The Health and Human Services Department, which a year ago ruled that profit-making organizations could compete for the $2 billion in grants awarded annually by the Public Health Service, recently broadened the rule.
As of today, profit-making concerns can apply for another $100 million in grants from other HHS programs, including grants to run black-lung clinics.
According to Dr. William F. Raub, an associate director of the National Institutes of Health, profit-making organizations were proscribed from getting research grants more than a decade ago because a few firms were associated "with some rather serious malfeasance in the handling of funds" and there were few profit-making firms interested in the grants.
In the late 1970s, HHS moved toward eliminating the prohibition. A year ago, most of the research programs of NIH, the Centers for Disease Control and other PHS agencies were opened to profit-making groups.
If a small business or nonprofit group develops and patents an invention made with the help of HHS grants, the government has the right to a free license to make and use the invention. However, rights to inventions made by large profit-making firms, even with the aid of HHS money, would be held exclusively by the firms themselves.