March-in rights

Who knew?... Apparently the federal government has some rights to the intellectual property developed from publicly funded research:

Here's how it works. When the federal government — through an agency like the National Institutes of Health — pays for medical research that leads to an invention that can be patented, federal law gives the government a license to use that intellectual property.

According to the NPR story,  Rep. Lloyd Doggett of Texas has requested the U.S. exercise these rights to decrease drug prices. Not only has NIH refused to do so, they've also refused to hold hearings. Supposedly one reason is fear that:

... lower prices could also make drug companies less eager to invest lots of money in new medications.

...

"Perhaps we as a country would rather have lower drug prices and a little less innovation," Ellison said.

Stupid argument. Right now, big pharma uses their huge treasuries to strong arm competition out of the market - they lobby for trade agreements that protect their intellectual property and regulations that keep smaller firms out of the market. If big pharma decides to not invest in research, this opens business opportunities for small firms. So not only would drug prices come down due to competition from government licensed production, they would likely be more competition from newly invented products.

Transparency of information is good economics. Even as little as permitting more than one institution (a pharma and the government) to make use of it has the potential to improve the market for consumers.

BTW, taxpayers paid for the research on drugs under discussion. Right now, taxpayers pay to invent the drugs (researchers earn a living) and taxpayers pay to buy the drugs (big pharma makes astronomical profits). My preference would be to give the inventors a significant bonus and allow any pharma to produce and sell it under safe conditions. The drug information is freely available to all taxpayers and the drugs are available at very competitive prices.


Update: NPR story suggests U.S. government buy a drug company to lower drug price. Effectively, this is another way for the public to buy intellectual property. Owning the rights to a drug allows makers to control how much they can charge - it's a monopoly on that item. These two stories are varients of transfering intellectual property from private control to public control - increasing transparency.