Will Federally Funded Basic Research Be Victimized By Republican Budget Unrest?

The long-expected clash between Republican campaign rhetoric and the political reality of Republican control begins in the House this week. And what happens to R&D funding in the budget process is still unclear, but because of its size and future benefits as distinguished from immediate impact, its current $130+billion will not be unnoticed by a revenue-starved “controlled” Congress.

Beyond this week’s start of House committee consideration of ACA, including its repeal of revenue producers. And the administration has promised “details” this week on its $54 bn. increase in discretionary defense spending. This implies an equivalent decrease in non-military civilian discretionary spending. Discretionary spending is about a third of our entire federal budget. The remaining two thirds are mandatory paying for debt interest, and the Social Security/ Medicare entitlements Trump has vowed to leave untouched. Like the “Wall” new expenses, must be offset by future budget savings, either from future reductions in mandatory entitlements or from discretionary expenditures like the Depts. of State, EPA, and AID. Repealing small fry funding for the Arts, Head Start Americorps, and the Corporation for Public Broadcasting contribute little to the savings needed to offset Trump’s announced spending increases and tax reductions. Other spending offset sources like more revenue or increased debt have their own problems. So, to put it bluntly, R&D’s annual $130bn. appropriation which includes future basic science funding at NIH, NSA, and DOE is a very tempting offsets target. Will R&D funding it be trimmed… and if so how much? Two Trump budgets (for 2016 and 2017) must clear the House this Spring. And while the coming budget battle may be too complex to knowledgeably monitor both, for those of us who care about federally funded basic research, it makes sense to pay attention, stay alert and be ready to act if R&D funding goes on the chopping block. Here’s the problem. R&D funding invests in the future. The budget quagmire is now. If a deadlock among Republicans emerges Republicans collectively must resolve it because there is no one else to blame. They have postponed defining their actual positions for years. Will they now postpone implementation of long term investment expenditures whose beneficial effect is not immediate?

Continue reading Will Federally Funded Basic Research Be Victimized By Republican Budget Unrest?

Hard Times Ahead

Congressional pursuit of HR 9-type comprehensive patent reform seems to have slowed. Maybe we can all breathe easy for a while. Or not!  Unless universities can convince Congress that Bayh-Dole based commercialization is the key to the growth and medical progress intended by past and future R&D funding, they are targeted for trouble.

Google was just tagged with a $ 20M patent infringement damages award.  Big tech’s efficient infringement business model exposes big ICT firms to similar damages. On a pure cost-benefit basis, the enforcement protection provided by HR 9-type legislation is still compelling to big ICT aggregators. Beyond denying court access to most patent holders, HR-9 reduces the cost of the ICT components they aggregate, which increases their ICT’s share of consumers’ purchase price. Moreover, their past investments in PR-spawned patent trolls, junk science analysis, academic blather and indirect judicial influence are getting stale but haven’t reached their “sell by date”. Big tech has new pressing priorities and they no longer have the president in their thrall, but as long as Reps. Goodlatte and Issa run IP issues in House Judiciary, any IP legislation that comes their way can be converted into all or any part of HR 9. More than one bill may be on the way and in this year’s budget battle R&D funding is in jeopardy. (Read more at Ipstrategic.com)

House Judiciary Chair Goodlatte publicly admitted that recent judicial responses to issues addressed by HR 9 have reduced its urgency. His IP Subcommittee Chair Issa has indicated that the HR 9 issues are more likely to be addressed on a “modular” rather than on a comprehensive basis. Both blame universities for stalling HR 9 after it had earlier passed the House by a vote of 325 to 91. They have said that fixing the venue problem would be considered depending on how it is addressed by the SCOTUS in the now pending Heartland case. Senator Hatch has said that fixing the venue problem should await Heartland but also said however heartland is decided the venue issue needs to be addressed by Congress

Then there’s the Alice/ Mayo controversy outlined and explained in an IPWatchdog post by Manny Schecter.  A number of major IP players including; The American Bar Association’s Section on IP, AIPLA, IPO and PhRMA have expressed the need for a Section101 fix. IPO is already circulating a draft bill. It thus seems highly likely that if and when the House and Senate Judiciary Committees find the time to deal with Alice/Mayo, patent reform will be in play again.

We must use this temporary “lull” to explain to our congressional delegations how Bayh-Dole commercialization is the bridge to the public benefit contemplated by Congress when it annually appropriates $130 bn. to R&D. State budget cuts to universities should alert us to what may happen at the federal level. Budget issues lie at the heart of DC’s current chaos. Deficit hawks are circling like buzzards and every dollar appropriated in the past for R&D has been eye-balled and will be sought by other desperate interests on the congressional chopping block. Listen to William Bonvillain, who directs MIT’s Washington Office;

“Citing federal budget trends, with an expected tax cut and infrastructure spending program as well as a possible dismantling of the Affordable Care Act, William Bonvillian, director of MIT’s Washington office, said that discretionary federal spending is set to be squeezed. That, in turn, can be expected to hit scientific research budgets, he said, and in turn, the federal and university based research community. “There is going to be a challenge” to research and development programs, Bonvillian said. “We’re going to need to tell the story, that R&D is actually a key part of the solution, it’s part of growth. But the challenge this time in telling that story is going to be even greater than usual.”

Research universities must explain to their congressional delegations why R&D must be funded and its Bayh-Dole based commercialization must be protected iso congressional funds already in the pipeline can produce the future jobs and beneficial scientific progress they expected when they voted to support it. And they must do it now, HR 9’s choke-hold on private sector investment leads eventually to reduced congressional R&D appropriations. But in the budget battle now fully underway unless universities actively justify their commercialization of federally- funded R&D, other influential interests on the Hill who care little about scientific study but care a lot about their own survival see R&D’s annual funding as a source to save themselves.

 

Trump Moves Towards Life Science Support

The pre-election clamor about prescription drug pricing took an interesting turn last week following President Trump’s meeting with prescription drug-makers at the White House. Earlier this year pricing abuse by rogue firms whose lack of competition in certain markets enabled upward price ratcheting attracted glaring press outrage leading to presidential campaign promises to curb prescription drug pricing if elected. Unfortunately, top down price controls cannot cure this market malady. Indeed, by choking-off investment in basic life science research to develop cures advancing competition they will only worsen it. Post-AIA uncertainty plaguing commercialization is shrinking independent private investment in the long and costly development of high-risk life science products, shielding sole suppliers to certain patient markets from competition. Continue reading Trump Moves Towards Life Science Support

Water Balloons and Commercialization’s Public Benefit Delivery

Paul Morinville is Managing Director of US Inventor, Inc and a tireless and effective Hill advocate for strong patents. With the story below Paul demonstrates the power of a memorable narrative when pro-patent universities discuss patent reform with congressional Members and Staff. Hill folks have busy schedules and short attention spans. Patent law’s arcane complexity is a time-suck buzz-kill for most. It cannot be compressed into an elevator speech. But water balloons?……now that’s a different story. Addressing a patent law conference earlier this month patent champion and STRONG ACT sponsor Senator Chris Coons diplomatically emphasized the importance of “narratives” when explaining the parlous state of today’s destabilized commercialization dynamic. We know that as patent protection become increasingly less assured, private sector investment becomes increasingly harder to attract. Because of PTAB nullifications and other investment deterring uncertainties, commercialization’s public-private partnerships are now becoming an endangered species. Continue reading Water Balloons and Commercialization’s Public Benefit Delivery

Prolonged, Pervasive, Uncertainty Lowers Commercialization Values

Recent prioritization of high-profile administration and congressional activity may postpone pending patent reform. It will not end it.  Postponement itself prolongs uncertainty’s harm to research university and other early stage commercialization by extending its deterrence of private sector investment. Because R&D originators are prime patent holders, patent valuations affect the product supply chain componential shares of ultimate product pricing, especially by its intermediary developers. Wars over product pricing are therefor always underway in three interrelated arenas; the market, the Congress and the courts. Research universities have been losers in each of these arenas because as originators of patented technology, their earliest stage commercialization efforts are most affected by these internecine struggles. They thus must watch all three areas closely because they stand to suffer more collateral damage to their TTO commercialization model when the congressional battles resume. Whatever weakens the value of promising research weakens commercialization. Continue reading Prolonged, Pervasive, Uncertainty Lowers Commercialization Values

Drug Pricing and Life Science Commercialization

Federation of American Societies for Experimental Biology (FASEB) members number 125,000 including thirty health-focused societies. It is the largest coalition of biomedical research associations in the United States. Widely considered as the policy voice of biological and biomedical researchers, FASAB annually advocates for “stable and predictable” congressionally appropriated federal funding for basic life science research. Its 2017 recommendations for added congressional funding of five federal life science grant agencies highlights recent medicinal therapies flowing from their life science grants. It also states why and by how much grant funding should be increased for each agency. here. Federal funding stability and predictability enable projects already being conducted to continue and enable formation of new commercialization partnerships leading to more promising scientific discoveries through private sector investment. Continue reading Drug Pricing and Life Science Commercialization

We Are Not Alone . . . .

Neal Solomon’s well-written, thoughtful IPWatchdog post (linked below) presents a patent policy agenda for President-elect Trump. It also is a policy roadmap for all pro-patent advocates in the months ahead. Already it has attracted 26 comments, many of which add other important pro-patent policy proposals. The harms it describes are especially applicable to research universities. Moreover it not only demonstrates that our pro-patent ranks have swelled , it warns us that commercialization of research universities’ basic research cannot continue if patents are insufficiently reliable to support private sector investment in commercially promising scientific research. When commercialization becomes impossible congressional R&D grants will no longer be politically justifiable. Continue reading We Are Not Alone . . . .