Private industry investments in vaccine development have declined in recent decades.
Vaccine development is a very expensive and complicated process, and so investors naturally look to more certain profitable ventures.
The fact that we have not had a massive pandemic in decades has left private industry with little motivation to prepare for the next one.
Fortunately, while vaccine development dwindled in the private sector, the National Institutes of Health (NIH) and Defense Advance Research Project Agency stepped in to fill this gap.
The U.S. government has spent well over $18 billion in developing and purchasing COVID-19 vaccines. The NIH’s 2021 budget is $43 billion and is allocated for everything from cancer research to vaccine development.
For generations, the government has provided grants to researchers and universities in order to develop new technology that can pave the road for vaccine development and distribution, as well as other public health projects.
It is a misconception that the rapid development of COVID-19 vaccines happened in isolation. The concepts and processes go back decades and are the culmination of dozens of scientific breakthroughs.
The development of mRNA vaccines used by Pfizer and Moderna was dependent upon countless innovations, ranging from a better understanding of viruses to the actual mRNA technology.
The groundwork for developing mRNA vaccines was dependent upon the investment of a half a dozen presidential administrations prior to those of Trump and Biden.
The level of governmental investment in the COVID-19 vaccine development leaves many people asking, “Who owns the vaccine patents and who is profiting?”
One of the biggest critics of “Big Pharma” is Peter Maybarduk who has argued, “This is the people’s vaccine. Federal scientists helped invent it and taxpayers are funding its development. … It should belong to humanity.”
Others assert that the vaccine patents belong to their respective pharmaceutical companies because companies took great risks by investing millions and not all prospective COVID-19 vaccines have been successful.
While the federal government has invested billions in vaccine development over the last four decades, they do not own any of those patents or have a right to the profits generated by these products.
Why? Per the Bayh-Dole Act (The Patent and Trademark Law Amendment Act of 1980), the NIH is not entitled to revenue generated by vaccine patents.
The act enabled nonprofit organizations and small businesses to retain intellectual property rights for inventions that were developed with the aid of federally funded research programs.
While some question why the federal government would relinquish intellectual property rights for products it helped develop, it is important to know that even before the Bayh-Dole Act countless inventions went unused because developers did not receive the benefit of the patents.
By relinquishing these rights, Congress opened the door to encourage more product development and to ensure successful inventions would make it to the marketplace.
This type of public-private partnership is what has generated so many scientific advances in the last 50 years.
Since 1996, Bayh-Dole has helped to develop 100,000 academic patents, 420,000 inventions and has aided in developing over 200 drugs.
The act does place some limitations and obligations on private industry. The government does retain its right to step in if an inventor refuses to use the invention or release it to the marketplace.
Critics have always been concerned that Bayh-Dole does not have a requirement that the invention or product developed with federal funds be offered at a fair market price.
While this is a legitimate concern, pharmaceutical giants have not attempted to price gouge the public with the new COVID-19 vaccines.
The contracts the government has agreed to with vaccine manufactures appear to be relatively low, ranging from $10 to $20 a dose.
In spite of the reasonable per-dose price, Big Pharma is still set to have a massive windfall as they will produce billions of doses of the vaccines.
But this is how the Bayh-Dole system was intended to work.
Both the government and industry invest in a product that can help address public health needs. In turn, private business gets to make a profit and the public gets access to affordable medication.
Yet, it is important to remember that there is no future guarantee with regard to drug price gouging. Many other products developed using federal funds are now being sold at unfair prices.
In 2018, Americans spent over $530 billion on prescription drugs. This is 50% more than in 2010.
Many of these drugs were developed through government grants. Almost all of the drugs developed in the last decade were created with some federal funding.
This begs the question about what can be done regarding the ever-increasing cost of prescription drugs.
First, we need to praise drug manufacturers for not taking advantage of this pandemic and for charging a reasonable amount for the COVID-19 vaccines.
This is how a healthy public-private partnership is supposed to work, reflecting the intent of Bayh-Dole and the American spirit. It is right that both parties receive benefit from such partnerships.
Second, we need to continue to ask Big Pharma about out-of-control costs for other medications.
Because most medications are developed with public taxpayer money, the public needs to be able to see and feel the benefit our investment is making.
If companies continue to increase the costs of needed drugs with no other reason than to increase their bottom line, and if the public continues to question the benefits received from its investment in drug and vaccine development, then it might be time for Congress to revisit Bayh-Dole.