Home > Journals > St. John's Law Review > Vol. 98 > No. 2
Document Type
Article
Abstract
The Biden Administration, congressional leaders, and academic commentators have argued that patents cause high drug prices. They have proposed price controls as a solution. They allege that two federal statutes authorize the government to impose price controls on drug patents to lower drug prices: 28 U.S.C. § 1498 and the Bayh-Dole Act.
Neither § 1498 nor the Bayh-Dole Act authorize price controls on patents. Section 1498 is an eminent domain statute that applies only when a patent is used by and for the federal government, such for the military or by the U.S. Postal Service. The Bayh-Dole Act promotes the private commercialization of inventions derived from federally funded upstream research in universities. The Bayh-Dole Act provides that, if patents are not licensed, an agency may “march in” and offer nonexclusive licenses. Neither § 1498 nor the Bayh-Dole Act specify “price” as a trigger for imposing price controls on private transactions in the marketplace. Over several decades, courts and agencies have consistently reaffirmed the plain meaning of the statutory text: § 1498 and the Bayh-Dole Act do not authorize imposing price controls on patented inventions in private transactions.
The price-control theories of § 1498 and the Bayh-Dole Act are policy arguments masquerading as statutory construction. Congress knows how to enact price-control laws, such as in enacting the Emergency Price Control Act of 1942 or expressly stating in a statute that the government may determine a “reasonable price” or “fair price.” In their efforts to break patents to lower drug prices in the healthcare market, advocates for the price-control theories are avoiding the necessary justification for price controls by falsely claiming that Congress has already endorsed this unprecedented and controversial power.
