Senator Scott Defends Free Market Values, American Innovation

WASHINGTON — In light of the Biden administration’s unwarranted regulatory actions to stifle robust intellectual property rights, innovation, and competition, U.S. Senator Tim Scott (R-S.C.) is championing efforts to hold the administration accountable and safeguard American free-market values for small businesses and the U.S. healthcare system.

Senator Scott sent three letters to the Biden administration urging for a return to commonsense policies that protect the free-market – the bedrock of American opportunity.

Letter Regarding the National Institute of Standards and Technology’s Innovation Killing Proposal
The National Institute of Standards and Technology (NIST) announced a proposal to change the traditional interpretation of the Bayh-Dole Act’s “march-in rights.” Under the proposed change, companies and individuals conducting collaborative research with the government will be in danger of losing their intellectual property, threatening the public-private partnerships that fuel cures and innovative health solutions. The proposal is especially concerning because it has served as the catalyst for other federal agencies to propose seizing intellectual property rights while placing innovative gene therapies – like CRISPR — developed through public-private partnerships at risk.

As the National Institute of Health (NIH) potentially considers enacting NIST’s proposal, Senator Scott joined Senator Bill Cassidy (R-La.), Ranking Member of the Senate Committee on Health, Education, Labor and Pensions, in sending a letter to NIH, urging the agency to protect innovation and the open marketplace of ideas. America cannot continue to lead the world in developing cures and innovative healthcare solutions unless the incentives remain for the private sector to partner with public agencies. 

“The Bayh-Dole Coalition, a diverse group including universities, small businesses, and non-profit organizations with interests in research and technology transfer, stated that this draft framework is a ‘stark departure from the government’s long-standing interpretation of the Bayh-Dole Act’ that ‘would discourage critical public-private partnerships and prevent thousands of transformational discoveries from reaching consumers.’” the senators wrote to NIH Director Dr. Monica Bertagnolli. “A short-sighted decision to exercise march-in rights would work against your stated goal and jeopardize patient access by discouraging individuals from partnering with NIH to develop new cures and treatments.”

Read the letter in full here.  

Letter Regarding the Health and Human Services’ Initiative to Undermine “March-In” Rights
Last year, the U.S. Department of Health and Human Services (HHS) and the Department of Commerce (DOC) announced similar plans to expand federal agencies’ ability to seize certain patents by developing a new interpretation of the Bayh-Dole Act’s “march-in rights.” Once again, the “march-in rights”  proposal could allow the government to take over IP rights and reduce the private sector’s incentive to collaborate with the government on developing cures for cancer and life-threatening diseases.

Senator Scott joined Senate Small Business Committee Ranking Member Joni Ernst (R-Iowa) and his Senate colleagues in demanding HHS and DOC examine the impact of this expansion of power on American innovation across multiple sectors, including small businesses and healthcare.

“It is jarring to see the expanded range of possible circumstances in which the Administration seems intent on seizing patents held by small business owners — including those developed within the Small Business Innovation Research and Small Business Technology Transfer (SBIR-STTR) programs. Broad exercise of march-in authority under the Bayh-Dole Act could disincentivize small businesses from competing for federal research and development (R&D) dollars, discourage commercialization, and stifle America’s innovation ecosystem at large,” the senators wrote to HHS Secretary Xavier Becerra. “While this risk of march-in is not new, the Biden Administration is making a true mistake if it puts this authority in practice and even expands the scope of allowable justifications as is proposed under the draft framework.”

Read the letter in full here.

Letter Regarding the World Trade Organization’s Proposal to Waive Intellectual Property Protections
A proposal before the World Trade Organization’s (WTO) 13th ministerial conference (MC13) last week would have waived intellectual property (IP) protections for COVID-19 tests and treatments. While waiving protections afforded by the WTO Agreement on Trade-Related Aspects of IP Rights (TRIPS) could have unintended consequences for the development of new tests and treatments for infectious diseases, this waiver does little to improve access to medicine. The Biden administration did not publicly oppose the proposal ahead of MC13.

Senator Tim Scott (R-S.C.), member of the Senate Committee on Finance, joined Ranking Member Mike Crapo (R-Idaho), along with Senators Chris Coons (D-Del.), Tom Carper (D-Del.), Thom Tillis (R-N.C.) and nine of their Senate colleagues in a letter to President Biden last month urging him to reject an expansion of the WTO TRIPS waiver. 

“Waiving rules meant to incentivize the discovery and production of life-saving medicines will cause investors and innovators to shift their efforts elsewhere. In this way, the proposed IP waiver would have the perverse effect of diminishing development of new treatments for dangerous diseases,” the senators wrote to President Biden. “What is more, allowing foreign competitors to disregard IP protections for made-in-the-USA biomedical technologies would undercut U.S. businesses and undermine the efforts of the workers who brought those technologies to market.  Much of our economic strength is built upon the basis of robust IP protection, and eroding this foundation would only serve to weaken our global competitiveness.”

Due in part to Senator Scott and his congressional colleagues’ opposition, the WTO decided against expanding the TRIPS waiver last week.  

Read the letter in full here.