Freedom Line Blog

This week, Senator Elizabeth Warren (D – Massachusetts) and a group of fellow liberals submitted a letter to the United States Department of Health and Human Services (HHS) demanding that the federal government employ so-called “march-in” rights under the Bayh-Dole Act of 1980 to disregard private patent rights on the critical cancer drug Xtandi.

Here’s why that’s a terrible and potentially deadly idea that the HHS, other lawmakers and the American public must oppose.

Simply put, disregarding patent protections for pharmaceutical innovators will bring innovation to a halt and deprive Americans of lifesaving drugs.  America currently produces two-thirds of all new drugs worldwide, and that’s because our nation honors and protects patent rights, it doesn’t violate them.

It’s especially outrageous that Senator Warren and her cohorts seek to leverage the Bayh-Dole Act of 1980 to facilitate their scheme.  The Bayh-Dole Act was passed in order to extend patent rights to universities and nonprofit research entities whose research was assisted by federal funds, not weaken them.  Prior to Bayh-Dole, very few innovations partially funded by federal dollars were ever commercially pursued – only 390 in the year prior to its passage.  Four decades later, however, that number approaches 7,500, with over 420,000 inventions and 13,000 new startup enterprises formed.

That explains why The Economist magazine labeled Bayh-Dole the most important bill of the past half-century:

Possibly the most inspired piece of legislation to be enacted in America over the past half-century was the Bayh-Dole Act of 1980.  Together with amendments in 1984 and augmentation in 1986, this unlocked all the inventions and discoveries that had been made in laboratories throughout the United States with taxpayers’ money.”

Alarmingly, however, this groups seeks to undermine patent rights for Xtandi by exploiting a “march-in” provision within Bayh-Dole to empower the federal government to commandeer new drugs and license the patents on inventions partially funded by federal dollars to third parties.   According to their flawed logic, the market prices of some drugs render them insufficiently available to the general public, and on that basis they encourage federal bureaucracies to forcibly license those drugs’ patent rights to other third parties for manufacture and sale.  That would constitute a frontal assault against private pharmaceutical innovators, disregarding their patent rights and the enormous investments they’ve made over years and decades to conceive, perfect, produce and distribute those drugs.  It would also contravene the statutory terms of Bayh-Dole itself.

Indeed, Senators Birch Bayh and Bob Dole themselves confirmed that the law bearing their names did not intend or allow cost to become a mechanism for imposition of de facto drug price controls:

Bayh-Dole did not intend that government set prices on resulting products.  The law makes no reference to a reasonable price that should be dictated by the government.  This omission was intentional;  the primary purpose of the act was to entice the private sector to seek public-private research collaboration rather than focusing on its own proprietary research.”

That’s precisely why the National Institutes of Health (NIH) has rejected every one of the “march-in” petitions that it has received during the Bayh-Dole Act’s existence.  It has consistently and correctly ruled that attempts to leverage price allegations to justify march-in would undermine the very goal of the act and ultimately harm American consumers.

People like Sen. Warren and her cohorts nevertheless claim that federal funding toward pharmaceutical research justify government march-in intrusion, falsely asserting that pharmaceutical innovators somehow enjoy a free ride at taxpayer expense.   That’s false.

Private funding for research and development actually dwarfs public funding.  According to the NIH itself, private sector R&D far exceeds NIH funding throughout recent years and decades.  In 2018, as another example, the NIH spent $3 billion on clinical trials involving new or existing drugs, compared to $102 billion in R&D by the U.S. biopharmaceutical industry.  Indeed, the pharmaceutical industry stands as the single largest source of business R&D funding in the U.S., accounting for 17.6% of all U.S. business R&D.  The next-closest counterpart is the software sector at 9.1%, with the automobile industry at 5.9% and the aerospace industry at 4.1%.

Senator Warren and her cosigners also allege that inflation somehow justifies their demand, but the fact is that drug prices significantly trail overall inflation.

Accordingly, the facts show that strong U.S. patent protections and the Bayh-Dole law promote pharmaceutical R&D investment, and there’s simply no legal or logical basis for advocating march-in regarding Xtandi.  Pharmaceutical innovation demands billions of dollars in sunk costs of investment, not to mention potential product liability lawsuits for any errors.  Strong patent protections, which Bayh-Dole codifies, help ensure that those costs and risks will be fairly and sufficiently rewarded.  They provide innovators and investors the incentives to create pharmaceuticals that save millions and even billions of lives worldwide.

The demand by Senators Warren and her cosigners would dangerously jeopardize that.

As the U.S. economy shows sudden weakness, American consumers understandably express increasing anxiety.  A troubling new Gallup survey reports that economic confidence has now declined to lows unsurpassed since the early days of the Covid pandemic in 2020.

Undeterred by that accumulating weakness and alarm, however, Senator Elizabeth Warren (D – Massachusetts) appears restless to strike yet another dangerous hammer blow by re-introducing her misnamed “Stop Wall Street Looting Act.”

She may think that title can conceal the bill’s danger, but Americans and elected officials mustn’t be fooled or invite the potentially catastrophic economic peril.

Senator Warren’s bill includes significant tax increases, as well as new legal liabilities and bureaucratic regulations on U.S. investment, and it seeks to reshape the entire American bankruptcy code in an environment already suffering excessive anxiety.  The legislation would also begin taxing private equity as ordinary income, which makes no sense because private equity investments come with an inherent risk of loss, unlike ordinary wages.  It would thereby eviscerate investors’ incentive to risk capital because any future earnings would be taxed in the same as ordinary wages that carry no similar risk of loss.  When investments fail, the risk of loss is carried by the investors.  That means lots of downside, but significantly less upside.

And as studies confirm, the economic impact of Senator Warren’s bill would be devastating.

Specifically, it would kill off between 6.9 million and 26.3 million jobs across the U.S., while actually reducing incoming federal, state and local tax revenues between a whopping $109 billion and $475 billion each year.  It would also wipe out between $671 million and $3.36 billion in investments per year (with pension fund retirees accounting for many of those investors), and would drive many private equity firms out of business due to the bill’s elevated risks and regulations.

The good news is that even moderate Democrats express objection to Senator Warren’s idea.  Politico reports that, “It’s setting up a clash with moderate Democrats who say private equity is a crucial tool to keep capital flowing to businesses and propel economic growth.”

American workers, retirees, investors, public pension beneficiaries and employers shouldn’t be forced to pay the price for Senator Warren’s pet ideological agenda, and Congress must unequivocally reject her proposed bill.

Expect to see a lot more of Elizabeth Warren over the next two years.

That’s the inescapable conclusion after the Massachusetts senator was presented by soon-to-be Senate Minority Leader Harry Reid (D-NV) as the Democratic leadership’s envoy to liberal groups.

It’ll be interesting to see what Warren, popular with the party’s liberal base and thought to be considering a 2016 presidential campaign, will do with this newly created institutional perch. Some on the left fret that she’ll be coopted by the Democratic establishment and tone down her rhetoric in hopes of broadening her appeal.

Her fans, however, see Warren’s addition to the Senate Democratic leadership team as “a sign that her liberal agenda [is] winning the battle for the future of the Democratic Party,” reports The Atlantic.

If true, that’s good news for conservatives.

If losing eight Senate seats to Republicans in an election where, by his own admission, President Barack Obama’s liberal policies were on the ballot, means the Democratic Party needs to sound more like Elizabeth Warren, maybe there’s a chance the Republican hold on Congress will persist beyond 2016.

If you wanted to know what a U.S. Senator from Massachusetts thinks about a Florida murder trial, the Huffington Post has you covered.

Speaking to the press in South Boston today, Elizabeth Warren (D-MA) said that while she thinks people should accept George Zimmerman’s acquittal in Trayvon Martin’s shooting death, it is reasonable to criticize ‘Stand Your Ground’ laws.

Except that it’s completely unreasonable in Zimmerman’s case. As I pointed out in my column last week, Florida’s ‘Stand Your Ground’ law played absolutely no part in the trial for either the prosecution or the defense. Instead, Zimmerman argued that once Martin started beating him he was entitled to use deadly force to defend himself. Zimmerman relied on traditional self-defense, not ‘Stand Your Ground’ – a law which drops the requirement that a person reasonably fearing death or great bodily injury must first try to escape before engaging his attacker.

This isn’t the first time Senator Warren has played fast and loose with the facts. For decades she (at best) made misleading assertions about her alleged Native American ancestry, allowing her to get plumb academic jobs at Penn and Harvard Law ahead of other more qualified candidates. Earlier this year, Warren claimed that her brother lived solely on his Social Security checks – a claim she walked back after admitting that she and her millionaire husband give him assistance.

And so on with today’s politicization of Florida’s ‘Stand Your Ground’ law.

Warren, like other liberal elites, is turning a tragedy into an activist agenda to repeal a law that played no part in Martin’s death. It would be comical if it didn’t betray a serious disregard for reality. Warren and friends need to stop directing anger at the wrong source, and start acting with the competence and prudence their high offices demand.

If U.S. Senator John Kerry (D-MA) becomes the next Secretary of State, expect several dominos to fall.  Soon-to-be-former Senator Scott Brown seems poised to run in yet another special election.  Bay State Tea Party groups will have to decide whether to support a member-turned-establishment figure like Brown over someone more conservative, but arguably less able to win.

And then there’s Ben Affleck.  What?  According to The Daily Caller, Affleck, the Hollywood star and Massachusetts native, recently met privately with Senator Kerry in Washington, D.C., possibly to discuss running for the latter’s open seat in 2013.  If you’re looking for qualifications, Affleck graduated from Harvard, won an Academy Award for co-writing “Good Will Hunting,” and founded the East Congo Initiative.  Oh, he’s also married to actress Jennifer Garner.

But if Affleck isn’t your ideal Senator, remember, it could be worse.  Minnesota gave us Saturday Night Live’s Al Franken.  If Affleck takes a pass, America could get his friend and Palin-hater, Matt Damon.  Can you imagine Damon and Elizabeth Warren together?

Last week, in her first debate with U.S. Senator Scott Brown (R-MA), Democratic challenger Elizabeth Warren tried to nationalize their contest in terms designed to solidify her support from Bay State environmentalists:

“Senator Brown has been going around the country, talking to people, saying, you’ve got to contribute to his campaign because it may be for the control of the Senate.  And he’s right.  …  What that would mean is if the Republicans take over control of the Senate, Jim Inhofe would become the person who would be in charge of the committee that oversees the Environmental Protection Agency.  He’s a man that has called global warming ‘a hoax.’  In fact, that’s the title of his book.”

To be fair to Senator Inhofe, who, as the Ranking Member of the Senate Committee on Environment and Public Works is in line to lead the panel if Republicans become the majority, the full title of his book is The Greatest Hoax: How the Global Warming Conspiracy Threatens Your Future.

The hoax Inhofe describes is the use of Climategate-manipulated science to legitimize massive increases in taxes and regulation.

In its war on coal, the EPA has been at the forefront of the environmentalists’ push to tax and regulate an entire industry out of existence; most specifically by requiring coal operators to adopt expensive and experimental manufacturing techniques that are already making it necessary to lay off workers and close down plants.

By parsing Inhofe’s insight about how global warming alarmists politicize science to justify liberal policies, Warren was trying to substitute Inhofe’s complete rejection of global warming for Brown’s position on the issue.  In fact, Brown thinks global warming/climate change/something is happening.  But like Inhofe, he thinks that getting the job market growing again trumps spending billions of dollars on policies built in part on scientific fraud.

Brown shouldn’t shy away from this issue so long as he frames it correctly.  The environmental activists that Warren was playing to won’t be voting for him anyway.  But the independents that put Brown in office two years ago know that job-killing taxes and regulations don’t make sense; especially in an era of chronic unemployment.

Charles C. Johnson of the Daily Caller unearthed a scathing review of U.S. Senate candidate Elizabeth Warren’s book that was published before Harvard Law School hired her in 1995:

In 1991, Rutgers Professor Phillip Schuchman reviewed Warren’s co-authored 1989 book “As We Forgive Our Debtors: Bankruptcy and Consumer Credit in America” in the pages of the Rutgers Law Review, a publication Warren once edited. Schuchman found “serious errors” which result in “grossly mistaken functions and comparisons.

Warren and her co-authors had drawn improper conclusions from “even their flawed findings,” and “made their raw data unavailable” to check, he wrote. “In my opinion, the authors have engaged in repeated instances of scientific misconduct.”

The work “contains so much exaggeration, so many questionable ploys, and so many incorrect statements that it would be well to check the accuracy of their raw data, as old as it is,” Schuchman added.

Further reporting by Johnson indicates the reason for HLS’ willful oversight – an affirmative action policy that placed a premium on hiring female and minority faculty members.

For months now Warren’s Senate candidacy has been plagued by her use of alleged Cherokee ancestry to get academic jobs she might otherwise have failed to get.

Just last week, Warren told the Democratic National Convention, “We celebrate success.  We just don’t want the game to be rigged.”

At least not after she’s won.

2012  may be remembered as the year that Barack Obama dropped the mask. Based on his remarks at a campaign stop in Roanoke, Virginia on Friday, the president has no interest in making his peace with America’s entrepreneurs. In fact, his remarks there should make their blood run cold:

We’ve heard this rap before. It sounds suspiciously like Elizabeth Warren’s pep talk to a room full of agitated Boston liberals. But, if anything, Obama’s remarks are actually worse. Warren didn’t go so far as to denigrate hard work and intelligence, which the president seems to consider middling factors when it comes to being successful in life (note to the president: I’d absolutely love to meet these armies of workaholic geniuses who wouldn’t be succeeding without the federal government).

The asininity per square inch of this speech is pretty daunting, but here are a few corrective notes:

• Notice the examples Obama uses — teachers, firefighters, and infrastructure. These are all (by relatively expansive definitions, anyway) public goods. If there were a caucus of conservatives out there advocating boarding up schools, abolishing fire departments, and moving to a system of rope bridges, the president would have a point, but these are generally uncontroversial examples of public expenditures. Moreover, they’re not areas that are primarily financed by the federal government. Left unsaid is why taxes should increase to fund green-energy boondoggles like Solyndra, PR efforts for the stimulus package, or six-figure salaries for the Interior Department’s Twitter monkey.

• The constant liberal assertion that the economic growth of the 1990s — coming on the heels of Bill Clinton’s tax increases — shows that taxes don’t effect the broader economy confuses correlation with causation and ignores the effects of NAFTA, the IT revolution, welfare reform, etc. In truth, the 90s likely boomed less than they would have without Clinton’s tax hikes, something that the work of Obama’s own economic advisers suggests.

• Liberals love to trot out the example of the internet as government innovation that works, but it’s worth noting that the internet wasn’t designed with commercial purposes in mind, but rather as a communications tool for the military. And, in fact, many of the lingering inefficiencies of the internet stem from its government paternity, and a whole host of the improvements that have been made to it owe to market forces.

We’re still early in the 2012 election cycle, but it’s going to be tough to top Massachusetts Democratic Senate candidate Elizabeth Warren’s diversity scandal (which I’m dubbing “Tipigate”) for irony.

As Ashton noted here last week, Warren — who has been liberalism’s “it girl” of the past few years — is in hot water after it emerged that she claimed Cherokee ancestry during her time as a member of the Harvard faculty.

According to a new piece by Alex Pappas in the Daily Caller, not only is the Cherokee connection dubious (the Warren relative in question was referred to as “white” in the census count), the family tree isn’t exactly Native American-friendly:

Cornell Law School professor William A. Jacobson, citing a genealogist, claimed Tuesday that Massachusetts Senate hopeful Elizabeth Warren’s ancestry includes a great-great-great grandfather who helped round up Cherokees in the days leading to the Trail of Tears.

Warren, of course, shouldn’t be held responsible for the vices of her forebears. But consistency would dictate that she thus has no claim on their virtues either.

John Fund nails liberal Massachusetts Senate candidate Elizabeth Warren for being a consistent fraud.  In the last week her bid to unseat Scott Brown has taken two steps backward with the revelation that although she listed herself as a Native American for over a decade as a law professor, she – at most – is only 1/32 Cherokee; and even that connection is in dispute.

The incident confirms Warren as a practitioner of the liberal art of claiming multiple diversity status; in her case as a woman and a Native American.

Just as revealing is her decision year after year to pay Massachusetts’ lower state income tax rather than a voluntary higher rate as she insists wealthy people like her should do.

Fund’s conclusion:

Warren is free to believe that she has Native American ancestry, just as she is free to keep as much of her money as she is legally entitled to. But her choices in filling out forms are instructive. In checking the boxes claiming Native American status for so many years and in not checking the box to pay a higher state income-tax rate, she has revealed more than we need to know to brand her as yet another sanctimonious liberal who wants to have it all ways.

If Warren’s misfires keep up, Scott Brown will once again benefit from running against an unusually self-destructive liberal.

Though Senator Scott Brown (R-MA) hasn’t exactly been the reincarnation of John Adams, some Bay State Tea Party leaders are weighing whether helping reelect the moderate Brown is better than sitting back and letting him duke it out with Harvard professor and Obama protégé Elizabeth Warren next year:

“Elizabeth Warren is a game-changer,” Varley said. “Elizabeth Warren is a dyed-in-the-wool progressive. We can say we may not be thrilled with Sen. Brown, but we certainly don’t want Elizabeth Warren.”

Unlike other GOP moderates like Senators Olympia Snowe (ME), Orrin Hatch (UT), and Richard Lugar (IN), Brown will likely get a pass in the primary, and have uber-liberal Warren to show as a much worse alternative.  Between now and November 2012, hopefully Brown gives Tea Party voters something to vote for.

H/T: FoxNews