PAPER CUTS: The Golden Fleece

Bob Dole may not have made it to the White House, but before he left Washington for the greener pastures of Comedy Central and Viagra endorsements, he left us a lasting legacy. Before he exited Washington, Bob Dole set the stage for the current healthcare crisis.

The Pandora's Box Dole bequeathed to us is the Bayh-Dole Act, a law which has engorged the coffers of pharmaceutical corporations, at taxpayer expense.

Prior to the passage of the Bayh-Dole Act, patent laws strictly separated academic research from corporate profit. If a scientist took even one dime of money from the government, then the rights to his or her discovery remained in the public domain. In the mid 1970s, with the economy in a slump, and the U.S. trailing Japan in the technology revolution, corporations began lobbying for changes in the patent laws, changes that would hasten the transfer of technologies from the public to the private sectors.

In 1980, Bob Dole co-sponsored a bill that gave private industry exclusive licensing rights to any promising discoveries arising from federally funded research. In Congressional hearings on the bill, then Commerce Secretary Phillip Klutznick remarked that the bill was akin to "using tax money to pay a contractor to build a road and then allowing the contractor to charge an additional toll to those who travel the road."

Admiral Hyman Rickover added his objections, testifying that rather than serving the public interest, the bill would: "throttle technological development, hurt small business, stifle competition, and cost the taxpayer plenty while promoting 'greater concentration of economic power in the hands of large corporations'."

Nevertheless, Bayh-Dole was enacted in October 1980, and thenceforth, the fruits of academic research passed from taxpayer funded laboratories directly to the wallets of the pharmaceutical manufacturers.

The icing on the cake was augmentation of Bayh-Dole with the Federal Technology Transfer Act of 1986. This law allows government researchers at federal laboratories like the National Institutes of Health (NIH) to cut deals with biotech and pharmaceutical firms, known as Cooperative Research and Development Agreements, effectively privatizing all federally funded research.

All agreements made under the Bayh-Dole Act are secret. Here's one that was made public only when it was nipped in the bud by the NIH. In 1992, Scripps Research Institute, of La Jolla California, a facility which receives $100 million annually from the NIH, made a deal with Sandoz, the Swiss pharmceutical firm. Sandoz would pay Scripps $300 million over 10 years, in return for exclusive rights to all discoveries made by Scripps.

Al Gore, who chaired the 198l hearings of the Congressional subcommittee on Oversight and Investigation, of the House Committee on Science and Technology, viewed technology transfer as "a free lunch for private corporations, enabling them to own the rights to breakthrough discoveries emanating from academic labs, without paying the salaries of scientists, graduate students, and postdocs, and other overhead costs like buildings, support staffs, and libraries. 'These agreements allow companies to skim the cream produced by decades of taxpayer funded work, blurring the distinctions between property and proprietary interests'."

What does this mean to consumers? It means that therapeutic agents whose research and development was already paid for by the American taxpayer, will be charged back to you at the drug store, at considerable markup. Of the 21 drugs introduced between 1965 and 1992 that are considered by experts to have had the highest therapeutic impact on society, publicly funded research was instrumental in the development of 71 percent. Three of these drugs, Capoten, Prozac, and Zovirax posted sales of more than than $1 billion in sales in 1994 and 1995 alone.