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Department of Health research arms, discovered that a particular compound isolated from the Pacific Yew tree had particularly powerful anti-cancer properties. The discovery was ultimately turned over Bristol Myers Squibb for development into a cancer treatment. Not only was the drug ultimately successful, it became one of the largest forms of chemotherapy available for cancer. In other words, it earned billions of dollars for Bristol Myers Squibb (BMS).

Unfortunately, not only did the taxpayer loose out completely on fair returns from the research investment, BMS aggressively pursued those trying to challenge the taxol product AFTER THE PATENT EXPIRED.
The following is from a wikipedia entry related to the episode [1]. It is from a consent decree signed by BMS as part of an investigation into the Taxol product.

(BMS) engaged in a series of anticompetitive acts over the past decade to obstruct the entry of low-price generic competition for three of Bristol's widely-used pharmaceutical products: two anti-cancer drugs, Taxol and Platinol, and the anti-anxiety agent BuSpar. [...] Bristol avoided competition by abusing federal regulations in order to block generic entry; deceived the U.S. Patent and Trademark Office (PTO) to obtain unwarranted patent protection; paid a would-be generic rival over $70 million not to bring any competing products to market; and filed baseless patent infringement lawsuits to deter entry by generics.

So the point here is that the National Cancer Institute ( of the NIH ) sponsored and discovered taxol, gave the patent to Bristol Myers Squibb, and BMS subsequently admitted to unfair practices related to that product. A much better way for the NIH to have managed the Taxol discovery would have been to have patented it themselves and then licensed the use of the product to interested drug manufacturers. That would have potentially better served both t he interest of the taxpayer and cancer sufferers who were intended to benefit the most from the National Cancer Institute Study.

More recently, a particularly horrific example of the consequences of blurring the line between public and private interest has been revealed to the public eye. In July 2008, the FBI revealed the case against Dr. Bruce Ivins of the United States Army Medical Research Institute of Infectious Diseases ( USAMRIID ). In the year of the 9/11 attack on New York City, Ivins was consulting on problems relating to the manufacture of an anthrax vaccine ( AVA ) made by BioPort

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