When the Biden Administration unleashed its proposed march-in guidelines last December, it claimed they would be a powerful tool for lowering drug prices by allowing the government to “march in” to license copiers under the authorities of the Bayh-Dole Act.
It did so despite previously joining every other Administration denying price control petitions as not authorized under the law. It should have known the proposal would have minimal impact on drug prices—but would have a devastating impact on American innovation. That’s because the guidelines apply to all federal R&D agencies—not just the National Institutes of Health — so they cover inventions across the spectrum, not just the life sciences.
Now the chickens are coming home to roost. Three Congressional letters illustrate the point.
Those who browbeat the Administration into going out on this limb now say they haven’t gone far enough and need to also seize privately funded inventions. Others are speaking out against the guidelines as their predicted damage to American innovation is becoming evident.
Letter #1: Taking it Further
Two letters illustrating the debate issued the same day. On February 6, 2024, a number of progressive Democrats joined Senator Elizabeth Warren (D-MA) and Rep. Lloyd Doggett (D-TX) asking the Administration to make the guidelines even harsher. While the proposal provides no definition of what constitutes a “reasonable price” justifying the government marching in, they suggest a laundry list of possibilities, including the price charged to the government versus those in the commercial market, prices of similar products, prices charged in comparable wealthy countries, or prices charged for similar products. Of course, since the law never contemplated such actions, all of these are purely arbitrary.
But the real nugget was buried at the end. Those seeking to misuse Bayh-Dole for imposing government price controls on drugs know that it alone will have little impact. That’s because the vast majority of patents needed to copy most drugs are created by the private sector and are not susceptible to march in rights, which only cover inventions made with federal support.
Their solution: the government should also misuse the authorities of Sec. 1498 to seize privately funded patents as well:
“It is imperative that the Administration protect these investments and access to critical innovations by exercising its clear statutory authority, which also includes licensing authority on all patents using Section 1498 and the use of royalty-free rights. Not only does the framework fail to mention separate authorities, it dismisses their use by encouraging agencies not to exercise march-in rights ‘if only one of several patents necessary to produce a product is subject to march-in.’
When issuing the final framework, we strongly urge you to include a directive to agencies to review all federally funded inventions under their purview within six months and determine whether to use march-in rights, either solely or in conjunction with Section 1498 and/or royalty-free rights.”
Click here to read the entire article via ipwatchdog.