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As NIST Finalizes March-in Guidance, Innovation Community Continues to Convey Opposition

The National Institute of Standards and Technology (NIST) may soon finalize its controversial proposal to expand the scope of the government’s exercise of so-called “march-in rights” under the Bayh-Dole Act in a misguided attempt to address prescription drug prices.

 

When the agency initially proposed the guidance late last year, a chorus of stakeholders from across the scientific and patient advocate communities submitted public comments urging the government to reverse course. NIST received over 50,000 comments during the 60-day comment period, and according to our analysis of the responses the agency received, the overwhelming majority of organizations that weighed in were against it.

 

Of the 50,000, more than 34,000 of those were form or templated comments, while 241of the comments were from a wide variety of organizations representing the millions in America engaged in public and private research or directly benefitting from the products that result. Of those 241, an overwhelming majority were in opposition to the proposal and merely 9 were in support. Those opposing the proposal include patient groups, individual universities and organizations representing universities, medical research groups, chambers of commerce, labor groups, investors, and biomedical industry organizations. We Work for Health is among the many organizations sharing comments opposing the proposed changes to march-in rights.

 

The Bayh-Dole Act was passed in 1980 to ensure that universities and research institutions receiving federal funds could patent and license innovations to make them available to the public. The law fostered a process known as “technology transfer” which ensured these discoveries could be further researched and developed by the private sector to transform them into useful products. Prior to the enactment of Bayh-Dole, the government retained the patents on federally funded inventions and only 5% of those patents were ever licensed for use in the private sector. As a result, not a single medicine had been further developed utilizing patents generated with government funding. But in the more than 40 years since the law was enacted, more than 200 new medicines have been brought to patients because of the technology transfer process established by the law.

 

Bayh-Dole Act includes a right for the federal government to “march-in” in order ensure innovations that were developed with federal funds actually made it to market by allowing the federal government to re-license a patent if it wasn’t determined to be commercially available.

However, the Biden Administration’s proposed new march-in framework, enables the government to march-in on a product based on price, representing a major departure from Bayh-Dole’s intended purpose and, as hundreds of stakeholders have highlighted, poses a grave danger to the future of American innovation.

 

The law’s authors, Senators Birch Bayh and Bob Dole, have affirmed this intent noting they “did not intend that government set prices on resulting products.” In fact, the law makes no reference to a reasonable price that should be dictated by the government” and that “omission was intentional; the primary purpose of the act was to entice the private sector to seek public-private collaboration rather than focusing on its own proprietary research.”

 

Among the concerns cited by commentators in opposition to the proposal include the threat that weakening IP protections would harm the future of American. Further, many noted that research shows only a very small minority (~8%) of FDA-approved medicines have received any amount of public funding. And of those, an even smaller cohort (1%) would even be eligible to be “marched-in” upon (learn more here from Vital Transformations).

 

Therefore, while the impact of the proposal would affect a very small proportion of drugs the detrimental effect it would have on future innovation would be devastating as it would discourage the collaboration as was intended under Bayh-Dole. Stakeholders highlighted the “chilling effect” that changing the rules on march-in rights would have on future innovation – and that these consequences would extend far beyond the life sciences sector. Any industry which depends on intellectual property – from information technology to clean energy – would be affected.

 

To learn more about the importance of protecting intellectual property and the consequences of the federal government invoking march-in rights, check out our latest One-Pager, Fact Sheet, and guide to common Myth vs Facts about march-in rights.

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