“The GIPC argued in a June blog post that the march-in proposal would lead to a ‘stark decline in the creation of pioneering American technologies, products, and services.’”
As the IP community waits for movement on the Biden Administration’s proposal to expand the scope of the march-in rights provision under the Bayh-Dole Act, the U.S. Chamber of Commerce’s Global Innovation Policy Center (GIPC) has been actively countering the administration’s argument that such a mechanism would effectively lower drug prices.
The comment period for the National Institute of Standards & Technology (NIST) and the Department of Commerce’s Request for Information (RFI) on the proposal closed in early February. Since then, it has been rumored several times that the framework would be finalized and published, but those rumors never materialized.
Under the proposed framework, an agency may consider “[a]t what price and on what terms has the product utilizing the subject invention been sold or offered for sale in the U.S.” and whether “the contractor or licensee [has] made the product available only to a narrow set of consumers or customers because of high pricing or other extenuating factors”.
In its latest blog post, published today, the GIPC’s Vice President, Patents and Innovation Policy, Brad Watts, provided an overview of the march-in rights provision and its historical purpose. The post reiterates what IPWatchdog columnist Joe Allen of the Bayh-Dole Coalition has explained here numerous times–i.e., that the chief goal of the provision was to ensure that federally-funded inventions were commercialized. Every petition over the last 20 years requesting that the government march in due to pricing concerns has been rejected by both Democratic and Republican Administrations as unwarranted, Allen has noted.
For example, just one day before comments closed on the proposal in February, the Department of Health and Human Services (HHS) denied an appeal of a decision not to march in on the blockbuster prostate cancer drug, Xtandi®.
Furthermore, many argue that the framework is misguided in its intent. “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,” Allen wrote in a February article for IPWatchdog. A letter sent by a number of progressive congress members in February seemed to implicitly accept this view in its call to add to the framework authority for agencies to invoke Section 1498, which would cover all patents, when deciding which patents to march in on.
The comments submitted in response to the RFI included broad bipartisan opposition. Many of those noted that the Act’s authors, Senators Birch Bayh and Bob Dole explicitly refused to include pricing as a march-in rights trigger.
But the Federal Trade Commission (FTC) commented in response to the RFI that the proposed framework would make “operational previously unutilized statutory provisions” of the Bayh-Dole Act and that a more flexible approach supports “the reasonableness inquiry required by the statute” because “it is deeply fact-intensive” and “agencies should be wary of imposing categorical limitations on the factors that can be considered for march in, such as price.”
The GIPC argued in a June blog post that such logic is “overreach” that would chill “private sector innovation and investment as companies retreat from university partnerships amidst growing unpredictability.” This would in turn lead to a “stark decline in the creation of pioneering American technologies, products, and services.”
IPWatchdog has heard that there is little information being shared as to the status of the proposal. With the comment period having closed six months ago now, it is possible the administration is waiting to release the framework in conjunction with the Democratic platform during the upcoming Democratic National Convention. It is also possible the staunch opposition from sectors including the generics industry, a bipartisan coalition of former leaders of the United States Patent and Trademark Office (USPTO) and NIST; university research institutions; has caused the administration to rethink or significantly revise the framework before finalizing it.
