- - Friday, June 12, 2020

Under the guise of coronavirus relief, a pair of Democratic lawmakers are trying to put the federal government in control of private drug companies.

Sen. Elizabeth Warren, Massachusetts Democrat, and Rep. Jan Schakowsky, Illinois Democrat, recently introduced the COVID-19 Emergency Manufacturing Act, which would authorize the government to invalidate the patents of those who have developed critical medicines and other medical supplies needed to fight the coronavirus outbreak — and allow the government to manufacture them.

The duo argues their plan will ensure an adequate supply of affordable treatments and essential medical supplies. But that’s hardly the case. Throughout the course of the pandemic, the federal government has shown that it’s incapable of quickly producing and distributing mass quantities of vital health supplies. Worse, empowering the federal government to seize private entities’ intellectual property (IP) could stifle medical progress for years to come.

The bill would create an Emergency Office of Manufacturing for Public Health with the power to issue “non-voluntary licenses” that force drug companies to hand over the intellectual property behind patent-protected drugs deemed necessary to combat the pandemic.

In theory, this would discourage drug companies from charging exorbitant prices for COVID-19 treatments. If they did, the government could simply march in, seize the IP behind the therapy or vaccine, and direct its manufacture, with the goal of selling it cheaply or even giving it away.



The government’s recent efforts to manufacture, distribute or even procure necessary medical supplies shouldn’t inspire much confidence. Consider the Centers for Disease Control and Prevention’s effort to develop a test for COVID-19. Despite plenty of warning, by the end of February, the CDC had distributed fewer than 4,000 of its 160,000 diagnostic tests. Those tests famously had serious design flaws, which the agency only fixed with the help of a private company.

In January, officials from the Department of Health and Human Services turned down an American medical supply manufacturer that offered to ramp up production of much-needed N-95 masks.

Even now, the Food and Drug Administration is taking its sweet time reviewing at-home COVID-19 tests, which has forced state and local leaders to put huge testing efforts on hold.

Putting the same federal bureaucracy that has repeatedly botched the nation’s response to the pandemic in charge of producing and distributing new COVID-19 treatments doesn’t make sense.

Worse still, empowering the federal government to break intellectual property rights on new medications would devastate drug development. It costs more than $2 billion and takes around 15 years to develop a single new drug. Fewer than 1-in-10 compounds that enter clinical trials end up garnering FDA approval.

Private companies fund these risky projects because a successful drug offers them an opportunity to earn a sizeable return on their investment, thanks to the period of exclusive sales a patent provides.

Dozens of private companies working on possible COVID-19 vaccines and therapies have been able to attract billions of dollars in investment because the potential payoff — for them and for humanity — would be huge.

That investment would vanish if Ms. Warren and Ms. Schakowsky were able to seize the patents behind whatever treatments emerge from this research race. By destroying the incentives to invest in drug research, their plan would push the development of an effective vaccine, therapy or even cure for COVID-19 further into the future — perhaps permanently.

Under normal circumstances, Ms. Warren and Ms. Schakowsky’s bill would be misguided. Amid the COVID-19 outbreak, it’s downright dangerous.

• Sally C. Pipes, president, CEO and Thomas W. Smith Fellow in Health Care Policy at the Pacific Research Institute, is the author most recently of “False Premise, False Promise: The Disastrous Reality of Medicare for All” (Encounter 2020). Follow her on Twitter @sallypipes.

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