Speaker 1: Hello to our listeners, and welcome to the Votes and
Speaker 1: Verdicts podcast, hosted by the policy and litigation team at
Speaker 1: Bloomberg Intelligence, the investment research platform of Bloomberg LP. Our
Speaker 1: podcast series examines the intersection of business policy and law.
Speaker 1: I'm one of your hosts for today, Tishwalker. I'm an
Speaker 1: analyst with Bloomberg Intelligence covering patent pharma litigation, and.
Speaker 2: I'm dwain Right, a senior healthcare policy analyst at Bloomberg Intelligence.
Speaker 1: On today's episode, Duayne and I are revisiting the Biden
Speaker 1: Administration's proposal to update martian rights under the BIDOL Act
Speaker 1: to include a specification that price can be a factor
Speaker 1: in determining that a drug is not accessible to the public.
Speaker 1: You'll recall that Duayene and I discussed this topic on
Speaker 1: our January eighteenth episode with doctor Aaron Kesselheim of Harvard
Speaker 1: Medical School, who is very much in favor of the
Speaker 1: administration's proposal, and as we noted on that episode, we
Speaker 1: see this effort by President Biden as part of a
Speaker 1: broader conversation on drug pricing ahead of the November elections,
Speaker 1: setting up a contrast with the likely challenger Trump, who
Speaker 1: sought to prohibit the exercise of marching rights on the
Speaker 1: basis of price alone. To help us round out our
Speaker 1: discussion on this topic, we've invited Joe Allen, who was
Speaker 1: the lead staffer for Indiana Senator birch By when the
Speaker 1: by Doll Act was enacted back in nineteen eighty. Joe
Speaker 1: is now the executive director of the Bidel Coalition, which
Speaker 1: seeks to preserve the underlying framework of the law. Joe
Speaker 1: will talk with Dwayne and I about his work as
Speaker 1: a staffer developing the legislation and how his efforts now
Speaker 1: and his efforts now leading the coalition. Joe, Welcome to
Speaker 1: the Votes and Verdicts podcast, and thank you so much
Speaker 1: for joining Dwayne and I today.
Speaker 3: Well, thank you very much for inviting me. I'm really
Speaker 3: looking forward to our conversation.
Speaker 2: Well, Joe, can you tell us about your background, starting
Speaker 2: with your work on the US Senate Judiciary Committee for
Speaker 2: Senator By, which ultimately led to passage of the Bidule Act.
Speaker 3: Sure, I was actually a very junior staffer. Actually, Senator
Speaker 3: By inherited me. I actually worked for a Senator named
Speaker 3: John Tunney on Judiciary Committee. You ever saw the movie
Speaker 3: The Candidate with Robert Redford and Dustin Hoffman. It's about
Speaker 3: Senator Tunney, and after he lost, Senator By inherited me.
Speaker 3: I was, like I said, I was a junior member.
Speaker 3: I was basically a research assistant, and they were very
Speaker 3: gracious they took me on. I think probably because I
Speaker 3: was cheap, but anyway, I was doing some work for
Speaker 3: Senator Bye and actually got him into another topic which
Speaker 3: was unrelated to the Senate Judiciary Committee on making alcohol
Speaker 3: fuel out of corn, which was a big deal in
Speaker 3: the seventies because we had a gas embargo and Senator
Speaker 3: By got excited about it. But I was on Judiciary Committee,
Speaker 3: so another staffer took it away from me once the
Speaker 3: Senator got interested. So my general counsel nels Ackerson knew
Speaker 3: I was pretty crushed, and he said one day, Hey,
Speaker 3: we've got Purdue coming by to talk about some patent thing.
Speaker 4: Would you like to sit in And I said sure.
Speaker 3: We had no idea what Purdue was going to talk about,
Speaker 3: but they mentioned that they were having They made it
Speaker 3: a mentioned with Department of Energy funding and under current
Speaker 3: policies in place, then it was going to be taken
Speaker 3: away from them and never utilized. So we thought, well,
Speaker 3: that didn't make any sense, and they actually had with
Speaker 3: them the General Council from that institute National Institutes of Health,
Speaker 3: who said, this is a big problem across the government.
Speaker 3: So long story short, my General counsel asked me to
Speaker 3: look into it.
Speaker 4: I did, and we.
Speaker 3: Also found out that Senator Dole, who was a Senator
Speaker 3: birch By was a liberal Democrat. Senator Bob Dole was
Speaker 3: a conservative Republican. They didn't agree on hardly anything. It
Speaker 3: would be sort of like today if Ted Cruz and
Speaker 3: Elizabeth Warren suddenly joined forces on something. But we found
Speaker 3: out that Dole was interested in the same issue, said well,
Speaker 3: let's work together. It'll be bipartisan. And about a month
Speaker 3: later we were invited to make My general counsel was
Speaker 3: invited to make a talk to the universities and he
Speaker 3: hurt us back, so he asked me if I would go.
Speaker 3: So I'd never spoke, never spoken in public before. I
Speaker 3: was going down to talk to a group of university
Speaker 3: technology transfer people who knew more about this than I did.
Speaker 3: But anyway, it turned out that actually I wound up
Speaker 3: taking over the issue. So it was serendipity, and I
Speaker 3: guess it's best. But I've been actually working on this
Speaker 3: ever since.
Speaker 2: So that's great history. And we'll dig into the mechanics
Speaker 2: of the Bidual Act, specifically the marching provisions in a second,
Speaker 2: but can you fill us in now? Fast forward to
Speaker 2: twenty twenty four. You're the executive director of the Bidal Coalition.
Speaker 2: What's the goal and the function of this group.
Speaker 4: Well, that's also a story of serendipity.
Speaker 3: In nineteen we were coming up on the fortieth anniversary
Speaker 3: of by Dole. Bid Dole was passed in nineteen eighty
Speaker 3: and twenty twenty would be the fortieth anniversary. So somebody
Speaker 3: called me. Hans Souer from Bio called me and said,
Speaker 3: you know, we had to do something to actually recognize
Speaker 3: the fortieth anniversary. And I said, yeah, that I was
Speaker 3: actually doing doing some consulting then, and I said, well,
Speaker 3: that makes sense, because you know, we got to really
Speaker 3: celebrate what Bidole has done. Because the by Dole Act
Speaker 3: didn't create any new bureaucracy, didn't create any new funding.
Speaker 4: So it's kind of invisible.
Speaker 3: It's like the little train that could sort of working
Speaker 3: here in the background, and it doesn't really get much recognition.
Speaker 3: So we said let's put something together. And you know,
Speaker 3: we talked to some other university people, some industry folks,
Speaker 3: and we were just going to do a program at
Speaker 3: the National Press Club. Well, a thing called COVID happened
Speaker 3: after in the end of twenty nineteen, so it turned
Speaker 3: out we couldn't do our press event. We wound up
Speaker 3: doing a webinar and it actually went very well, and
Speaker 3: we started actually doing some events throughout the year because
Speaker 3: by Dole has been under attack and a lot of
Speaker 3: people don't know the history, which we'll talk about today.
Speaker 3: So again another long story short. You know, we actually
Speaker 3: started putting out the real history of by Dole, how
Speaker 3: the law was passed, what it does, et cetera, et cetera,
Speaker 3: trying to counter some of the misrepresentations, and that went
Speaker 3: so well that people said, well, you know, we got
Speaker 3: to keep the same going. So actually last year we
Speaker 3: actually turned it into a five oh one c four.
Speaker 3: Before that was kind of like a club. You know,
Speaker 3: we basically had no real budget. We were just kind
Speaker 3: of going along from from month to month, but the
Speaker 3: issues kept coming up. So actually it is now a
Speaker 3: real organization. We have members across the spectrum industry, members
Speaker 3: university members, venture capitalists associations, and the purpose of the
Speaker 3: of the coalition is is pretty simple. We tried to
Speaker 3: explain the history of by Doll, what it's done, and
Speaker 3: why it's important to make sure it works as intended.
Speaker 1: And so you mentioned that BI Dol is under attack,
Speaker 1: and we'll talk about that a little more in some
Speaker 1: of our later questions. But what's your general experience been
Speaker 1: in how the act has functioned over the last forty
Speaker 1: years since it's been passed.
Speaker 3: Well, you know, by Doll was an experiment because before
Speaker 3: by Doll, going back to World War Two, the government's
Speaker 3: policy was that if the government funded any research, an
Speaker 3: invention was made, the government would take that invention away
Speaker 3: from whoever created it, take it to Washington, and make
Speaker 3: it available basically that anybody wanted it, which was it
Speaker 3: was kind of like a Marshall Plan of technology. And
Speaker 3: that seems really laudable because again, in nineteen forty five,
Speaker 3: the United States is one of the few economies still standing.
Speaker 3: Europe was devastated, Japan and China were devastated, and so
Speaker 3: that seemed like a nice thing to do. But what
Speaker 3: happened was in the seventies, Japan and Germany got back
Speaker 3: on their feet and they started taking taking technologies away
Speaker 3: from US steel, automotives, electronics, c And so the time
Speaker 3: we started by Dole, the American economy was really in
Speaker 3: a tail spin. So that's one of the reasons we started.
Speaker 3: You know, it was an experiment. We said, it doesn't
Speaker 3: make any sense for the government to take things away
Speaker 3: and they're not being commercialized. We need to make sure
Speaker 3: that we reverse at and give people incentives to actually
Speaker 3: step in and turn these into real products, which takes
Speaker 3: a lot of industry investment. But I think the best
Speaker 3: thing I've seen that actually shows how it's worked is
Speaker 3: the Economist Technology Quarterly, which is not even a US publication,
Speaker 3: said the bi Dole Act is probably the most inspired
Speaker 3: piece of legislation over the past half century. More than anything,
Speaker 3: it helped reverse America's precipitous slide into industrial irrelevance. So
Speaker 3: it's the basis for public private sector partnerships, and that's
Speaker 3: a big deal. That's one of the reasons we've actually
Speaker 3: reasserted our technology leadership. Really starting with the passage of
Speaker 3: Bidole in nineteen eighty that we were in danger of losing.
Speaker 3: So I think it's been a tremendous success, but like
Speaker 3: I said, it doesn't have any bureaucracy, it doesn't have
Speaker 3: any cheerleaders, and so a lot of people that don't
Speaker 3: like that policy, they want to go back to the
Speaker 3: pre by Dole policy of the government, you know, basically
Speaker 3: micromanaging things and giving things away serve and we can
Speaker 3: use them. Have created an alternative history, and that's one
Speaker 3: of the reasons that we want to make sure that
Speaker 3: we're going back and really explaining what bi Doll does,
Speaker 3: how fundamental it is to the US economy, and how
Speaker 3: important is to keep that going.
Speaker 1: You know.
Speaker 3: Now, particularly we're being challenged by China, which is actually
Speaker 3: adopted by Doll to compete against.
Speaker 1: Us, and you know, so one of the things that
Speaker 1: by Doll did though, was sort of preserve the ability
Speaker 1: for the government to go in and recapture, let's say,
Speaker 1: recapture an invention. And so maybe we can set the
Speaker 1: stage a little bit for our listeners here. I mean,
Speaker 1: we talked about this on our last podcast, but can
Speaker 1: you remind us sort of what are the laws four
Speaker 1: key pillars that would open the door for the government
Speaker 1: to come back in and exercise what we call march
Speaker 1: in rights under the bi Dola Sure.
Speaker 3: Basically I mentioned before that even before by Dole, the
Speaker 3: government would take inventions away and take them to Washington
Speaker 3: and they would sit there. Well, it soon became a
Speaker 3: parent that that really was not working because the government's
Speaker 3: funding early stage inventions, you know, things like out out
Speaker 3: of basic research or mission research, neither one of which
Speaker 3: is leading to a commercial product. So when the government
Speaker 3: has when a patent comes out of government funding, it's
Speaker 3: more like an idea than a product. And what happened
Speaker 3: was before by Dole, the Cumptroller General found there were
Speaker 3: twenty eight thousand inventions sitting on the shelf in Washington
Speaker 3: basically being unused. So even as far back as the
Speaker 3: as nineteen fifties and the Truman administration, the government recognized, hey,
Speaker 3: you know, there might be cases where we need to
Speaker 3: let the inventing organization own the technology so they can
Speaker 3: commercialize it. And even when they did that, they said,
Speaker 3: but we want to make sure you're really making a
Speaker 3: good faith effort to turn it into a product. So
Speaker 3: if you're not, even if we wave you the rights,
Speaker 3: if you're not turning into a product, the government can
Speaker 3: march in and either take the invention back or license
Speaker 3: it to somebody else. And so President Kennedy expanded on
Speaker 3: that actually made it easier for people to get their
Speaker 3: petitions granted, and President Nixon did the same thing. So
Speaker 3: marching rights precede by Dole. But the purpose has always
Speaker 3: been to make sure that good faith efforts are being
Speaker 3: made to turn a federally funded invention into a useful product.
Speaker 3: So when we passed by Dole, we build on that,
Speaker 3: and in fact, we took some of the same language
Speaker 3: going back to the Kennedy administration and the Nixon administration
Speaker 3: into the by Dole Act. Now, the other thing I
Speaker 3: should mention is By Dole, as I said, changed forty
Speaker 3: years of government.
Speaker 4: Policy so overnight.
Speaker 3: Literally under by Dole, what we said was that a
Speaker 3: university or a small company making an intervention with government
Speaker 3: funding can own it, they can license it for commercialization.
Speaker 3: The university has to give a preference for a small
Speaker 3: company and people that make it. In the United States,
Speaker 3: but before by Dole, most universities had never managed a
Speaker 3: technology before. So we have four march in triggers. As
Speaker 3: you mentioned, the first one only applies to the university,
Speaker 3: to the patent owner, and under Bidole, it's typically a university,
Speaker 3: and it says that you need to make sure that
Speaker 3: the technology has been made into it is being turned
Speaker 3: into a product. In other words, it's practical application. It's
Speaker 3: being made something useful, and we define that is making
Speaker 3: sure it's available to the public on reasonable terms. And
Speaker 3: that's really what the debates centered on. Well, what we
Speaker 3: meant by that, and what's clear by reading the statute
Speaker 3: was we didn't want the university putting crazy terms in
Speaker 3: the license agreement, like for example, you have to hire
Speaker 3: the chancellor's daughter is a CEO, where you have to build.
Speaker 4: Us a new football stadium.
Speaker 3: We also wanted to make sure universities were actually putting
Speaker 3: terms in there where they're monitoring it to make sure
Speaker 3: a company is turning us into a product. Because one
Speaker 3: of the fears before, one of the criticisms of by
Speaker 3: Dole was well, what of the giant company licenses technology
Speaker 3: from some university to suppress it because maybe it competes
Speaker 3: with an existing product. So we want to make sure
Speaker 3: that the universities had milestones in their agreements to make
Speaker 3: sure it's being turned into a product. So that's the
Speaker 3: first first trigger. A practical application again the burdens on
Speaker 3: the university to make sure you're licensing unto reasonable terms
Speaker 3: and also that you're monitoring commercialization. The second one was
Speaker 3: to make sure that the product can meet public health
Speaker 3: and safety needs. In other words, you're producing.
Speaker 4: Enough of it.
Speaker 3: If you have a COVID pandemic or something like that,
Speaker 3: you know, make sure that there's enough quantity going out.
Speaker 3: The same thing for meeting the needs of government regulations.
Speaker 3: And as I mentioned before, Bia DOLE gives a preference
Speaker 3: in licensing to people that will make the product in
Speaker 3: the United States. So if somebody reneges on their agreement
Speaker 3: and you're making the product in Bolivia as opposed to
Speaker 3: New York, and the government finds out, it can march
Speaker 3: in and it can force the university to either license
Speaker 3: other people or the government can do it itself. And
Speaker 3: the other thing I should say is when my Dole
Speaker 3: uses the phrase reasonable terms issues twice in the statute,
Speaker 3: both referring to the terms of a license. So if
Speaker 3: the university refuses, if the government marches in and says
Speaker 3: you have to license another person, the losses has to
Speaker 3: be done on reasonable terms.
Speaker 4: In other words, you.
Speaker 3: Can't have your nose out a joint and make it
Speaker 3: impossible for the next person to commercialize it. So that's
Speaker 3: what marching rights do, and by Dole was passed in
Speaker 3: nineteen eighty. Marching Rights was, by the way, not a
Speaker 3: big contention of the by Dole. We can talk about
Speaker 3: the debate of her by Doole. Marching rights was not
Speaker 3: an issue. People understood that, and for twenty years there
Speaker 3: was no there was no debate about it. But then
Speaker 3: what happened was I should also mention there were people
Speaker 3: that didn't like by Dole, and it was criticized on
Speaker 3: two bases. One of which was she had people like
Speaker 3: Ralph Naders Group Public Citizen and Admiral Ricover who liked
Speaker 3: the old policies that the government would take inventions away
Speaker 3: and put them in the public domain. The second debate was,
Speaker 3: and the more serious attack, was that by Dole only
Speaker 3: applied to universities and small companies, and a lot of
Speaker 3: people said, well, we should put big business in there,
Speaker 3: and we didn't do that because we said the promise
Speaker 3: is really more focused on universities than small companies. So anyway,
Speaker 3: twenty years after by Dole passed, we were sitting around
Speaker 3: mining our own business. A couple of law professors put
Speaker 3: out this article claiming they'd found a secret meaning in
Speaker 3: by Dole. You know, again, we don't leave you don't
Speaker 3: leave secret meanings in a statue like the da Vinci Code.
Speaker 3: Don't you don't write bills like the da Vinci Code.
Speaker 3: We have like secret meanings in there. So I when
Speaker 3: I actually got a copy of the article, I actually
Speaker 3: I was actually running a thing called the National Technology
Speaker 3: Transfer Center, which is funded by Congress to help people
Speaker 3: commercialize technologies. And at first I was stunned because I
Speaker 3: actually put together the hearings on by Doll. I wrote
Speaker 3: the Senate Judiciary Committee report, I staffed it through the Congress,
Speaker 3: and I actually oversaw the Department of Commerce. So I'm
Speaker 3: reading this paper and it has in there, you know,
Speaker 3: alleging to be the debate over by Dole, all about
Speaker 3: marching rights. And I don't recognize what they're talking about.
Speaker 3: So I look at the footnotes and I found that
Speaker 3: what they've done is the legislative history of the bill
Speaker 3: is the debate on that bill, you know, the committee
Speaker 3: report on that bill. What these people had done is
Speaker 3: they'd gone back and look at other committee debates over
Speaker 3: patent policy. There were bills before by Dole or people
Speaker 3: that didn't like by Dole, So it was actually I
Speaker 3: actually laughed once I realized what they did.
Speaker 4: I said, well, no one's going to believe this.
Speaker 3: I mean, you know, I guess anything can get through
Speaker 3: an academic publication. But then they then the two authors
Speaker 3: got a wrote an op ed in the Washington Post
Speaker 3: called paying Twice for the Same drugs, And what it
Speaker 3: was alleging was that the government could march in and
Speaker 3: force force university as to license another person if somebody
Speaker 3: thought that a product wasn't reasonably priced. Now, there's nothing
Speaker 3: in the statute about that. There's no definition of reasonable pricing.
Speaker 3: So I hadn't worked for birch Buy for twenty years,
Speaker 3: and I actually.
Speaker 4: Called him up on the telephone.
Speaker 3: We didn't really have PCs back then, in the ancient days,
Speaker 3: and I got him on the phone he was at
Speaker 3: a law firm and explained what was going on. I said, Senator,
Speaker 3: this is really serious now, because this is in the
Speaker 3: Washington Post and this completely misrepresents how your law works,
Speaker 3: and it actually undermines it. Because one of the bases
Speaker 3: of by Dole was we decentralized technology management from Washington
Speaker 3: to the people creating the technology. There's a few things
Speaker 3: government can do, but basically they get out of the way. Well,
Speaker 3: this was an attempt to reinsert Washington micromanagement, in other words,
Speaker 3: to turn the whole bill on its head, because now
Speaker 3: government can decide whether a product is reasonably priced or not.
Speaker 3: And so after I talked to Senator Buy, he said,
Speaker 3: let me call Bob Bob Dole, and so they immediately
Speaker 3: wrote a rebuttal.
Speaker 4: To the Washington Post.
Speaker 3: Now, when you're writing, when you're writing an article in
Speaker 3: the newspaper, there's an ed which is longer. They wouldn't
Speaker 3: give us an op ed. They would only give us
Speaker 3: a letter to the editor. So Buy and Dole wrote
Speaker 3: a rebuttle back saying that's not how the law works.
Speaker 3: And anyway, nevertheless, after that, the people that that uh,
Speaker 3: the Ralph naderfolks, started filing a series of petitions to
Speaker 3: the government alleging that the law allows the government to
Speaker 3: march in if a price was if a product isn't
Speaker 3: reasonably priced. And you know, it started its start of
Speaker 3: the whole thing which is which is existing to today.
Speaker 3: We can get into a little a little bit later.
Speaker 3: But that's that's really how we got into this debate again.
Speaker 3: It wasn't a fight. We saw it again for twenty years,
Speaker 3: the law work as intended, and all of a sudden
Speaker 3: you had people come up with a you know, a
Speaker 3: manufactured alternative history to buy Dole. So one of the
Speaker 3: things we've done in the Bi Dole Coalition to counter
Speaker 3: that is we put the original documents on our website.
Speaker 3: We have a thing called a virtual library, a digital library,
Speaker 3: so you can actually read the real history of Baidol
Speaker 3: and you'll see there's nothing in the statute about reasonable pricing.
Speaker 2: So that's a helpful history which I was not aware of.
Speaker 2: So I appreciate that. And I think when I reflect
Speaker 2: on your comments and our previous podcast, I think there
Speaker 2: is a bit of an insinuation that, well, Joe, you
Speaker 2: worked for the Senator, you were part of this effort
Speaker 2: to put this bill into law. Now you're kind of
Speaker 2: a hired gun of sorts. So of course your attitude
Speaker 2: or your views changed, and the legislative history shows that
Speaker 2: price was always meant to be part of this discussion.
Speaker 2: Seems like you're saying, no, it was never part of
Speaker 2: the discussion. Hence all that we've done is part of
Speaker 2: the coalition. But can you just expand on that a bit.
Speaker 3: I'm really happy to because you said it very nicely.
Speaker 3: It's actually worse than that. They've actually attacked the integrity
Speaker 3: of birch Buy and Bob Dole, who can't defend themselves. So,
Speaker 3: as I mentioned before, Senator By and Dole immediately responded
Speaker 3: to the Washington Post saying price is not a factor
Speaker 3: in by Dole, and they started filing marching petitions shortly
Speaker 3: after that, basically on this false premise that by Dole
Speaker 3: allows people to mark the acause the government to march
Speaker 3: in if a product isn't reasonably priced. So there's only
Speaker 3: been one public meeting in twenty years on marching petitions,
Speaker 3: and that was held by the National Suits of Health
Speaker 3: on the on the first one on price control. And
Speaker 3: they didn't call it a hearing, they called it a
Speaker 3: meeting because under the marching rights, the way it works is,
Speaker 3: first of all, somebody files a petition like they did,
Speaker 3: the agency looks at it and says, okay, do you
Speaker 3: meet one of the four triggers we talked about earlier.
Speaker 3: If you didn't meet the four triggers, it's dismissed. If
Speaker 3: you do meet the four triggers, it starts a whole
Speaker 3: series of administrative hearings and you can actually appeal to
Speaker 3: the Court of Claims. But what NIH did was when
Speaker 3: this first came up, they had a public meeting and
Speaker 3: had invited the critics in, and they also invited Senator By,
Speaker 3: and I went out with Senator Bye to Nih and
Speaker 3: what he did was and this this is on our website.
Speaker 3: His statement is in there. The paper that I mentioned
Speaker 3: before that misrepresented the Congressional history only quoted two parts
Speaker 3: of the actual hearing of by Dole, one of which
Speaker 3: was they lauded Admiral Rickover, who again, as I mentioned before,
Speaker 3: was opposed to by Doll. So you know, you always
Speaker 3: when you have a hearing, you have somebody out, you
Speaker 3: have people on both sides, and Admiral Ricover was the
Speaker 3: father of the nuclear Navy, and Senator By was very respectful,
Speaker 3: but his views were rejected by the committee. By Dole
Speaker 3: passed I think it was ninety five to four, so
Speaker 3: it had overwhelming support. The other thing they did was
Speaker 3: I wrote the Senate Judiciary Committee report. So when the
Speaker 3: petition went to Nih. The smoking gun they had was
Speaker 3: actually referencing the Senate Judiciary Committee report, And what they
Speaker 3: did was he took two things out of context that
Speaker 3: had nothing to do with marching rights, combined them and
Speaker 3: to imply that we were actually saying that you could
Speaker 3: march in for price control. So if you read Senator
Speaker 3: buy statement, he actually showed specifically in the hearing record
Speaker 3: how they took those things out of context. And we
Speaker 3: weren't even talking about marching rights. We were talking about
Speaker 3: other parts of the law. So what happened was Nih
Speaker 3: dismissed the petition, as actually every petition has been dismissed
Speaker 3: even up into the Biden administration. So about five or
Speaker 3: six years after that, the people pushing this narrative came
Speaker 3: up with a new theory and they said, well, you
Speaker 3: can't listen to birch Buy and Bob Dole because their
Speaker 3: law firms represented drug companies, and therefore you should dismiss
Speaker 3: everything they said, including the statement for Nih and also
Speaker 3: the op ed, And they implied that By went to
Speaker 3: that meeting representing drug companies. Well, I can tell you
Speaker 3: I was there. I know why birch By.
Speaker 4: Went to that meeting.
Speaker 3: I know why he went to the outbed not because
Speaker 3: of a drug company, because I contacted him, and I
Speaker 3: was running the National Center for Technology Commercialization, which was
Speaker 3: funded by the government, had nothing to do with drug companies,
Speaker 3: and Senator by and I rode the metro out there.
Speaker 3: You know, if he was representing some well healed drug company,
Speaker 3: we would have gone in a limo like some of
Speaker 3: the other speakers did. But you know, it's a slur
Speaker 3: on both of them. They cannot defend themselves. So what
Speaker 3: happens is every time they're proven wrong by facts. And
Speaker 3: again this is not Joe Allens of this. We showed
Speaker 3: the actual legislative history, the actual you know, the actual
Speaker 3: the actual committee language. You know, this is not things
Speaker 3: we're just misremembering. And the other thing that that cuts
Speaker 3: against their narrative is no one can show at any
Speaker 3: time or any of us involved in by Dole ever
Speaker 3: said the law was tould be used for price control.
Speaker 4: So so every time they're.
Speaker 3: Proven wrong, rather than admitting it, they come up with
Speaker 3: a new story, either casting expersions on people like Bob
Speaker 3: Dole was a nineteen year old second lieutenant Italy a
Speaker 3: few weeks before World War iiO was in it and
Speaker 3: had his right arm shattered by a German machine gun.
Speaker 3: He went out and reinvented himself, went back, he had PTSD,
Speaker 3: basically went back to Kansas. The folks at his town
Speaker 3: rallied around him with the guy. He reinvented himself and
Speaker 3: became a public citizen. Birch By was the same. I mean,
Speaker 3: I've never heard when I worked on birch By staff,
Speaker 3: never heard anybody attack his integrity. So I got to
Speaker 3: tell you, actually, it actually frosts me. And this is
Speaker 3: putting it mildly to have people attack the integrity of
Speaker 3: Bob Dole and birch By on something where we're talking
Speaker 3: about the actual legislative history, and we're actually showing in
Speaker 3: writing how this is not factually true. This is not
Speaker 3: I feel this way, and this is not suddenly we
Speaker 3: were reversing ourselves before. We've been consistent throughout the whole debate,
Speaker 3: and the where you look at this you realize it
Speaker 3: doesn't hold up. And the evidence of that is every
Speaker 3: marching petition on price control has been dismissed by every administration.
Speaker 3: The most were dismissed under the Obama Biden administration. The
Speaker 3: Biden administration itself had one of the strongest denials of
Speaker 3: a price control marching right in March of last year.
Speaker 3: So it's not just Birch Buy and Bob Dole and
Speaker 3: Joe Allen say this. Republican Trump administration, Obama administration, Clinton administration,
Speaker 3: and Biden administration all said this is not how the
Speaker 3: law works. So it just exasperates me, as you can
Speaker 3: probably tell from my tone here, that we keep having
Speaker 3: the same debate because clearly the law does not say that.
Speaker 4: And the final thing I'll say.
Speaker 3: Is Senator Joe Biden voted for by Dole he was
Speaker 3: on the Judiciary Committee, and reasonable pricing is not in
Speaker 3: the statute. In fact, Senator Bernie Sanders, when he was
Speaker 3: on the House, tried to act, actually put into legislation
Speaker 3: a basis for reasonable pricing that was voted down, and
Speaker 3: one of the people that voted against it was Senator
Speaker 3: Joe Biden.
Speaker 2: So yet again that's helpful context for this discussion because
Speaker 2: we are hearing comments from both sides about what was meant.
Speaker 2: And since you were there, this provides some helpful framing
Speaker 2: for the discussion moving forward. And I do want to
Speaker 2: go back to this question of reasonable reasonable terms and
Speaker 2: just generally reasonable, because that's where this price discussion or
Speaker 2: where they're trying to insert price into this framework. What
Speaker 2: I've seen, we've seen you say that this is a
Speaker 2: bit of a poison pill, and we've spent the last
Speaker 2: several minutes talking about that. Your feelings on how this
Speaker 2: came to be iministration, where to move forward? What issues
Speaker 2: can you foresee happening as a result.
Speaker 3: Well, that's a great question, because what's happening is this
Speaker 3: is playing out in real time right now, and just
Speaker 3: to close the loop for your listeners, as I mentioned before,
Speaker 3: well let me go back one other step. So remember
Speaker 3: there's there's four triggers of marching rights. Where we talked
Speaker 3: about practical application, which means that which is defined as
Speaker 3: the products made available on reasonable terms. That only applies
Speaker 3: to the university, the patent owner, not the licensee, the developer.
Speaker 3: And as Senator By said, if we had intended this
Speaker 3: for price control, I should actually add this also, there's
Speaker 3: four triggers. The first one only applies to the university.
Speaker 3: The triggers on you know, meeting public health and safety needs,
Speaker 3: meeting needs of government regulation, and also making sure you're
Speaker 3: going to make the product in the United States, if
Speaker 3: you agreed to apply to the patent owner and the
Speaker 3: licensee the developer. So the first one they were arguing
Speaker 3: about only applies to the university. And as Senator bi said,
Speaker 3: if if Congress had intended that to be price controlled,
Speaker 3: universities don't set prices, the companies do. So if we
Speaker 3: had intended that to be for price control like the
Speaker 3: other three, it would have had industry the licensee in there,
Speaker 3: not just the patent honor. So what happened was as
Speaker 3: I mentioned before, and actually the Biden administration makes that
Speaker 3: distinction when they dismissed the petition for extanding, which is
Speaker 3: a prostate cancer drug. And by the way, there's only
Speaker 3: been a handful of petitions filed. More than half of
Speaker 3: them have been filed on extending. They keep filing the
Speaker 3: extending petition. It's been filed at least six times, it's
Speaker 3: been dismissed six times, and they keep refiling it. That's
Speaker 3: what this fight is really about. It's one of the
Speaker 3: few drugs where the where the patents actually were made
Speaker 3: by the federal were funded by the federal government. So
Speaker 3: what happened was in March of twenty twenty three, the
Speaker 3: Obama administration, I'm sorry, the Biden administration, like every other before,
Speaker 3: it has dismissed a price control marching petition. But when
Speaker 3: they did it, you had people like Senator Sanders and
Speaker 3: Senator Warren basically, you know, we're apoplectic that their pet
Speaker 3: project has been dismissed again. So the Biden administration said, okay, well,
Speaker 3: we're going to have an interagency group look at developing
Speaker 3: a marching framework and actually look about.
Speaker 4: Price as a possible term.
Speaker 3: So that was just released on December seventh, twenty twenty three, which,
Speaker 3: for those of us who are history people, is Pearl
Speaker 3: Harbor Day. So on this Pearl Harbor Day, rather than
Speaker 3: being bombed by a foreign entity, we basically bombed ourselves.
Speaker 3: The Biden administration now said, even though this dismissed the
Speaker 3: same marketment in March, well maybe price could be a
Speaker 3: factor in marching rights. And so that's been pending now
Speaker 3: and they have a sixty day period for making comments.
Speaker 3: It's a draft guideline. By the way, the sixty day
Speaker 3: comment period is very unusual because that also in those
Speaker 3: sixty days include Christmas hu New Year's. Martin Luther King Day,
Speaker 3: So you're really short circuited people's ability to get comments
Speaker 3: in and they put up this draft framework. So what's
Speaker 3: happening now is people are actually looking at this and
Speaker 3: realizing what the impact would be. The other thing that's
Speaker 3: happened is right before the Marching Framework came out, there
Speaker 3: was a study done by a group called Vital Transformation
Speaker 3: and they actually looked at the drugs have been commercialized
Speaker 3: between I think twenty thirteen and twenty twenty to see
Speaker 3: what the impact of marching rights would be, and what
Speaker 3: they found was that ninety nine percent of them could
Speaker 3: not be marched in on For a simple reason. Bidle
Speaker 3: only applies to federally funded inventions, and drugs have a
Speaker 3: number of patents around them. Maybe at the most maybe
Speaker 3: one or two are bi Doole inventions. The rest of
Speaker 3: them are made by industry, so to copy that drug,
Speaker 3: you have to have access to all the inventions, not
Speaker 3: just the bidole inventions. As it turned out is this
Speaker 3: is all being done. This is being hyped as a
Speaker 3: new weapon to control drug pricing.
Speaker 4: Well it's not.
Speaker 3: It's clearly not, because ninety nine percent of the drugs
Speaker 3: are not susceptible to it. In fact, you're in your
Speaker 3: last podcast, doctor Kesselheim admitted that he said, well, it
Speaker 3: really wouldn't do much to control drug prices.
Speaker 4: It wouldn't do anything to control drug prices. But here's the.
Speaker 3: Other thing that people forget. By DOLE doesn't just apply
Speaker 3: to the National Suits of Health. It applies to all
Speaker 3: federal agencies and are under by DOLE. Seventy five percent
Speaker 3: of inventions of universities are licensed to small companies. Small
Speaker 3: companies drive American innovation, even in the life sciences, even
Speaker 3: in things like immunotherapy mRNA. It was actually small companies
Speaker 3: that took those licenses from universities years before big companies
Speaker 3: wanted to wanted to actually be interested in them. So
Speaker 3: now if you introduce price as a factor, anyone can
Speaker 3: file a marching petition. And the other thing is that
Speaker 3: we should mention to youar your listeners, is there's no
Speaker 3: definition in the in the in the law because we
Speaker 3: never intended it or in these guidelines. What do you
Speaker 3: mean by a reasonable price? So just imagine this you
Speaker 3: want to start a startup company. We actually formed three
Speaker 3: new startup companies every day of the year under by DOLE.
Speaker 3: Energy technology companies environmental companies whatever, and they are formed
Speaker 3: around university inventions. So you go into license of technology
Speaker 3: and suppose this guideline is in place, and you ask
Speaker 3: the university, well, what do you mean by a reasonable price,
Speaker 3: and they can't tell you, well, no one is going
Speaker 3: to commercialize that. And we're seeing this already because here's
Speaker 3: the way the system would work under where the critics
Speaker 3: are trying to set up. You go ahead and commercialize
Speaker 3: the technology. Now that's an easy thing to do. If
Speaker 3: you're talking about a new drug, you're talking about probably
Speaker 3: at least ten years of your life and two billion
Speaker 3: dollars in funding. Or even if you're talking about a
Speaker 3: battery technology or an environmental technology, these are early stage inventions,
Speaker 3: so you're really talking about five to seven years ten
Speaker 3: years at the best the actually come up with a product,
Speaker 3: and you're going to have to get venture funding to
Speaker 3: do that. So suppose you actually come up with it,
Speaker 3: and you have a product on the market and somebody says, well, Dwayne,
Speaker 3: I don't think your product is reasonably priced, and there's
Speaker 3: no definition of that. Well, a large company can always
Speaker 3: a copier, can always make things cheaper than the innovator.
Speaker 3: You didn't have any costs, You didn't.
Speaker 4: Do any R and D.
Speaker 3: So you can always make the argument that I could
Speaker 3: make it cheaper than you did, particularly a large company.
Speaker 3: So what's happening. This is happening right now under this
Speaker 3: draft guidelines. David Capos was Obama's Director of the Patent Office,
Speaker 3: And actually I was just on a program with him
Speaker 3: last week, and David Capos is advising major corporations and
Speaker 3: major fenantciers, and he said, as of now, under these guidelines,
Speaker 3: federal funding is toxic. I'm telling my clients stay away
Speaker 3: from it. In fact, he said he had a major
Speaker 3: under ask him, hey, should I put any money into
Speaker 3: a startup company? And Campos said I have to advise him, no,
Speaker 3: you should hold off on this because this is chilling
Speaker 3: the whole American innovation system. And the other thing I'll
Speaker 3: say is this is retroactive. So suppose you commercialize the
Speaker 3: technology ten years ago under the old region, under the
Speaker 3: way Buidole had work for forty three years. You're in
Speaker 3: the market right now. Anybody can file a marching petition
Speaker 3: and say, hey, I don't really like I don't think
Speaker 3: Trici's prices is reasonable. There's no definition of that. So
Speaker 3: if I can make it cheaper than you, maybe the
Speaker 3: government's going to give me a license to actually copy
Speaker 3: what you just did. So if you want to give
Speaker 3: a gift to the Chinese, this is it. In one shot.
Speaker 3: They've knecapped American innovation. It's not going to lower drug prices,
Speaker 3: but it's having an impact right now because people have
Speaker 3: to assume this is how the system's going to work,
Speaker 3: and they've turned forty three years of law upside down.
Speaker 3: The final thing I'll say on this is this is
Speaker 3: a blatant attempt to change a law without the consent
Speaker 3: of Congress. There is nothing in bi Dole that justifies this.
Speaker 3: For forty three years, not just Joe Allen saying this,
Speaker 3: we can show the legislative history and actually the march
Speaker 3: impetition denials of every administration or on our website read
Speaker 3: them for yourself. The Biden administration is the strongest one.
Speaker 3: So for forty three years, this is not how the
Speaker 3: law worked. And then suddenly we wake up one day
Speaker 3: and for some reason which I can't explain, the Biden
Speaker 3: administration is now pretending like, yes it is. So this
Speaker 3: is throwing our whole system up in the air. It's
Speaker 3: not going to have any impact, minimal impact on drug pricing,
Speaker 3: but it's chilling right now. And you know, any the
Speaker 3: Bidol Act covers funding like under the Chips Act, the
Speaker 3: Cancer Moonshot, Department of Agriculture, Interior, I mean, name your agency, NASA.
Speaker 3: Any invention made by those now falls under this and
Speaker 3: people are scared to death to commercialize it or actually
Speaker 3: probably now regretting they ever did, because now you have
Speaker 3: a target on your back and no one can tell
Speaker 3: you how you're going to be judged. No one can
Speaker 3: tell you what are reasonable prices. That's made up after
Speaker 3: the fact. So if some GS fourteen and some agency decides,
Speaker 3: you know, we could make this product cheaper by a copier,
Speaker 3: you're now in trouble, you know.
Speaker 1: I to me, that's a it's an interesting discussion because
Speaker 1: you know, I think when we're talking about drug prices,
Speaker 1: it seems right now that patents right are the enemy
Speaker 1: to drug pricing, and we certainly see that here with
Speaker 1: the march in right petition wanting price to be a
Speaker 1: factor to be able to march in on patents, and
Speaker 1: as you said, it seems like that's going to be
Speaker 1: a really small scenario. Maybe I standy's the only one
Speaker 1: where all the patents are going to have you know,
Speaker 1: government funding. But it's you know, are patents the problem?
Speaker 1: I mean, what what is the issue right now? Do
Speaker 1: you think in your view that people are so focused
Speaker 1: on patents and drug pricing? And you know, because I
Speaker 1: think that's kind of the underlying theme that we see
Speaker 1: in all of these things, whether it be trying to
Speaker 1: update the framework for marching rights or you know, I
Speaker 1: know you're not a drug pricing expert, but we see
Speaker 1: the IRA which comes into lower prices for medicare ahead
Speaker 1: of certain patent expirations. And then you know, we've even
Speaker 1: seen an introduction some bills about trying to deal with
Speaker 1: patent thickets. So you know, patents really right now are
Speaker 1: a hot topic. So I mean, what's your sort of
Speaker 1: initial take on that, like, are patents the problem? Like
Speaker 1: what's the issue here?
Speaker 3: Well, you know, again, actually that's a that's a great question.
Speaker 3: The whole issue of healthcare is very complicated, and you know,
Speaker 3: everyone wants to reduce the cost of health care, but
Speaker 3: it's a you know, the more you look into it,
Speaker 3: and this is way above my pay rate, it's hard
Speaker 3: to get your hands on because there's so many moving
Speaker 3: parts of it. So I think patents are an easy target.
Speaker 3: But what you find is actually I didn't mention this.
Speaker 3: One of the things that we actually had the US
Speaker 3: Controller General Elmerstatz testify at the Bidole hearing, and what
Speaker 3: we found was before by DOLE, when the government took
Speaker 3: the rights away. According to the Controller General and NIH,
Speaker 3: not a single drug was developed from an NIH funded
Speaker 3: invention when it was taken away by the government. So
Speaker 3: this whole theory that if stuff just is in the
Speaker 3: public domain, somehow magically is going to turn into a
Speaker 3: new drug is not true. And in fact, if you
Speaker 3: look at who creates drugs, the US is far and
Speaker 3: away the leader of that. And we're the only country
Speaker 3: in the world where fifty percent of our new drugs
Speaker 3: come from small companies because again the bi Dole Act
Speaker 3: gives small companies the incentive to take risks that other
Speaker 3: people can't. I've actually mentioned aminotherapy. Immunotherapy was it was
Speaker 3: invented in the University of California, Berkeley. It was a
Speaker 3: revolutionary new way of doing cancer therapy. For ten years,
Speaker 3: they could not find a single company and should in
Speaker 3: licensing it, and this typical universities. People think that companies
Speaker 3: are just lined up tonse government funded at inventions. If
Speaker 3: you find one company, you're lucky. So for ten years
Speaker 3: they couldn't find a licensee. They finally found a small
Speaker 3: company licensee and the same thing with mRNA. They would
Speaker 3: start the work going and eventually that got taken up
Speaker 3: by other companies. But without patent incentives, these things are
Speaker 3: not being developed. I mean, there's no socialist country that
Speaker 3: develops drugs. So I think it's a simplistic argument to say, well,
Speaker 3: maybe we just confiscated these but we just took these
Speaker 3: things away from people and gave them to copiers, we
Speaker 3: would solve the whole system. Well, socialism doesn't work as
Speaker 3: far as as innovation goes. And I think it's a
Speaker 3: simplistic argument. But the same people attacking by doll are
Speaker 3: attacking the patent system. They're actually asking the administration to
Speaker 3: give away all of our COVID therapies under the what's
Speaker 3: called the Trips Waiver, which was supposed to be an
Speaker 3: international agreement to have a certain platform of patent ability.
Speaker 3: And basically what they're talking about is, well, any any
Speaker 3: country that wants to copy one of our technologies related
Speaker 3: to COVID can.
Speaker 4: Do so if it's a developing nation.
Speaker 3: Well, developing nations includes China and India, so you know,
Speaker 3: it just staggers my imagination to think about America is
Speaker 3: the most innovative country in the world, frankly because of
Speaker 3: our patent system. But attacking the patent system is not
Speaker 3: going to solve healthcare. It's a much more complicated issue,
Speaker 3: and I think the fact that people can't come up
Speaker 3: with any other solution than taking other people's stuff away
Speaker 3: just shows it's really really hard to do. So again,
Speaker 3: I'm not an expert on drug development. I couldn't develop
Speaker 3: a drug if my life depended on it, but I'm
Speaker 3: very thankful that people do because the only thing worse
Speaker 3: than expensive drugs would be no drugs at all, and
Speaker 3: I think that's the alternative. So we need to find
Speaker 3: ways of, you know, de risking drug development. It's one
Speaker 3: of the highest risk and longest term things you can do.
Speaker 3: You know, more than ninety percent of the drugs going
Speaker 3: through the pipeline fail. And the other thing I should
Speaker 3: mention under bay Dole when these products fail, it's a
Speaker 3: company that takes the hit the government. No one, No
Speaker 3: one is laid off at NIH or University if one
Speaker 3: of their inventions it's license, doesn't make it in the market.
Speaker 3: But companies, especially small companies, bet the farm. And that's
Speaker 3: what's so nefarious about this price control debate is because
Speaker 3: it puts a cloud over those small entrepreneurial companies that
Speaker 3: put everything they have, all their livelihood into creating a company.
Speaker 3: And now you're saying, if you succeed, we can take
Speaker 3: it away from you, if somebody can make that cheaper.
Speaker 3: So it's it's it's not it's certainly not the solution
Speaker 3: to the healthcare issue. And I think it's one of
Speaker 3: those things where people, you know, people that that that
Speaker 3: have been looking at this for for years and years
Speaker 3: and having a hard time, you know, figuring out because
Speaker 3: just by its very nature, it's expensive to develop a
Speaker 3: new drug. I mean, that's just that's just the way
Speaker 3: the system is, and that there's there's hard to work
Speaker 3: around that. But I think one thing we should be,
Speaker 3: one thing we should be able to agree on is
Speaker 3: killing killing the American innovation engine. Killing the law that
Speaker 3: the Economist Technology Quarterly said was the most inspired statute
Speaker 3: in fifty years is certainly not the way of doing it.
Speaker 3: I'll add one other thing. When I was at the
Speaker 3: Department of Commerce actually oversaw BIDLA. At the Commerce Department
Speaker 3: in the early eighties, I was in a CIA briefing,
Speaker 3: a classified briefing, and they showed us the ten technologies
Speaker 3: of the future, and of those, we'd already lost five
Speaker 3: to Japan, and the CIA was saying, we're going to
Speaker 3: lose at least three more, just the way the trends
Speaker 3: were going.
Speaker 4: We didn't lose.
Speaker 3: Now a couple of years later, we lead in every
Speaker 3: field of technology because of our public private partnerships. So
Speaker 3: this is not just a drug development issue. This is
Speaker 3: a clean technology issue, an energy issue, and agricultural issue.
Speaker 3: It's our small entrepreneurial country companies that carry our system.
Speaker 3: And again, imposing price control is not going to have
Speaker 3: any impact on drug development for the very reason we
Speaker 3: said before. The patents aren't covered by federal funding. In fact,
Speaker 3: it's really funny now it's actually not funny.
Speaker 4: It's tragic.
Speaker 3: The same people pushing this narrative are now conceding that
Speaker 3: marching rights won't control drug prices. So you know what
Speaker 3: they're asking for now they want the government just to
Speaker 3: confiscate the private, private inventions, private patents, and then private
Speaker 3: know how so they can copy it then, so you
Speaker 3: know clearly their theory doesn't work. They're acknowledging that themselves.
Speaker 3: You actually heard from your last broadcast people are saying, well,
Speaker 3: marching rights wouldn't really lower drug prices after all, but
Speaker 3: it's going to have a devastating impact on other fields
Speaker 3: of technology because once you open this up, you release
Speaker 3: the furies on everything. And here's my other prediction, and
Speaker 3: this is going to happen very soon. You're going to
Speaker 3: have shakedown artists start filing marching petitions against small companies
Speaker 3: and they're going to say, hey, Dwayne, really a shame
Speaker 3: if somebody filed a marchin against you. Now you're trying
Speaker 3: to get venture funding. Maybe you should make it worth
Speaker 3: my while to go away, or maybe should let me
Speaker 3: copy it. So this is going to become a cottage industry.
Speaker 3: You're turning Bidle on its head. For forty three years,
Speaker 3: it worked like a charm. There's no bureaucracy. Everyone understood
Speaker 3: how it worked. Now you've turned the whole system upside
Speaker 3: down where no one can tell you what a reasonable
Speaker 3: price is and the consequences are are foreign competitors, your
Speaker 3: brother in law who doesn't like you, or a shakedown
Speaker 3: artist can now file a marching petition and even if
Speaker 3: they're not successful, if I know you're out looking for
Speaker 3: another round of venture funding, no one is going to
Speaker 3: fund you with this hanging.
Speaker 4: Over your head.
Speaker 3: So it's just one of those things that the more
Speaker 3: you look at it, the dumber it is. And I
Speaker 3: think what's happening now is you're having a bipartisan reaction
Speaker 3: on the Hill realizing first of all, this is an
Speaker 3: attempt by the executive branch to change a statute without
Speaker 3: the consent of Congress, which they can't do. And secondly,
Speaker 3: it's not going to have any impact on drug price control,
Speaker 3: but it's having a huge impact on American innovation. Things
Speaker 3: like the Chips Act are covered by by DOLE, So
Speaker 3: Congress is putting billions of dollars now trying to get
Speaker 3: us competitive. As in other fields, clean energy, battery technologies,
Speaker 3: environmental technologies, all of them fall under by DOLE, and
Speaker 3: all of them under this cloud now. So it's you know,
Speaker 3: it's really it's catastrophic. I mean, this is this is
Speaker 3: a major This is Pearl Harbor on American innovation, but
Speaker 3: we bombed ourselves.
Speaker 1: Yeah, and it sounds like I mean, I think, you know,
Speaker 1: if the framework's going to pass, you have to think about, Okay, well,
Speaker 1: what's the impact going to be on licensing and collaboration agreements,
Speaker 1: especially between let's say academic let's say sticking in the
Speaker 1: realm of drugs. But it sounds like this is going
Speaker 1: to apply across the board to different technologies, you know,
Speaker 1: between academic medical research centers and biotech companies. I mean,
Speaker 1: you sort of hinted on this, but we talked about
Speaker 1: a little before. I think it was out of you know,
Speaker 1: mRNA vaccines in COVID. Huge innovation in one of the
Speaker 1: patents sort of underlying that technology is out of the
Speaker 1: University of Pennsylvania with you know has you have Drew
Speaker 1: Weissman and Kaitlyn Carrico and this patent on modifying a
Speaker 1: residue that modified you in the RNA and that is
Speaker 1: a subject invention. But it doesn't cover the entirety of
Speaker 1: the COVID vaccines.
Speaker 3: Right.
Speaker 1: The COVID vaccines are protected by a large amount of
Speaker 1: IP that covers changes you make to the RNA, how
Speaker 1: you deliver it, what the sequence is, and so. But
Speaker 1: who's going to bear I guess the burden of this risk.
Speaker 1: I mean, our manufacturer is going to price this in
Speaker 1: whenever they're contracting with universities. Is this really going to
Speaker 1: impact universities and tech transfer offices more than it's going
Speaker 1: to impact sort of the big pharma.
Speaker 4: That's a great question.
Speaker 3: Actually, we had a briefing on Capitol Hill last week
Speaker 3: and we had I mentioned David Capos, the former Patent
Speaker 3: commissioner under the old of Administration, and Kate Hudson. Kate
Speaker 3: Hudson is with the Association of American Universities. Kate said,
Speaker 3: this kills academic tech transfer. And here's the other thing.
Speaker 3: Remember this is a guideline people are assuming now that
Speaker 3: this is and what we're asking you buy the Administration
Speaker 3: to the bi Dole Coalition, we're saying this should be
Speaker 3: rescinded because this is having an impact on our system
Speaker 3: right now. And David Capo said, it's you know, right now,
Speaker 3: if a company decides the license university technology, you're doing
Speaker 3: it now to protect yourself against infringement. He said, the
Speaker 3: value of that that that patent has gone way down
Speaker 3: now because it's toxic, you know, again, just because of
Speaker 3: all the reasons we talked about, you're opening yourselves up
Speaker 3: now for somebody claiming they can make the product cheaper
Speaker 3: than you, and if they can, then the government should
Speaker 3: take it away. So this takes us back to the
Speaker 3: pre by Dole errors where companies didn't want to work
Speaker 3: with universities. You know, before by Dole, you didn't find
Speaker 3: a bunch of startup companies coming out of universities across country.
Speaker 3: We form three startup companies every day of the year
Speaker 3: and commercialize three new products every day of the year
Speaker 3: from academic invention licenses, seventy five percent of which go
Speaker 3: to small companies. So all that's in danger right now.
Speaker 3: And it just boggles the mind to think that that
Speaker 3: we're doing this under the guise of drug price control,
Speaker 3: which for the very reasons you talked about, can't possibly work.
Speaker 3: The people that have been pushing this for twenty years
Speaker 3: now are finally having to concede when people look at it, well, no,
Speaker 3: this really wouldn't lower drug prices because you can't get
Speaker 3: all the patents. So rather than that they were wrong,
Speaker 3: they're trying to push us further into swampsea. Well, now
Speaker 3: the government sho just confiscate private property. You know, we've
Speaker 3: heard that one before. If that work, Venezuela would be
Speaker 3: the most innovative country in the world. But you know,
Speaker 3: you're really these people's motive is being more and more
Speaker 3: apparent because they're what they really really want is and
Speaker 3: they've even talked about this decoupling R and D from markets,
Speaker 3: which means the government should fund development. And the other thing,
Speaker 3: the other falsehood is what they're telling people is the
Speaker 3: government's funding research and development. Remember what I mentioned that
Speaker 3: the two people that wrote the law review article there
Speaker 3: oft in the Washington Post was called paying twice for
Speaker 3: the same drugs. So the implication is, well, the government's
Speaker 3: actually funding not only early stage research but development. Well
Speaker 3: that's clearly, clearly, clearly untrue. You know, companies are taking
Speaker 3: a huge risk on any any family funded invention, and
Speaker 3: most times at risk doesn't pay out, and when it
Speaker 3: doesn't pay out, people lose their jobs, not at nih
Speaker 3: but in the companies. So the genius of by Dole
Speaker 3: is the risk is put on the private sector. We
Speaker 3: gave them incentives, but the benefits to the public are
Speaker 3: you're funding early stage research. Now it's being turned into
Speaker 3: products like Google came out of by Dole, Barcodes came
Speaker 3: out of by Dole, Honey crisp apples came out of
Speaker 3: by Dole, Immuno therapy came out of by Dole. It's literally,
Speaker 3: it's literally revolutionized how people live here and around the world,
Speaker 3: and all that's being put in jeopardy now on a
Speaker 3: theory which is first of all not legally sound. And
Speaker 3: now it's turning out that once people look at it,
Speaker 3: it's not even a good policy because it can't possibly
Speaker 3: work in the field they were talking about, but it's
Speaker 3: going to be devastating to other fields. So, you know,
Speaker 3: the more that people look at this, I think it's
Speaker 3: actually falling apart under its own now. And like I said,
Speaker 3: we're having bipartisan people on Capitol Hill looking at this
Speaker 3: and it makes less and less sense to where you
Speaker 3: look at it. But unfortunately, until the Biden administration pulls
Speaker 3: this thing back, it's having a huge impact right now
Speaker 3: and that's only growing because now people are aware of it.
Speaker 4: There's a thing called this.
Speaker 3: Small Business Innovative Research Act, which every agency has to
Speaker 3: give under law a percentage of their funding to small companies.
Speaker 3: Before a by Dole innovative small companies didn't want to
Speaker 3: take government grants because if you made an invention that
Speaker 3: was taken away from you. Well, SBR has changed that.
Speaker 3: So I was actually talking to one of the people
Speaker 3: that started the sbi R program. And for years I've
Speaker 3: been telling people, listen, this marching thing is not just
Speaker 3: going to hit It's not going to hit drug companies,
Speaker 3: It's going to hit everybody else. So when I explained
Speaker 3: that the SBIR program is under by Dole, that's the
Speaker 3: basis of it, this guy said to me. He says,
Speaker 3: So what you're telling me is this is not the
Speaker 3: drug companies problem, this is my problem. And I said exactly.
Speaker 3: The National Adventure Capital Association wrote a very strong letter
Speaker 3: to President Biden directly urging him to pull this thing
Speaker 3: back again because it's chilling their interest and funding new companies.
Speaker 4: So this is a big deal.
Speaker 3: This is not some obscure little patent thing. This strikes
Speaker 3: at the foundation of American innovation. It's what made us competitive.
Speaker 3: It was driven the American industrial renaissance, which started in
Speaker 3: nineteen eighty with by Dole. He continues to today. But again,
Speaker 3: if you wanted to give gift to the Chinese, this
Speaker 3: is it because in one fell swoop, the administration now
Speaker 3: has put a cloud over the whole innovation system, has
Speaker 3: made us that the wonder of the world. Bidele is
Speaker 3: a recognized best practice South Africa has adopted by DOLE
Speaker 3: as a way to actually start commercializing their own technologies.
Speaker 3: So this really is a big deal. It's not some
Speaker 3: little small thing, and it's all based on a false
Speaker 3: premise which the more you look at it doesn't stand
Speaker 3: up legally and doesn't stand up as a policy.
Speaker 2: Thanks Joe. That in mind. What's the outlook for the
Speaker 2: next several months. Do you think the administration moves forward
Speaker 2: with this?
Speaker 3: That is a billion dollar question, and actually a billion
Speaker 3: is a low estimate. I don't know. I think this
Speaker 3: was imposed.
Speaker 4: By political operatives in the White House.
Speaker 3: It was imposed on the on the agencies, because if
Speaker 3: you actually look at the framework, a lot of the
Speaker 3: framework actually contradicts going forward on using reasonable pricing as
Speaker 3: a margin criteria. But the danger is this is having an
Speaker 3: impact right now. It's not like this is a rule
Speaker 3: that's going into effect. They didn't make it a regulation
Speaker 3: and it's a guideline. So I'm really hoping that as
Speaker 3: more and more people weigh in again on a bipartisan basis,
Speaker 3: that growing ups in the White House are realized that
Speaker 3: this is really a disaster and we'll pull it back,
Speaker 3: because the worst thing is if you just let this
Speaker 3: sing linger. Okay, we've made a mistake, but we don't
Speaker 3: want to admit it's legislative linger. Well, it's chilling. It's
Speaker 3: having an impact right now. People are not investing in companies,
Speaker 3: people are not licensing technologies, and that's only going to
Speaker 3: grow because remember this has only happened, this has only
Speaker 3: been a month old, where the word is just getting
Speaker 3: out now people are just understanding. Like I said, my
Speaker 3: friend that did SBR, all of a sudden, he realizes, hey,
Speaker 3: this is not hitting drug companies, it's hitting my SBR companies.
Speaker 4: So I'm really hoping.
Speaker 3: That the administration will realize, as President Biden said, you know,
Speaker 3: as Senator Biden did, bideal works and price control is
Speaker 3: not part of the statute. So I'm really hoping they'll
Speaker 3: hold this thing back because just letting this linger out
Speaker 3: there is really have an impact. But the deadlines for
Speaker 3: making comments on February six is rapidly coming up. But
Speaker 3: I'm just praying and hoping that that wiser people will
Speaker 3: prevail and realize that this is a This is a
Speaker 3: huge risk and the consequences are catastrophic. I mean that's
Speaker 3: may sound like hyperbole, but it's catastrophic and it's damage
Speaker 3: we're inflicting on our own system that will won't do
Speaker 3: any good to anybody. So I'm just hoping as we
Speaker 3: get the word out to more and more people, that
Speaker 3: folks in the administration will realize, hey, this doesn't make
Speaker 3: any sense. Maybe it sounds like a good talking point,
Speaker 3: but even that doesn't hold up because, like I said,
Speaker 3: even the people pushing him into this are now having
Speaker 3: to concede it won't control drug prices, So you know,
Speaker 3: what have you really benefited from? So we'll hope and see.
Speaker 3: I'm hoping things like this this brought this broadcast help
Speaker 3: get the word out. But this really is a big deal,
Speaker 3: and it's it's so disheartening because this is not something
Speaker 3: the Chinese launched on us. This is not some cyber attack.
Speaker 3: This is something that we did to ourselves. You know,
Speaker 3: no one forced us into this. This is an unforced error,
Speaker 3: kind of like the guy yesterday from Detroit who fumbles
Speaker 3: the ball right across before the goal line. You know,
Speaker 3: this is an unforced error, and the consequences, unlike a
Speaker 3: football game, are going to be very very serious. People
Speaker 3: are going to lose jobs, We're gonna lose competitiveness, and
Speaker 3: once people lose confidence and the government is a reliable partner,
Speaker 3: that's very very hard to restore. By Doll didn't just
Speaker 3: take off overnight. It took us years to convince people
Speaker 3: that the policies really changed, that the statutes works as
Speaker 3: we talked about, and you really can trust the government
Speaker 3: can be a reliable partner. All that's gone out the
Speaker 3: window with this because who can trust? Who can trust
Speaker 3: the administration that in March says this is not how
Speaker 3: the law works, and then December said, well, actually.
Speaker 4: Yes it is.
Speaker 3: Yeah.
Speaker 1: I think, you know, this is going to be a topic.
Speaker 1: I think that we keep hearing talking points on and
Speaker 1: you know, I think, as Dwayne and I said in
Speaker 1: our last one, we'll have to maybe revisit this in
Speaker 1: a year and really see what's happened. Has there been
Speaker 1: sort of a change in how the administration views this,
Speaker 1: what happens with the election, and also if it moves forward,
Speaker 1: is there really this chill that we're seeing in innovation
Speaker 1: and the implications. But Joe, thank you so much for
Speaker 1: joining us today. I think this really helped round out
Speaker 1: our discussion on March and rights. And thank you the
Speaker 1: listener for joining us today on our Woods and Verdicts
Speaker 1: podcast and we hope you listen in on our next episode.
Speaker 1: Thank you