Podcast: Life Sciences Innovation Through the Bayh-Dole Act, With Joe Allen
Innovation in life sciences is crucial for many key industries in the United States and across the globe. It supports advances in human biotechnology, pharmaceuticals, health care policy, and beyond. Such advances would not always have been possible without the Bayh-Dole Act. Rob and Jackie sat down with Joe Allen, who served as a professional staffer on the U.S. Senate Judiciary Committee to former Senator Birch Bayh, to discuss the importance of the Bayh-Dole Act and the future of life sciences innovation.
- Stephen Ezell, “The Bayh-Dole Act’s Vital Importance to the U.S. Life-Sciences Innovation System”(ITIF, March 2019).
- “Preserving Bayh-Dole—the “Inspired” Law That Underpins U.S. Leadership in Life-Sciences Innovation” (ITIF Event, March 2019).
- Stephen Ezell, “How Japan Squandered Its Biopharmaceutical Competitiveness: A Cautionary Tale” (ITIF, July 2022).
Rob Atkinson: Welcome to Innovation Files. I’m Rob Atkinson, founder, and president of the Information Technology and Innovation Foundation.
Jackie Whisman: I’m Jackie Whisman. I head development at ITIF, which I’m proud to say is the world’s top ranked think tank for science and technology policy.
Rob Atkinson: This podcast is about the kinds of issues we cover at ITIF, from the broad economics of innovation to specific policy and regulatory questions about new technologies.
Today, we’re going to talk about life sciences innovation and in particular, how a piece of legislation called the Bayh-Dole Act has been vitally important to life sciences innovation in the US and frankly, technological innovation and tech transfer overall.
Jackie Whisman: Our guest is Joe Allen. He served as a professional staffer on the US Senate Judiciary Committee, to former Senator Birch Bayh. He played a key part in the successful passage of the landmark Bayh-Dole Act of 1980 and its subsequent amendments. The legislation was hailed by The Economist Technology Quarterly, as possibly the most inspired piece of legislation to be enacted in America over the past half century. More than anything, this single policy measure helped to reverse America’s precipitous slide into industrial irrelevance. He has more than 25 years of experience in technology management and founded Allen & Associates, to guide clients in that area, in 2007. Welcome.
Rob Atkinson: The most important part is that Joe was my first boss out of graduate school. I had the pleasure of working with Joe and learning a lot from Joe, when I was at the technology administration in the Department of Commerce. By the way, an administration that is now defunct, unfortunately and should be restored.
Joe Allen: But not because of us.
Rob Atkinson: No, no, we didn’t drive it into the ground. It was somebody else that took it away.
Joe Allen: It was actually both of us left, it went under the ground, but that’s another story.
Rob Atkinson: Another story.
Joe Allen: Exactly.
Jackie Whisman: In 2002, The Economist called the Bayh-Dole Act, perhaps the most inspired piece of legislation to be introduced in America over the past quarter century. Can you explain why senators Bayh and Bob Dole, a Democrat and a Republican introduced and helped pass the act? Why is it so important and what has it accomplished?
Joe Allen: Well, I’m happy to do that. First of all, thank you very much for having me on. ITIF is one of my favorite organizations. You guys do a fantastic job, and you really document what you’re talking about. It’s great to have opinions about things, but you all are fact based. I think that’s one thing that we certainly need in this current environment.
To answer your question, I was on the staff with Senator Bayh. He sat on judiciary committee. Going into the election of 1980, which is a long, long time ago now, it was very much like the current environment. I mean, the economy was falling apart. We had double digit inflation. Right now, we’ve got 8.5%. We were way above that. We had double digit unemployment. And even worse, the US was losing its position internationally and in new technologies. Japan and Germany were taking away markets we used to dominate.
Senator Bayh was a liberal Democrat. Senator Dole was conservative Republican. They didn’t agree about very much, but we started looking into this issue, when we found out to our amazement, that the US government at that time, was funding about 50% of all the R&D in the country. Virtually nothing was being commercialized.
Bayh and Dole looked at that and said, this is crazy. I mean, how can we afford to have the taxpayer funding billions and billions of dollars of research and nothing’s coming out the other end? We started looking into it. We realized that the problem was, that back to World War II, the government had a policy that if it funded even a small percentage of the research, if you made an invention, the invention was taken away from you and then put in the public domain, for free.
Which sounds like a great idea, but the problem is, the government’s not funding products. So someone, an industry’s got to take a huge amount of risk and a lot of time, to turn a laboratory idea into a useful product. They’re simply not going to do that if in fact, you can’t protect the investment. It’s basic economics. Although, a lot of people today, apparently don’t know anything about basic economics, because a lot of people want to return us to those days. So we looked into that. Senator Bayh asked me to investigate it. I found, actually the situation was even worse than we thought. Not a single new drug had ever been commercialized from National Institutes of Health research, when they took the invention away.
Now think about that for a minute. Billions of dollars, critical research, people dying, and things are not being commercialized because we’d broken the link between the public and private sector. We found there were 28,000 inventions the government had stockpiled in Washington. Virtually nothing was being commercialized. What the Bayh-Dole Act did was, it reversed 40 years of policy. It said, if a small company or a university makes an invention with government research, they can own it.
The government can use it for free, but we put incentives in there. We restored the incentives of the patent system, so that people could actually license the technology to a company. We said we want to license to small companies, preferably and people will make it in the United States. We said universities have to reward their inventors. And if they make money back through royalties when we commercialize their product, that money goes back to more research.
So, it was just a complete reversal. It was actually Jeffersonian. We had put incentives back in the system. We set up a couple rules and got the bureaucracy out of the way. What happened was, almost at the same time, we had the biotechnology revolution coming out of University of California at Stanford. Because of Bayh-Dole, universities own their inventions.You would think that you would have big drug companies jumping in to buy this new, emerging technology. That didn’t happen at all. In fact, it hardly ever happens when you have a new technology.
It’s the small companies. They spun off companies like Genentech. The US went from number three in biotech, behind Japan and the UK, to the world leader. We’re still the world leader. The reason you had people like The Economist look at that was, in 1980, it looked like the Japanese... Rob and I were the department of commerce, as we said to open this. Secretary Baldridge was over in Japan one night, I think drinking sake was some of his Japanese counterparts. The Japanese said, “Listen, why don’t you guys do what you’re really good at? Why don’t you get into agriculture and service industries and leave high tech to us?” Well, that just sent Baldridge to the roof, but that’s where people thought we were going.
Well because of Bayh-Dole, we created public-private partnerships, where companies are taking a huge risk, but it turned our economy around. In fact, one more commerce story. When Rob and I were commerce, we had a classified... This is after Bayh-Dole passed, but it took a couple years for Bayh-Dole to kick in. In fact, one thing we’ll talk about later is, companies just didn’t trust government as a partner. We had to spend a couple years actually showing that Bayh-Dole was trustworthy. We’re not going to change the rules. You can license the technology and commercialize it.
We had a classified briefing from the CIA. This is probably about 1982. There were 10 key technologies in the world. The Japanese and the Germans had four of them. The CIA told us in a classified briefing, that they expected we’d lose four more in the next couple years. What happened? Not only did we not lose those four, we recovered our lead in all 10 because of these public-private sector partnerships.
Bayh-Dole has become a best practice in the world. South Africa’s adopted it. Japan’s adopted it. A lot of countries have adopted it. But unfortunately, we’ve forgotten in the United States, what it does. It’s under a lot of attack now. So even though it’s working every day of the year, a lot of people are back to this idea that we should give our technologies away for free, that that would be more fair and some magic fairy dust is going to turn them into products. Unfortunately, that’s just not how the world works.
Rob Atkinson: First of all, Joe, it’s a great overview of that history, which you were right at the center of.
It reminds me of a story, a meeting I had, maybe 10 years ago, with a Russian government official who was involved with trying to get the Russian economy and technology going. We were talking about this. He said, “In Russia, when a university comes up with a great invention, the intellectual property is owned by Moscow, owned by the central government.” I said, “Well, really? What happens?”
He goes, “Oh, nothing. Why would we do anything then? Because we’re not going to get anything for it. So, we just do other things,” because there’s absolutely zero incentive for a Russian university to do anything. That was a great story.
Joe Allen: Just to add to that, I’d never heard that story before, but a friend of mine who actually went to Russia to advise him on adopting a by Bayh-Dole Act. He came back and I said, “Well, what happened?” He said, “It’ll never work there.” He said, “It’s too corrupt.” Because for Bayh-Dole to work, you have to honor contracts. You have to have a strong patent system. You have to get the government out of the way.
If you’re going to have people playing games behind the scenes, with oligarchs taking stuff that they want, Bayh-Dole doesn’t work there. China has one too. We’ll see how it works in China. They at least have more economic freedom. But you just had President Xi, who will apparently be president forever, is now turning on entrepreneurs.
One of the problems is, for a autocratic government and a corrupt government, Bayh-Dole’s not going to work. For a country that’s actually going to be decentralized and democratic and have the rule of law, it does work. But even then, it’s really hard. That’s a great point because the Bayh-Dole model has to have some nourishment. It can’t just be plopped down anywhere, with an autocratic government and think you’re going to get entrepreneurship. It doesn’t work that way.
Rob Atkinson: The other thing, Joe, you mentioned, you mentioned more of a decentralized, democratic model. Again, you and I were both involved in that.
In fact, the reason I came to commerce, the technology administration, was because Congress had passed in ‘88, the Omnibus Trade and Competitiveness Act, created this Clearinghouse on State and Local initiatives on productivity, Technology and Innovation. The longest program title of all time.
I was honored to be able to run that program. But what was interesting about that time, is it was somewhat near when Bayh-Dole... six to eight years later. A lot of states really ramped up their own technology commercialization programs, to piggyback on Bayh-Dole seed funds, incubators, university tech transfer centers.
I mean, really, it was a nice combination of things, the federal government taking these barriers away and then states stepping in and really, really helping to drive it. Can you say a little bit more about that?
Joe Allen: That’s a great point. A lot of states don’t really know much about Bayh-Dole, but if you went back before 1980, you didn’t have companies spinning out of universities like they do now. Now, you had some, like MIT, but not anything like it’s going on now. You actually have companies from around the world, coming to the US, to buy these innovation centers because we’ve turned the universities loose.
It’s not just necessarily, the top tier, big name universities. It’s happening all across the country. So one of the great things about Bayh-Dole is, it’s flowered there and it’s decentralized technology. One of the big things that I remember that Bayh-Dole... The other idea from Bayh-Dole was industrial policy. When we passed Bayh-Dole, it looked like Japan Inc. was going to conquer the world.
The Japan Inc. model is just the opposite of Bayh-Dole. It’s big business and big government getting together, to boldly plot the future. I remember one of the people that really took off was the University of Utah. It became a life science center. Well, no central planner in Washington ever would’ve picked Salt Lake city, Utah as a life science center. I mean, you never would’ve done that.
Now what happened was, when you got the government out of the way, you had great technologies here. You had entrepreneurial leaders. You had a state supporting it. Now, if you look at what’s going on around the country, virtually every state’s university is going to have economic growth around it, startup companies around it, companies actually moving there. In fact, most of the startup companies that are launched from universities, actually stay in the state.
So, it’s one of the big drivers of our economy now. But if you went back before 1980, that just wasn’t true. In fact, the last thing you wanted to do if you were a company, was work with the university before Bayh-Dole, because if there was something invented, the government would take it away from you. So, as I mentioned earlier, it took us a couple years, really. The biotech technology boom really made companies comfortable that the Bayh-Dole rules wouldn’t be changed on them, once they committed to it. But that’s one of the reasons why the US economy has become the most competitive in the world now.
Now, we have some other issues to look at, but one thing you don’t want to undo is our decentralized technology management. The final thing I’ll say is, a lot of times when these technologies come out, it’s not obvious what the application’s going to be. If you look at mRNA, it took 10 years of our university scientists, to figure out how mRNA was going to be applied to humans.
Now, actually, the woman at University of Pennsylvania who did that work, was actually downgraded on campus because it looked like her research was going nowhere. That’s one of the keys for COVID-19 vaccines. A lot of public scientists will take huge risk with their lives and their careers, to basically bring technologies out because they believe in them, because they have an ownership incentive that they wouldn’t have had before Bayh-Dole.
It’s almost like the adverse of your Russia example. If the government’s going to take it away from, you’re not going to spend 10 years of your life working on something that’s going to be taken away from you.
Rob Atkinson: When I was doing this for the governor of Rhode Island and then also at commerce there was a great line. People would say, “Well, how did your faculty start to get more interested in entrepreneurship and spinning off companies and licensing?” When we saw the first professor who did it drive up in his Porsche. In other words, incentives matter.
I know Jackie has a question, but one last point I’ll just make. Just to be clear, because you know this Joe, but maybe the listeners don’t. This is not just about the life sciences entry, as important as that is. This is mechanical engineering. This is all over the place and as you noted, all parts of the country are benefiting from this.
Joe Allen: Right. In fact, Google came out of Bayh-Dole. Just, if you’ll indulge me in a quick story, Kathy Koo at Stanford University was talking about this. You had a couple students that got some National Science Foundation funding to do some research. They came into Stanford with an invention, and no one cared about it. It was a search engine. Who needs a search engine? We’ve got search engines. They couldn’t find a single licensee. No company wanted anything to do with it.
So these two kids came in from the dormitory, to Stanford University’s Tech Transfer Office, said, “Hey, we’d like to start a company. Could we get a license?” Stanford said, “Sure,” but they thought so little of it, they didn’t even take equity in the company. That company turned out to be Google. So again, that’s how our system works. If it wasn’t for two kids in the dormitory... There already were search engines. What’s so what’s so different about this one? So you can’t tell what’s going to come out of this research. That’s why you give the incentives to the inventors.
Most times, it’s not going to work. I mean, for every Google example, there’s 10,000 others, that people tried really hard and failed. But that’s the genius of our system. In a decentralized system, when you try and fail, you learn from that and go on. In a centralized system, when you try and fail, it’s catastrophic. I think that’s one thing people lose track of, this Washington knows best idea. It’s really, really hard for the smartest people in venture funding to pick a good technology out of the pile when it first starts.
Not many people can do that, because it’s too unpredictable. But a decentralized system runs rings around a centralized system because again, if it fails it, you don’t lose the whole system. You learn from that and you go on.A lot of VCs won’t even fund you unless you’ve failed before.
Rob Atkinson: I got to say one last story here, before. I was in Japan a number of years ago. I was giving a presentation to 20 or 30 CEOs, on technology and what the US model was. I happened to mention that my son was planning to go into computer science, which he actually is now. He’s at a startup-y kind of company, in the valley. He’s doing quite well. He’s enjoying it. But I said that one of the things he wants to do with his life, is hopefully to work with a startup.
A gentleman raised his hand. He goes, “Can I ask you a personal question?” I said, “Sure.” He goes, “How would you feel if your son’s startup failed?” I said, “I’d feel fine. He would’ve learned something, and he would’ve gained valuable experience. Hopefully his next one would take off and he’d make a lot of money and hopefully he would give me some.” I said, “I would be super happy.”
I don’t think my son’s going to give me anything, but leaving that aside, I said, “How would you feel if your son did that?” He goes, “Oh, no. That would be the end. He would be off the train. Once you fail, you’re done.” I thought, wow, that’s a big difference.
Joe Allen: It is. That’s one of the reasons why Japan was great at copying us. But when they sort of tied us, they don’t have that entrepreneurial culture. Not that they’re not smart, but if failure is a stigma, you’re not going to be good at entrepreneurship, because most entrepreneurs have failed many more times than they succeeded. They just get up and dust themselves off again.
But again, in societies like that, which goes back to tradition, if you lose face and you fail and that’s a bad thing, entrepreneurship is not for you.
Look at where the Japanese economy has been for the last 40 years. I mean, they had a real estate bubble. When that burst, they’re certainly still a wealthy country, but nothing like they were in the 1970s, when they looked like they were going to take over the world.
But they’re like China. They were copying us. It’s great to copy the other person because that way, you know where you’re going. But when you get to the front of the train, it’s not quite so easy to figure out which track to go down next. That’s really why our system runs rings around theirs.
But unfortunately, right now, we have a lot of people that are looking to undo our system, for a more centralized approach. We spend a lot of our time trying to say people, we’ve been down that road before and it doesn’t go to a good place.
Jackie Whisman: Some have called for the use of Bayh-Dole’s March-In Rights to control US drug pricing. Can you explain what this term means and what Congress intended them for?
Joe Allen: Yeah. That’s a key because the people that are calling for that, are the same people that tried Bayh-Dole. These are the people who want to return us to the pre-Bayh-Dole era, where if the government funds something, then either they can give it away or micromanage it.
So basically, when we passed Bayh-Dole... and actually this goes back even before Bayh-Dole, even before they... When they took your inventions away, President Kennedy and President Nixon realized that, that system wasn’t working. So, they started having a waiver process, where you could have petitioned the government before Bayh-Dole, to get rights to invention you made.
The odds were against you. But if you got them, the government would say, okay, you have to bring this to practical application. You have to try to develop it. If you don’t do that, the government can march in and license somebody else. So, that’s what March-In Rights came from.
Bayh-Dole has the same thing. We allowed universities to own their inventions. We allowed small companies to own it, but we also said, you have to be making a good faith effort to commercialize the technology. That’s the purpose of Bayh-Dole. Get these things out of the laboratory, make them into something, if you can.
Bayh-Dole has four March-In rights. The first one is, if in a reasonable time, you haven’t brought it to practical application, you’ve made it into a product, then you can petition the government and they can license it other companies.
The other ones are, if in fact you have made it, but there’s a national emergency, like COVID-19, you got a small company, you got a vaccine, but you can’t produce enough, the government can march in to license more. So, that’s how March-In Rights worked for the first 20 years of Bayh-Dole.
20 years after we passed Bayh-Dole, a couple professors came up with this theory that they’d found a hidden meaning in Bayh-Dole, that Bayh-Dole allowed the government to control prices, if they weren’t reasonable.
I came out of Loyola University Law Review a friend of mine, Norm Latker, who did a lot of work on Bayh-Dole, former NIH patent council, sent me the law review article. It was like 30 pages long. I literally laughed because first of all, the theory was so preposterous. The second thing was, these people didn’t quote the Bayh-Dole hearings. They quoted other hearings or people opposed to Bayh-Dole, to build their theory. I said, “Okay. You can publish whatever you want to, apparently. Who cares?” But then a couple months later, they got an op-ed in the Washington Post, called Paying Twice for the Same Drugs.
Now, this is 2000. I was long gone from Senator Bayh’s office. Senator Bayh was out of office. He was at a law firm. I called him. I said, “Senator, this is serious. I mean, this is a complete misrepresentation.” This takes decentralization and turns it on its head.
So that if you commercialize something... and there’s of course, no definition of a reasonable price in the law, because that’s not the way ever have in mind, you can petition the government saying, “Hey, I don’t think Rob is selling this at a reasonable price.” And if some bureaucrat agrees, you can then license other people to copy the invention. So, it would kill Bayh-Dole.
So anyway, Senator Bayh agreed with me. He got ahold of Senator Dole, who was at another law firm. We tried to write an op-ed to oppose the first op-ed, the Post wouldn’t give us an op-ed. They would just give us a letter to the editor, which is much, much shorter, but you got to work with what you’ve got. So immediately, Bayh and Dole came back and said, that’s not the way the law works.
Anyway, the same people that came up with this theory, since 2000, have sent a series of March-In petitions, mainly National Institutes of Health, for drugs and said, “We don’t think this drug is reasonably priced.”
They’ve all been dismissed because NIH, under Democratic and Republican administrations, has looked at the law, said price control is not how Bayh-Dole works. Nevertheless, it kept filing those over and over again.
In fact, the most petition were rejected in the Obama-Biden administration. Three times, they went after the drug XTANDI, which is a prostate cancer drug. Three times under Obama-Biden, it was dismissed. They’ve refiled that petition again. They’ve got a hundred members of Congress now, urging Biden, beating on Biden saying, “You’ve got to March-In to control this drug price.”
Again, it’s not supported by the statute. But the final thing is, it would kill Bayh-Dole, because what company, what VC is going to start a new company...
You come up with a product. It doesn’t have to be a drug. It could be anything. It could be a new tomato, whatever.
Your brother-in-law, who doesn’t like you or a foreign company or a rival says, “Hey, we don’t think this honey crisp apple should be cheaper.” Honey crisp apples came out of Bayh-Dole. “We don’t think this is a reasonable price. The government should march in and let other people copy it.”
There’s no definition of a reasonable price. It’s just made up out of thin air. It’s not how the law works, but it would kill Bayh-Dole because all the certainty is gone.
70% of inventions under Bayh-Dole go to small companies, who are betting the farm on this one technology.
The Biden administration is weighing this right now, but it goes back to what we were first saying about Russia. When you have a country that will suddenly change the rules for their own convenience, you destroy all the incentives and you destroy the predictability.
Companies are funding huge amounts of money and risk in commercializing technology. Most times they don’t work. And if you’re going to say, when they finally do work, anybody can go to the government and say, “We don’t like your price. The government should basically license your competitors,” the bottom would fall out of our system. So, it’s a very serious threat.
Again, I think the good news is, every administration that’s looked at this for the last 18 years has said, no, that’s not how the law works.
But again, there’s a lot of political pressure being put on the Biden administration right now, to say, “Hey, you need to do this. It’ll control drug prices.”
But it’s not going to control drug prices. What it’s going to do, it’s going to collapse innovation.
I run the thing called the Bayh-Dole Coalition, which ITIF is a member of. We did a webinar on this. One of the venture capital people said, “If you ever misuse March-In rights, venture funding is going to go off a cliff. We’re out of here. We’re not funding this anymore because it would be insane.”
You could never make sure that investment’s going to be protected because if somebody doesn’t like your price, they can file the same March-In petition.
Who knows? The department of agriculture may license your rival to copy what you did, to make the price cheaper.
Rob Atkinson: Joe, when I started ITIF, if I knew that I would have to take all of my reports and give them to Brookings, for Brookings to publish under their name, I wouldn’t have done it.
We need to wrap up, but I do want to say, and then ask you one thing. Which is, I think people make a mistake when they look at this debate, because they’re thinking these people are arguing in good faith and on the merit.
What I see these folks doing, in this case, fairly hardcore progressive left, to them, this is a two-for. They want drug price controls, even though all the evidence, scholarly evidence shows that that would hinder new drug development, critical for patients, particularly our kids, as they get older.
But secondly, they want to get rid of Bayh-Dole. They simply do not think that it’s appropriate for industries to be involved in any way, shape or form, with the sanctity and purity of university research.
So for them, this is a win-win. This will be great. Get rid of Bayh-Dole and do drug pricing controls, even though it’s going to harm innovation.
Joe Allen: I think that’s an excellent point. It’s really an attack on the patent system. That’s what really irritates them. Remember, the intellectual property system is in the Constitution, before the Bill of Rights. The founding father saw that as so critical to developing this country, that you could own physical property and your ideas. They think that intellectual property should be in the public domain. Everyone should have access to it. It’s Animal Farm economics.
If you ever read Animal Farm, which I’m sure in college, they don’t read Animal Farm anymore, obviously for the people they’re turning out there. If you doubt that, look at how many new drugs come out of socialist countries. The answer is very simple, zero. It doesn’t work.
Our whole system is built by providing ownership and predictability, that you can protect what you own and build on it and borrow against it. The odds are, you’re going to lose, but that’s that’s what the fight is really about. In fact, you may remember some of our prominent politicians said before, “You didn’t create that. Everyone created that.”
Well, the fact is, everyone didn’t spend 10 years of their lives and mortgage their house and went without a paycheck, trying to get this thing to work. So, if you’re going to say, “Okay, Rob, yeah, you did all that, but now we’re going to take it away from you,” you’re right back to the Soviet system, which is basically, if you’re too successful... or like China. You’re an entrepreneur. We like that. We’re just going to take it away from you now.
Again, once you lose that confidence, you don’t get it back again. That’s the danger of this. Once you show that the rules aren’t really rules, that if we want Cleveland to win, then suddenly the strike zone gets bigger or smaller or whatever you’re going to do and the umpire is really not impartial, they’re really rooting for one team or the other, that destroys our whole economy.
The final thing is, our economy’s still driven by small companies. It’s these entrepreneurs, like the two kids in the dormitory that started Google. Now, they’re better than entrepreneurs now, but almost all these companies started with somebody like that. Like Jim Allison, who did immunotherapy.
He was ridiculed on campus. He was ostracized, but he wouldn’t give up on the idea, and it turns out that he changed medicine. He won the Nobel Prize, but he went through 10 years of hell to get there. Most people won’t go through 10 years of rejection. I don’t think Jim Allison... like your example about ITF, if that was going to be taken away from him and everyone’s succeeded in this, not just Jim Allison, our system is not going to work on that.
People are not stupid. They’re not going to do things if everyone else is going to jump in and take it away. We got to keep making this argument because unfortunately, a lot of people in this country don’t make things anymore. It’s magic to them, that these things suddenly show up in the market. People are always susceptible to think, hey, you’re being cheated. If somebody commercializes a government technology, you’ve been cheated.
Well, you’re not being cheated. The government doesn’t make products. These companies are taking a huge risk and when they don’t work, no one pays them back. People lose their jobs. You go bankrupt. Bad things happen in the private sector, when you take a risk and fail. But genius of our system is, it provides incentives for people to go ahead and do that anyway. Frankly, that’s the only way we’re going to compete with China, is actually to out-innovate them and not undermine our own system.
Rob Atkinson: People haven’t seen the movie about Allison, it’s a great, great movie. I think it’s on Netflix. It’s really worth watching. I have a very close relative of mine who is alive because of immunotherapy. He would be dead right now without that. That has cured him.
Joe, one of the other issues here, in fact it’s right in the news, is the Biden administration just supported a successful action at the WTO, where a bunch of developing countries said they needed to have all the vaccine technology and the IP given to them for free. What’s your thoughts on that?
Joe Allen: I’m appalled. Quite frankly, I mean, just go back and think two years ago, wasn’t that long ago, we didn’t have anything to fight COVID. You had Operation Warp Speed where companies, actually on a dime, changed their research priorities, stopped other projects that were going on, to try to develop a vaccine.
You had mRNA technologies, which came out of Bayh-Dole, worked with 10 years, but people didn’t know what the application was. Moderna didn’t make any money off of mRNA for 10 years, until Operation Warp Speed came. They agreed to partner with the government. And in months, as opposed to years, they came up with the most effective vaccines in the world.
The Biden administration came to office with these vaccines handed to them. In fact, President Biden and Vice President Harris were actually vaccinated under the Trump administration. So, you would think that of all the things that they would be appreciative of, it would be the people that made the vaccines.
Almost as soon as they came into office, they jumped onto this idea from the World Trade organization or its people behind it, developing countries, the patents were the reason that people couldn’t get vaccines. So, the Biden administration agreed with these efforts to give away our key technologies, mRNA, which is not just for vaccines. It’s actually for medicine.
Just as you said, two weeks ago, they’ve signed an agreement that basically developing countries, including China, can now take these technologies and even export them. The irony is, last week, the Wall Street Journal has an article, Millions of Vaccine Doses Tossed. Moderna had to get rid of 30 million vials of vaccine. They tried to give them to Africa, which is where this problem is supposed to be so acute. The Africans would not even take 30 million free doses.
They said, first of all, we can’t store them. Secondly, we don’t even have enough people trying to get vaccinated. So we’re giving away a key technology, under the pretext that it’s going to help get more vaccines out there.
Rob Atkinson: The other thing about that, Joe is, as you said, mRNA is a key foundational technology for the future of genetic and genomic medicine.
It’s not like they are giving away just the rights to make this particular. They’re giving away the intellectual property. So now, China has a huge leg up, that they wouldn’t have had before. So Joe, thank you so much. That was great.
Jackie Whisman: That’s it for this week. If you liked it, please be sure to rate us and subscribe. Feel free to email show ideas or questions to [email protected]. You can find the show notes and sign up for our weekly email newsletter on our website, ITIF.org. Follow us on Twitter, Facebook and LinkedIn @TIFDC.
Rob Atkinson: We have more episodes and great guests lined up. New episodes drop every other Monday. So, we hope you’ll continue to tune in.