Public Comments Reveal Widespread Unity in Opposition to NIST’s March-In Rights Framework

“Recommending a complete and timely recission of the framework, these groups point out that the proposal creates legal uncertainty for the patent rights that these universities want to license to industry partners.”

march-inFebruary 6 is the final day of the 60-day public comment period set by the National Institute of Standards and Technology’s (NIST) request for information on its draft interagency framework for exercising march-in rights under the Bayh-Dole Act of 1980. While lauded by drug pricing advocates, almost every other sector of the American economy has come out in opposition to the draft framework. Senator Thom Tillis (R-NC), the U.S. Chamber of Commerce and the Bayh-Dole Coalition have all publicly opposed NIST’s efforts to exercise legal authority for relicensing patent rights based on product pricing considerations.

A review of other public comments submitted to NIST provides an even starker view of the widespread opposition to the draft framework across almost every sector of the U.S. economy. From former Executive Branch officials to university networks, many stakeholders are expressing grave concerns about the likely impacts of the Biden Administration’s efforts to use march-in rights as a drug pricing control.

Former Commerce Secretaries, USPTO Directors and NIST Directors in Opposition

In a letter dated February 2, a coalition of nine former high-ranking Executive Branch officials serving in the administrations of former Presidents George W. Bush, Barack Obama and Donald J. Trump “emphasized in the strongest possible terms” that “the proposed [march-in rights] framework poses a major threat to American prosperity.” Tracing back to the Clinton Administration, these former government officials note that every U.S. President, including Joseph Biden, previously concluded that the Bayh-Dole Act did not give the Executive Branch proper authority to order the relicensing of patent rights based on commercial pricing.

Indeed, there is no doubt that march-in rights were never supposed to be used as a price control, according to these former Commerce Department Secretaries and Directors of either NIST or the U.S. Patent and Trademark Office (USPTO). This is evidenced not only by statements from original draftees former Sens. Birch Bayh and Robert Dole, but also by Congress’ refusal to amend Bayh-Dole in the late 1990s to add product pricing as a march-in rights trigger. Further, the former Executive Branch officials note that march-in rights have also been unnecessary for access to lifesaving treatments during past emergency public health situations, even during the 2001 anthrax scare.

American Universities, Medical Colleges, Technology Managers and Research Institutions in Opposition

A letter dated February 1 from the Association of American Universities, the Association of Public and Land-grant Universities, the Association of American Medical Colleges and several other higher education associations raised a series of key points in opposition to the interagency draft framework proposed by NIST. Recommending a complete and timely recission of the framework, these groups point out that the proposal creates legal uncertainty for the patent rights that these universities want to license to industry partners. These groups expect the framework to have a detrimental and destabilizing effect on tech transfer efforts at all research institutions.

Although both groups joined the February 1 letter, both the Association of University Technology Managers (AUTM) and the Council on Government Relations (COGR) each wrote separate comments to raise issues particular to their efforts. AUTM’s letter notes that several federal agencies, including the National Institutes of Health, the Department of Health and Human Services, and the Department of the Army, have historically and repeatedly clarified that product pricing is not a consideration for exercising march-in rights under Bayh-Dole. AUTM also argues that the march-in rights framework will press industry partners to enter non-exclusive licenses with fewer development and commercialization obligations. COGR’s letter points out that almost every pharmaceutical is covered by several patents not subject to Bayh-Dole, limiting the government’s ability to use march-in rights to control pricing.

Former FTC General Counsel Alden Abbott in Opposition

In a letter dated February 2, Alden Abbott, Senior Research Fellow at George Mason University’s Mercatus Center, added his voice to the chorus calling upon NIST to withdraw the draft interagency framework on march-in rights. Formerly General Counsel at the Federal Trade Commission (FTC), Abbott urged NIST that the negative repercussions of exercising march-in rights based on product pricing upon market competition cannot be overstated. These negative impacts are exacerbated by massive federal funding packages earmarked by recent legislation, including the $52 billion in appropriations included in the CHIPS and Science Act. NIST’s proposed framework would chill private investment in exactly those critical tech sectors the CHIPS and Science Act meant to advance, including quantum computing, clean energy and artificial intelligence.

Carolyn Whitlock of Monmouth Junction, NJ, in Support

The vast majority of comments supporting NIST’s interagency draft framework were short statements from private individuals, many of whom submitted their views anonymously. However, a comment dated January 4 and submitted by Carolyn Whitlock of Monmouth Junction, NJ, provided more thoughtful counterpoints than most comments from private individuals, many of which were understandably informed by family medical situations.

Acknowledging arguments that non-exclusive licensing will lessen investment into R&D, Whitlock contended that R&D operations overall have reduced in recent years due to the length of patent terms and “generous permissions surrounding drug reformulations.” Although reformulations of drugs like insulin have improved treatment results over time, Whitlock believed that it would be possible for the government to maintain exclusive patent access for revolutionary drugs “while expanding march-in access as a way to discourage companies resting on their laurels.” Whitlock added that, while it wasn’t within the scope of the draft proposal, she preferred a government as last-resort producer approach instead of using march-in rights to encourage generics, which could lead major companies to exit drug markets due to lower profit margins.

Image Source: Deposit Photos
Author: kchungtw
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2 comments so far.

  • [Avatar for Kelly Morron]
    Kelly Morron
    February 7, 2024 07:57 am

    I am an IP professional and have been following Bayh-Dole since its inception. I submitted comments criticizing the three proposed regulations in 2021, and submitted Comments critical of NIST’s proposed “framework” adopting failed proposal sec. 401.6(e) this round. I founded my criticisms on the legal failings of the proposal, including relying on a rejected proposal, relying on regulations that are void for lack of due process, pointing out numerous ambiguities, failure to incorporate any of the agency determinations which flatly rejected pricing as a basis for the analysis, and I also point out that the NIST framework is so confusing, it even failed to include two portions of the “framework” for “Criterion 1” (35 USC sec 203(a)(1)) one of which it considered critical, and none of the reviewing agencies picked up on it. I also note that numerous of the comments (of the 550/51500 that have been publicly posted) reflect misunderstandings of the purpose and effect of the RFI. Having transmitted my Comments on 2/4/24, it has not yet been posted.

  • [Avatar for Anon]
    Anon
    February 6, 2024 08:28 am

    Any sense of FORCED innovation – in reply to arguments about “resting on their laurels” GRAVELY misunderstand humanity.

    I fully “get” the notion that Big Pharma plays the system to their monetary benefit – but THAT path is exactly the wrong path to go down.

    THAT path is nothing more than the sheepskin of “for people’s good” under the authoritarianism of FORCED Altruism.

    FAR FAR BETTER – simply drag the entire ecosystem and ALL paths of money flow into the light.

    Once people and all people can see how the money flows, THEN informed opinions can be better formulated, and abject authoritarianism need not be implemented – For ANY ‘noble Ends.’