Public Goods and Fair Prices: Balancing Technological Innovation with Social Well-Being

Abstract

A recent controversy concerning the pricing of drugs and other technological innovations funded by public dollars raised profound m,oral and social questions, questions the bioethics community has long overlooked. The scope of bioethics has expanded over the years from its original emphasis on questions arising out of clinical encounters and biomedical research to an increasing emphasis on questions about health policy and health care reform. I have long been convinced, however, that even this expanded scope is still conceived far too narrowly. While few technological advances in medicine take place without public commentary by bioethicists, major structural changes in the delivery of health care or in the conduct of biomedical research often go unnoticed by the bioethics community, despite the fact that these changes often raise profound moral and social issues. A splendid example of this neglect was the silence of the bioethics community about the announcement on 11 April 1995 by Harold Varmus, the director of the National Institutes of Health, that the NIH would no longer insist on a "reasonable pricing clause" in Cooperative Research and Development Agreements and in Exclusive license Agreements between industry and government in the process of technology transfer.[1] This decision reversed a policy adopted in 1989 as a result of a public outcry over the pricing by Burroughs-Wellcome of AZT, which had been developed in part by researchers at the National Cancer Institute. This was an issue much debated in the research and biotechnology community for six years, with two major meetings at the NIH in 1994 devoted to it. There was no bioethics input at either of those meetings, despite the fact that the issue raises many important questions to which both moral theory and political philosophy have much to contribute. It is time for the bioethics community to expand its focus and jorovide input to many more issues. The Technology Transfer Background In the 1980s, the U.S. Congress passed two major acts[2] the designed to promote collaboration between the federal research effort and the development of useful technologies, the process that has come to be called technology transfer[3]. The thinking behind these statutes is clearly articulated in the following congressional statement explaining the second act: The United States can no longer afford the luxury of isolating its government laboratories from university and industry laboratories. Already endowed with the best research institutions in the world, this country is increasingly challenged in its military and economic competitiveness. The national interest demands that the federal laboratories collaborate with universities and industry to ensure continued advances in scientific knowledge and its translation into useful technology. The Federal laboratories must be more responsive to national needs.[4] The first of the two acts was the Bayh-Dole Act of 1980. It addressed the ownership of inventions made by researchers using federal funds from contracts or grants. Since 1963, when President Kennedy issued a memorandum on this question, the patents were held by the government when the resulting products were to be used by the general public, when the research concerned public health or welfare, when the government was the principal developer in the field, or when the contractor was running a federally owned facility. There was a widespread conviction that this policy often resulted in potentially useful government-owned inventions not being developed into useful products. Those who might develop useful products, it was felt, did not do so because they didn't own the technology and couldn't be assured of an adequate and safe return on their investment. The 1980 Bayh-Dole Act changed this situation. …