Uncoupling Scientific Progress From Human Progress: Part III. The Loss of Checks and Balances: “Bayhing for blood or Doling out cash?”

Posted on | December 27, 2016 | 1 Comment

Mike Magee

The results of the Bayh-Dole Act were dramatic, at least for health care institutions. While 380 patents were granted to them in 1980, that number soared to 3088 by 2009. Those patents, now under the control of individual scientists and their parent academic institutions, were subsequently licensed to corporations for the development of a range of products and applications. According to one estimate, the resultant impact on the nation’s Gross Domestic Product (GDP) reached $47 billion in 1996, and soared to $187 billion a decade later. Since 1980, 2,200 new companies appeared and generated more than 1000 new products. As important, the new technologies spawned entirely new industries in the United States including the field of biotechnology.(1,2)

As a change agent, few legislative actions could compete with this one. The new industries spawned by the bill resulted in over 250,000 new jobs.(3) A second measure of the Bill’s impact was the fact that all universities involved in research today have a formal Office of Technology Management which oversees research related patents. In 1979, their trade association, the Association of University Technology Managers, had 113 members nationwide.(4) By the dawn of the new millennium, that number had swelled to 2,178.(5)

Of course, over time, it became clear that the legislation did have some unintended consequences. The licensing bounty for industry and academics was not insignificant.(6) It rapidly grew from just over $7 million in 1981 to $3.4 billion by 2008. And major pharmaceutical companies were at the top of the food chain. Over the first three decades with the Bayh-Dole Act in place, 154 new drugs were approved by the FDA with worldwide sales attributed to these products of $103 billion.

This led The Economist, in 2005, to headline their reappraisal of the Bill, “Bayhing for blood or Doling out cash?”(7) As the article states, “Many scientists, economists and lawyers believe the act distorts the mission of universities, diverting them from the pursuit of basic knowledge, which is freely disseminated, to a focused search for results that have practical and industrial purposes. Whether that is a bad thing is a matter of debate. What is not in dispute is that it makes American academic institutions behave more like businesses than neutral arbiters of truth… Researchers (and particularly their minders in university patent-licensing offices) are increasingly reluctant to share materials and knowledge with others unless such sharing is accompanied by legal agreements about ‘reach-through’ royalties on potential findings and the right to restrict publication of results.”

In the end, national competitiveness in the global economy had won out. Or as one critical review put it, “some critics have asserted that universities are only interested in the financial gain that can result from licensing technologies and ignore social considerations. It’s important to remember that Bayh-Dole was passed for economic development reasons, and as we have shown above, it has admirably fulfilled this mission.”(8)

As for Ted Kennedy, in the early stages of the Bill’s formulation, Bayh and Dole had decided strategically to limit the bill to universities and small companies. But at the time they originally presented their draft they were not certain that they would have the support necessary to advance the legislation. But the following day, Bayh’s staff received two independent calls from two senators’ offices offering to co-sponsor the Bill. One came from Strom Thurmond (R-SC) and the other from Ted Kennedy (D-MA). As time would tell, the legislation would help give birth to the vibrant Rt. 128 biotechnology corridor in Massachusetts. On receiving the calls, Bayh’s chief of staff ran to the the Senate chamber to give his boss the good news. On receipt, Birch Bayh, peering over his reading glasses, wryly asked, “Are you sure this bill is OK?”(9)

In the political science of health care, the checks and balances of negative feedback loops are rapidly being replaced by positive feedback loops in the name of scientific progress and efficiency. And yet Americans pay more and get less in health than nearly all developed nations for all this “progress”. Integration and cooperation in the Medical-Industrial Complex is human mediated and profit driven. It has absolutely nothing to do with sound health system design, or rational and equitably delivery of population health. Kite Pharma’s corporate partnership with the National Cancer Institute, or Robert Califf’s former consultancy, funding, and financial relationships with Amylin, Lilly, Bristol-Myers Squibb, Janssen, Merck, Novartis Amgen, Bayer Healthcare, BMEB Services, Genentech, GlaxoSmithKline, Heart.org–Daiichi Sankyo, Kowa, Servier, Medscape/Heart.org, Regado, oche, N30 Pharma and Portola may yield profitable progress in science for investors. But this in no way assures, as we have seen over the past three decades in the U.S., that our human population will progress in tandem.

References on Request.

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Return to:

Part I: How Did We Arrive At This Place?

Part II. The Loss of Checks and Balances

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