Federal Research Changes Could Stifle Innovation in Georgia

Innovative breakthroughs have flowed from Georgia‘s esteemed research universities, such as the HIV drug Emtricitabine and advanced navigation gyroscopes for autonomous vehicles. However, a looming proposal from the Biden administration could jeopardize these kinds of technological advancements.

Last year, the National Institute of Standards and Technology (NIST) introduced a controversial proposal that would enable the federal government to rescind patent protections for federally funded products if they are deemed too costly. The administration claims this measure is aimed at fostering competition in healthcare and reducing prescription drug prices for families.

Critics argue that despite its good intentions, this proposal likely won’t lower drug prices—and it poses a real risk to innovation across various sectors. Historic changes, such as the Bayh-Dole Act, have allowed universities and small businesses to retain patent rights on inventions developed with federal support, spurring a massive economic boom.

Since its implementation, Bayh-Dole has been linked to a staggering $1.9 trillion in economic growth, the creation of 6.5 million jobs, and the establishment of over 17,000 startup companies—with many emerging from institutions in Georgia.

While Bayh-Dole does allow the government to re-license patented technologies in certain situations, it has never been utilized in practice. The term «march-in rights» has historically been reserved for exceptional cases. Notably, the authors of Bayh-Dole explicitly stated that price alone could not justify such measures.

Furthermore, the march-in mechanism applies solely to the patents on inventions developed with federal funding, not the final products. Recent studies highlight that a tiny fraction of FDA-approved drugs are even vulnerable to march-in rights, suggesting that most drugs would remain unaffected.

Bayh-Dole’s success lies in maintaining a balance between public funding for early-stage research and private-sector development, driving research across industries and attracting significant private investment.

If the proposed changes go through, this equilibrium may be disrupted, leading to investors shying away from federally supported innovations due to perceived risks. As someone who has worked closely with venture-backed startups, I have seen firsthand how long and difficult the path can be to bring university inventions to market.

With growing concerns about the administration’s proposal, a bipartisan group of 28 lawmakers recently reached out to President Biden to voice their apprehension. Only time will tell whether their voices will lead to a reconsideration of these potentially damaging changes.