By
Paul R. Michel
June 2, 2020 at 5:00 am ET
People understand modern medicine can prevent, treat and even cure many diseases. What many may not realize, however, is that cures for most diseases still elude us. That can soon change because breakthroughs in gene therapy, personalized medicines and immunotherapies are now in sight. But progress and its pace depend on the strength of our integrated innovation system, which requires a strong patent system and includes roles for the federal government, academia and the private sector.
Although science is the vehicle, funding is the fuel, and specialization of roles is what makes it all work together. Research universities perform basic research, their specialty, but private companies develop the actual drugs and medical devices that implement the upstream research. Only industry has the means to perfect, manufacture at scale and distribute them.
Congress provides the taxpayer money for universities’ upstream research, primarily through the National Institutes of Health. Converting that research into commercial products, however, takes many time the amounts government can provide. That downstream work is funded by private investments which only flow if incentives are sufficient.
Medical advances are very slow, expensive and risky, for most attempts fail in the lab, and most of the remaining candidates fail in clinical trials. Of what remains, many fail to get Food and Drug Administration approval. The investments must cover many millions of dollars in direct costs and overall several billions of dollars for each commercially successful therapy. That reflects the reality that the few successes must pay for the many failures.
What it takes to make investments by venture capitalists and CEOs alike attractive enough is mainly legal protections that assure the overall cost is covered and some profit remains. Intellectual property, especially patents, provide the necessary protection. They block competitors from using the innovator’s technology without having borne the high costs of its development.
Limiting the protection therefore limits the pace of progress by discouraging investment. Unfortunately, the Supreme Court, through a series of decisions in recent years, has imposed such limits on patent protections. For example, eight years ago, the Court ruled that diagnostic methods are no longer eligible for patenting. It also made it more difficult for patent holders to get court orders blocking copying by infringers.
As a retired chief judge of the nation’s patent appeals court, I watched such Supreme Court interventions with growing dismay. The nation needs faster, not slower, medical progress, and patents are vital to accelerating drug development and production. Besides, national innovation policy should not be made by unelected judges without expertise in innovation economics, but by Congress, which can hold hearings, commission studies and otherwise learn from experts.
For decades, however, Congress controlled innovation policy and helped to accelerate advances. For example, it passed the bipartisan Bayh-Dole Act in 1980, allowing universities to patent discoveries funded by public money in order to attract the private investments needed to convert them into products like drugs that are actually available in stores. This one act has propelled great advances over its 40-year history and remains a key part of our innovation system. Ironically, when we need it more than ever to help incentivize the development of treatments for the coronavirus, some now call for it to be undermined.
Another congressional innovation boost came with passage of the bipartisan Hatch-Waxman Act in 1984. It streamlined drug disputes and made generics available sooner and in more cases.
Finally, Congress created the specialized patent appeals court on which I served until retiring in 2010. It brought clarity and reliability to patent law, at least until the Supreme Court stepped in and began revising the law.
If the nation wants to be prepared for the next pandemic, innovation law, including patent law, must be strengthened — and soon. It is high time for Congress to reassert its rightful role in innovation policy and ensure that patents keep their place as a driver of medical innovation.
The Honorable Paul R. Michel served as chief judge of the U.S. Court of Appeals for the Federal Circuit from 2004 to 2010 and was first appointed to the U.S. Court of Appeals by President Ronald Reagan in 1988
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