University Bayh-Dole Drug Price Gravy Licking

The financial sweet spot for drug development is to find compounds that make widely occurring acute conditions chronic. That’s a lifetime of payments following diagnosis. And really good for the twenty-year monopoly that permits pricing “whatever the market [for pain and suffering and the desire to live] might bear.” The really, really sweet spot is to diagnose early, so there is a full 20 years of payments possible for each diagnosis. So much for the “market” guiding health care research. Next up, EMTs asking, “What’s a life-saving effort worth to ya, buddy?”

Think as well of the health insurance companies. They have to bet that acute conditions will end quickly and without heroics–either you die or get cured. The insurance companies, to make a profit, have to hope the drug companies aren’t successful with their acute to chronic conversion.

Now drop into this the now-conventional university patent licensing folks. The university folks claim Bayh-Dole has been a wild success because it permits exclusive licensing of patents to create private monopolies that can maximize income, especially for drug company products that turn acute conditions chronic. If drug companies have found a way to run up decades’ worth of wild and crazy profits off the backs of folks hoping to stay alive and mostly out of pain, well then universities ought to be ticks along for the ride for their 1% of those billions.

University administrators argue that this ride is what Bayh-Dole was all about. And that must be why Bayh-Dole keeps its performance reporting secret. Why the public intervention procedures are so tangled (deliberately) to be unusable. Why there’s no enforcement for assigning patent rights under the cover of marking a document “exclusive license.” Why there’s no audit of how university administrators use the money they make. There is no limit on the length of an exclusive license (used to be, but it was removed soon after Bayh-Dole became law).

Bayh-Dole is a bureaucratic holiday, a picnic for institutional patent speculation. No oversight, no accountability, no questioning press, no likelihood of intervention, no need to report or report accurately, no need for reform, no need even to follow the law the way it is written. Nah, just do whatever and claim it’s for public benefit.

Bayh-Dole is about the freedom for universities to ride the monopoly gravy train of drug companies out to exploit pain and suffering for maximum return. Not only that, they get to help to create that gravy train. If preventions and cures won’t happen soon, may as well try to clean up on making acute stuff chronic–even extending someone’s acute life a year means a well paying year. And Bayh-Dole says that universities get to ride this train with impunity.

Riding this gravy train once every decade or two or three is a wild success that makes whatever else must be done worth it. The university invention commercialization rate appears to be under 0.5%. One in 200 inventions might see a glimpse of product life. 199 others will be precluded from use for 20 years to make this happen. The big winners–a much lower rate than that by far. The effective commercialization rate for big winners rounds to about 0.0% for the majority of university licensing offices. Everything else can sit and fester.

And, sure, the drug companies must figure that what they are really doing is mostly taking money from health insurance companies and from the federal government, and only indirectly from those suffering from acuteness. And there are even special discount programs if it turns out that poor folks haven’t figured a way to get insurance companies or the government to pay on their behalf. Soaking insurance companies–that’s just our shareholders profiting at the expense of your shareholders. And soaking the government. Well, yeah. Everybody does that.

And sure the drug companies claim that it’s expensive to develop new drugs (it is expensive, but not nearly so expensive as they make out–perhaps only 20% as expensive, but then the drug companies don’t publish what it really costs).

And sure the drug companies claim that they need huge profits to put back into more research–except the research part gets paid for, apparently about half the time, by the public.

This is a good business. It’s clear why university administrators–at least those lacking any ability to hold back–would scramble for the chance to lick the gravy, too.

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