault by deep-pocketed implementers of others’ inventions. This anti-IP warfare diminishes American innovation leadership.

Of course, Apple could simply license Masimo’s patent-protected innovation and pay royalties for its authorized use. It could have legitimized its watches and realized more Christmas sales.

In light of its Apple Watch patent infringement loss, perhaps it’s time that Apple start behaving like a good corporate citizen. Instead of stealing innovators’ IP via predatory infringement—especially that of American innovators—it’s time for recidivist predatory infringers to begin respecting property rights and the institutions for defending those rights. The time has come to license first and use others’ IP only with authorization.

As it stands, these predatory patent infringers are little more than “commercial implementers who’d love to get . . . state-of-the-art, standard-setting patents [and other patented inventions] at bargain-basement rates.” Their misbehavior aids China and harms the United States. It’s past time to choose loyalties.  And there’s only one right answer.

The Biden administration is out to break the law. “The Interagency Working Group for Bayh-Dole will develop a framework for implementation of the march-in provision that clearly articulates guiding criteria and processes for making determinations where different factors, including price, may be a consideration in agencies’ assessments.”

The wildly successful, innovation-fostering Bayh-Dole Act contains no reference to the price of eventual products in connection with the law’s march-in provision—or in reference to anything else, for that matter.

March-in focuses on ensuring an invention’s commercialization, adequate supply in public health crises and domestic manufacturing of these new products when possible. The law’s authors, Senators Birch Bayh (D-Ind.) and Bob Dole (R-Kan.), chose to omit eventual products’ price from this very narrow set of extraordinary circumstances for which march-in is lawfully permissible.

But the Biden Departments of Commerce and of Health and Human Services are colluding. They’re intent upon shoehorning eventual product price as rationalization for the government to “march in” on patents that underlie certain products. That will violate this statute’s plain language.

This isn’t the Biden administration’s first attempt to violate the Bayh-Dole law by injecting product price into march-in. Political appointees in this administration’s National Institute of Standards and Technology pursued the same thing when they twisted the previous administration’s Return on Investment initiative into an excuse for government to march in on patents on the grounds of product price.

American voters disagree—strongly—with politicians messing up the landmark Bayh-Dole Act. A survey by Morning Consult found:

  • 77% of voters fear the use of the Bayh-Dole Act as a price control could lower their access to innovative treatments for diseases like cancer, Alzheimer’s and rare diseases;

  • 85% view it as important that policymakers protect Bayh-Dole—54% considering it “very important;”

  • 91% of Democrats say it’s important to protect this law;

  • Voters are twice as likely to support a candidate who’ll protect Bayh-Dole, over a candidate who’d significantly change it;

  • Voters widely agree that government-private sector collaboration in bringing cutting-edge medicines to market and when those inventions are protected from government theft foster American scientific leadership.

The Bayh-Dole Coalition, of which Conservatives for Property Rights is a member organization, tweeted (or, as Twitter is now named X, etched, maybe) some of the harmful consequences that misuse of march-in will cause: “If the @CommerceGov @HHSGov Bayh-Dole working group suggests that price can be a factor in march-in decisions, investments in next-gen R&D across all economic industries will plummet and we'll see fewer treatments/cures. Get the facts on march-in here:“

Bayh-Dole has yielded four decades of practical benefit from otherwise wasted government grants. As the B-D Coalition tweeted, “Since 1980, #BayhDole has created...

$1,300,000,000+ in economic growth

4,200,000+ jobs

11,000+ startup companies.”

Before 1980, the zillions of taxpayer dollars poured into research grants merely advanced theoretical knowledge. Less than 5% of the inventions that came out of that spending was commercialized.

If HHS and Commerce violate Bayh-Dole, turning it into a government price control, they will return America to wasting taxpayer money on new knowledge that nobody gets anything useful out of. Expropriation of patents is the key to failure and loss of our innovative edge.

Bless his heart, President Biden needs to get himself and his people on the right side of the Bayh-Dole Act and innovation-fostering patent rights and patent policy.

Locke's Notebook

Vintage Maps 3
bottom of page