Politics. The silly season, known to non-political people as “election year” is upon us at a scale we had not thought possible. For the blissfully uninitiated, during the silly season elected officials say and do things that are generally incomprehensible to us mere mortals.
They do this not because their actions will lead to some meaningful policy – although we do admit that sometimes happens – but to assuage the fan base; to affirm what they believe is true.
Since around 2000 when the federal government began the slow abandonment of policy development in favor of playing Santa Claus the silly season has gotten, well, sillier.
The always uncertain presidency of President George W. Bush gave us the Medicare Part D benefit ahead of the 2004 election. Poor President Barak Obama, so untested in politics, his silly season began shortly after his election with the passage of the Affordable Care Act. That left him with only executive action as his preferred vehicle for handing out the goodies for the rest of his tenure
(Those two things combined have created a transfer of payments from the federal treasury to the health care industry that would make the defense industry blush.)
President Joe Biden, more practiced at the art of politics, this week alone has promised march-in rights on patent protected drugs to lower drug prices and a high-speed rail line between Los Angeles and Las Vegas.
Neither of those things are likely to happen but it makes some people feel good that the incumbent president deserves their vote.
Policy. March-in rights to control drug prices has been a stalking horse for the small cadre of Congress that does not like to read the law. The Bayh-Dole Act was created in 1981 to ensure federally funded research was commercialized as much as possible.
The law has been uniformly interpreted – because it really isn’t ambiguous at all – to apply only to those inventions that were never brought forward into commercial use. Although there have been 40 years of lawyering on the topic, no government lawyer, until now, has concluded the federal government can seize and transfer Intellectual Property from one entity to another because it does not like how the product has been commercialized.
With high prices, for example.
The Bayh-Dole Act only applied march-in rights when an invention had been developed with federal funds from NIH for example. Assuming the Biden administration is successful in implementing their plan, which is very doubtful, the possible responses include rejecting federal research grants.
It could also mean less research which will translate into less discovery. We are seeing now after years of flat to declining real NIH grant funding. Such an outcome, however, would assume only the federal government funds discovery. They are the 800-pound gorilla and a revenue stream on which about 50 universities rely, but they are hardly alone.
After the revelations of the last few years, a diminished federal role might not be such a bad thing.
Power. Reaching into a 40-year old law and reinterpreting it in a manner contrary to virtually every other pair of lawyer eyes that have looked at it says but one thing, “out of options.”
While Congress has opened up many new lines of business in the last quarter of its existence, it was not designed to manage most of them. At the founding of the republic the principal source of revenue was tariffs, and the preoccupations of the country were defense and trade. The legislative process was designed to be slow and deliberative.
Meanwhile the world races ahead.
Have a great rest of your weekend.
Emily Evans
Managing Director – Health Policy
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