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State AGs Threaten to Steal Remdesivir

Updated: Aug 6, 2020

Start with the fact that remdesivir, the investigational antiviral treatment for COVID-19, has only been authorized for emergency use for the small subset of COVID patients hospitalized for a severe case of the virus who require supplemental oxygen. The new medicine is administered intravenously in hospital.

There’s no evidence that these patients can’t get remdesivir today in American hospitals. And Gilead Sciences continues to expand its manufacturing capacity. “This will enable Gilead to manufacture two million courses of therapy this year, and we expect to meet and exceed actual projected patient demand for remdesivir globally in October,” the company says.

Importantly, Gilead invented remdesivir and its chemical compound on its own over a decade ago. Company scientists are the named inventors, the firm owns the patents, and private investment, not federal monies, underwrote the drug’s discovery. So, it’s not subject to the Bayh-Dole Act.

All this exposes the absurd demand by 30-odd state and territorial attorneys general that the federal government misuse march-in rights under the Bayh-Dole Act. It’s nothing more than a naked power play. These lawless demands must be rejected if remarkable COVID and other medical innovation is to continue apace.

Gilead is making rapid progress toward an approved COVID therapy thanks to its years of research and development in the coronaviral space. Remdesivir stems from the company’s drug development platform used for SARS and Ebola. The earlier viral work — and significant private investment, including plowing back revenue from the company’s current drug products into R&D — enables remdesivir’s head start and quick pace on fighting COVID.

The state AGs falsely assert that federal agencies have funded remdesivir’s development. This is one of their pretexts for expropriation of Gilead’s patents. In fact, federal support is in the $30-70 million range, while Gilead put $50 million into remdesivir R&D in the first quarter 2020 alone. The firm expects to invest another $1 billion on remdesivir by the end of the year.

The Bayh-Dole Act employs patents and secure, private IP rights in the hands of research institutions as the means for driving commercialization of federally supported research discoveries. Bayh-Dole has amassed a 40-year record of success. Before Bayh-Dole, less than 5 percent of federally owned inventions were commercialized because of nonexclusive, insecure IP rights.

The law’s march-in provisions allow only very narrow grounds for usage. An invention’s price isn’t one of them. To suggest abusing march-in over drug price, as the AGs do, is entirely illegitimate, not to mention counterproductive.

Nor is march-in a quick fix. Were the government to move on it, the patent owner has the right to challenge the march-in order and fight it in court. The legal issues would drag on years after a pandemic that prompted march-in has subsided.

The AGs’ publicity stunt, abuse of power or whatever else their demands represent demonstrate a dangerous willingness to twist the law and use government force to deprive private property owners their property rights. If this involved government theft of another form of property, instead of a highly promising medicine treating a pandemic virus and that drug’s patents, the opportunistic politicians probably wouldn’t have made a peep. Their doing so here should worry every American citizen and every innovative company.

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