“Apparently, [opponents of Bayh-Dole] thought that the fourth time would be the charm. Now, they know better. And this time, NIH included a subtle, but fatal blow to attempts to go down this path again.”
Perhaps after their favorite theory was blown apart again, as it has been every time it’s been trotted out over the past 20 years, the critics of the Bayh-Dole Act learned a painful lesson. Their carefully constructed thesis that the law contains a hidden provision allowing the government to set prices on successfully commercialized products has been summarily rejected by every Democratic or Republican Administration which has considered it.
They say the definition of insanity is doing the same thing repeatedly while expecting a different result. But that didn’t keep the proponents from refiling the same petition which was rejected three times in the Obama-Biden Administration. So once again, the National Institutes of Health (NIH) denied the request that it should “march-in” under the law against the prostate cancer drug, Xtandi, because critics felt it is not “reasonably priced.”
Apparently, the petitioners thought that the fourth time would be the charm. Now they know better. And this time, NIH included a subtle, but fatal blow to attempts to go down this path again.
NIH: No March-In for You
Yet again, on Tuesday, March 21, NIH found that the criterion under the law is whether a product based on a federally funded invention has been successfully commercialized. There is nothing that gives the government the authority to “march in,” forcing the university patent owner to license other companies, just because someone doesn’t like a product’s price.
Here’s what NIH said, with a key phrase emphasized:
NIH’s analyses in response to the petition request have found Xtandi to be widely available to the public on the market. In addition, given the remaining patent life and the lengthy administrative process involved for a march-in proceeding, NIH does not believe that use of the march-in authority would be an effective means of lowering the price of the drug. For these reasons, NIH has determined that initiation of a march-in proceeding is not warranted in this case.
This decision is consistent with NIH’s determination in 2016, in which KEI and the Union for Affordable Cancer Treatment requested NIH and the Department of Defense march-in based on the price of Xtandi, but each declined. In responding to the march-in request for Xtandi in 2016, NIH explained that, consistent with march-in determinations for Cell Pro (1997), Norvir (2004, 2013) and Xalatan (2004), practical application is evidenced by the “manufacture, practice, and operation” of the invention and the invention’s “availability to and use by the public….”
Astellas, the maker of Xtandi, estimates that more than 200,000 patients were treated with Xtandi from 2012 to 2021.Therefore, the patent owner, the University of California, does not fail the requirement for bringing Xtandi to practical application, as the drug is manufactured and on the market in the manner of other prescription drugs (emphasis added). NIH has reviewed the information submitted by the current petitioners, which is substantially the same as that submitted in 2016, and reached the conclusion that Xtandi is still widely available as a prescription drug.
Note that NIH said the patent owner, the University of California, not Astellas, the developer, had met the requirement of bringing the invention to practical application. That’s a key distinction.
As we have pointed out many times before, unlike the three other march-in triggers, the first – which says that good faith efforts are being made to achieve practical application of the invention – only applies to the patent owner, not the licensee.
“Practical application” is partly defined as making sure the invention is “available to the public on reasonable terms.” Twenty years after enactment, critics seized on “reasonable terms” to mean “reasonably priced” and launched a series of unsuccessful petitions for the government to march in against several drugs because they didn’t like their price. Every such request has been appropriately denied.
If the intent of the law had been to include “reasonable pricing” this provision, like the other triggers, would have included the licensee, who sets the price. What the language actually refers to is a requirement that the academic patent owner license on reasonable terms and monitor the licensees’ efforts toward bringing the invention to practical application.
NIH correctly underscores the meaning of the statute very elegantly in language which may be passed over by the casual reader. But it’s a dagger to the heart of the critics’ cherished theory.
What made the NIH decision even more painful to those seeking to weaken the Bayh-Dole Act is that while the march in petition had been pending for over a year, the ruling came out just before the long anticipated hearing of Senator Bernie Sanders’ Health, Education, Labor and Pension (HELP) Committee designed to beat up on Moderna for the price of its COVID vaccine in commercial sales.
It was expected that Chairman Sanders was going to wield the threat of march in rights against Moderna. Instead, the only mention of the Bayh-Dole Act came from Republican Senators praising the law for its contribution in meeting a dire national pandemic. It’s not certain if the NIH decision took the wind out of Sanders’ efforts, but the hearing was largely drained of its anticipated drama.
A Potential Battle Ahead
While the NIH determination was a resounding victory for the Bayh-Dole system, one storm cloud appeared on the horizon. As it was releasing its decision, the Department of Health and Human Services along with the Department of Commerce, which oversees Bayh-Dole, announced the formation of a “whole of government” Interagency Working Group for Bayh-Dole to “develop a framework for implementation of the march-in provision that clearly articulates guiding criteria and processes for making determinations where different factors, including price, may be a consideration in agencies’ assessments.”
Who knows what that means. But the bottom line is that Bayh-Dole survived another critical test. There are undoubtedly more battles ahead, but let’s take a minute to savor a crucial victory.
Let’s not forget to thank the stalwart folks at NIH who stood up to incredible political pressures to preserve a vitally important law. If we had more public servants like that, the nation would be a lot better off.
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2 comments so far. Add my comment.
LoozapMarch 23, 2023 06:07 pm
He’s such a good player
Pro SayMarch 23, 2023 01:57 pm
Bravo NIH. Bravo.
Bayh-Dole has been an unqualified, unquestionable boon to life-saving innovations.
You don’t mess with masterpieces.
If only we’d been able to keep SCOTUS’ and the CAFC’s hands off our formally-gold-standard patent system.
Imagine where America could be today.