a service of the Nevada Policy Research Institute

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Nevada lawmakers support
attack on scientific researchers

By Steven Miller

Nevada’s lawmakers are nice people.

They would never walk into your house and—say—grab your stereo without permission and run down the street with it.

They also—we can be relatively sure—wouldn’t encourage other Nevadans to do so.

On the other hand, what if your property wasn’t physical, but intellectual? What if you’d written and copyrighted some software? A story? A song?

What if you were, say, Nevada’s Altair Nanotechnologies, and after years of research you’d achieved patents on ground-breaking new processes that helped clients like Nevada’s Titanium Metal Corporation produce its namesake metal more cost effectively? And helped other clients do environmental remediation, make better solar cells, or produce better pharmaceuticals?

Would Nevada lawmakers respect your intellectual property rights?

Maybe. Maybe not. It apparently all depends on whether attacking your patent or copyright protections might titillate enough thoughtless voters.

Currently, 52 of Nevada’s 63 state lawmakers are listed as official co-sponsors on a bill that explicitly assaults the patent protections and intellectual property rights of American companies—specifically, pharmaceutical firms. Assembly Majority Leader Barbara Buckley is lead sponsor of AB 195, which would violate U.S. law protecting the research patents behind brand-name prescription drugs. The bill would facilitate the unlawful mass importation of such drugs from Canada, where they are subjected to Canadian government price controls and only marginally profitable to their manufacturers.

The bill’s own preface acknowledges that the reimportation it would facilitate is an explicit violation of federal law: “Existing law prohibits a person from filling a prescription drug via the Internet if the drug has not been lawfully imported into the United States, or if the prescription was not delivered to a person in accordance with all applicable state and federal laws.” The U.S. laws referred to, of course, are designed to protect American patent-holders from reimportation.

A March 17 report of the Las Vegas Review-Journal said that AB 195 “calls for the Nevada Office of Consumer Health Assistance to go to Canada, check out pharmacies and license those that meet Nevada standards. The agency would set up a Web site that would make it easy for citizens to find qualified pharmacies that could fill their prescriptions.” Some officials said “they might be able to license pharmacies within two weeks or three weeks after the bill becomes law.”

Such remarks raise real questions about just how serious Assembly Bill 195 really is.

Canada, of course, is a sovereign nation. State of Nevada bureaucrats sent there to “check out pharmacies” would lack any legal power to actually independently determine which of them might “meet Nevada standards.” In Canada, Nevada officials would lack any ability to compel witnesses, demand government records, or otherwise conduct any meaningful licensing inquiry. Perhaps they might wander around in few north-of-the-borders drug marts, evaluating staff friendliness and the décor. The authors of AB 195 and their votaries in the state bureaucracy seem to believe that would suffice.

Nevertheless, a real issue of safety does exist. The U.S. Food and Drug Administration has been vocal in its concern over the safety of imported drugs, and—significantly—Canada, the “Canadian pharmacies” on the Internet, and the states and localities that allow importation all disclaim any responsibility for the safety of such drugs.

Apparently, that’s with good reason. An independent fact-finding mission at Kennedy Airport in New York found that of the 40,000 packages arriving there daily and believed to be carrying drugs, less than 700 were inspected. Yet in many of those the drugs were found to be past their expiration dates or improperly packaged—calling into question their effectiveness, and highlighting the risks of tampering.

Notwithstanding the dullness Nevada lawmakers currently demonstrate on the protection of intellectual property, that protection is vital to the Silver State economy. For example, the gaming technology innovations of International Game Technology (IGT), one of the few Fortune 500 companies in the Reno area, are so critical to the firm’s future that it has an in-house intellectual property department, just to oversee patent issues.

Indeed, the entire U.S. economy is highly dependent on intellectual property protections. Economist John Howkins, writing in his book, The Creative Economy: How People Make Money from Ideas, points out that in 1999, $545 billion was spent worldwide on research and development. Of that the U.S. share was $243 billion, or 44.6 percent. That explains why, of the world’s total creative out-put just that year—including science, research, entertainment, fashion, software, etc.—the U.S. produced a $960-billion share, or 42.8 percent.

It was America’s Founding Fathers—most especially Jefferson and Madison—who wrote the protection of intellectual property into the U.S. Constitution. They so wanted to ensure that inventors and authors had an incentive to create that our founding charter gives Congress the authority “To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

Now, politicians in Nevada and other states seek to rob America’s “Authors and Inventors” of precisely those basic rights.

This undermines Nevada’s future. It undermines America’s. And it is appalling.

Steven Miller is policy director for the Nevada Policy Research Institute.