Posts Tagged: "march-in rights"

One thing you should never say in 2020 is: “Well, at least things can’t get any worse.” They can and often do. The latest exhibit—in the intellectual property space at least—is a letter to Health and Human Services (HHS) Secretary Azar, National Institutes of Health (NIH) Director Collins and Food and Drug Administration (FDA) Commissioner Hahn authored by California Attorney General Xavier Becerra and Louisiana Attorney General Jeff Landry. It’s also signed by 32 other state attorneys general, along with those representing the District of Columbia, Guam and American Samoa. They are demanding that the government use its authorities under the Bayh-Dole Act to march in against Gilead Sciences, the maker of the COVID-19-fighting drug remdesivir, so that it can be made more widely available at a lower cost.

With two-thirds of the world in lockdown and no clear way out of the novel coronavirus crisis, it’s increasingly obvious that biopharmaceutical innovation will play a pivotal role. A new treatment that can mitigate the worst effects of COVID-19, and ultimately a preventative vaccine, could, literally, save the world. Such life-saving technology is less likely to be forthcoming if, in their panic, governments sacrifice intellectual property (IP) rights for new COVID-19 therapeutics and vaccines. The signs are not promising. IP-skeptic governments in Chile and Ecuador have taken preemptive measures by permitting compulsory licensing of any new COVID-19-related technology. Otherwise innovation-friendly Canada and Germany have passed legislation to issue compulsory licenses more easily. Even in the United States—the center of modern biopharmaceutical innovation and a major player in ongoing COVID-19 research and development (R&D) efforts—there is pressure to break patents.

Next year marks the 40th anniversary of the passage of the Bayh-Dole Act. With election day looming, 2020 is likely to be the most politically contentious year of our lifetime. The country is divided right down the middle on many fundamental issues. Rather than debate, the opposing sides often descend into personal attacks, even questioning one another’s patriotism. This isn’t the time you want issues you care about dragged into the public arena, but patent rights and the Bayh-Dole Act have been summoned into the gladiator pit. Happy birthday, indeed.

A just-released study co-sponsored by the Biotechnology Innovation Organization (BIO) and AUTM provides new evidence of the significant contribution academic patent licensing makes to the U.S. economy. The report is the most recent in a series, and the numbers are astounding. This couldn’t come at a better time. Renewed efforts are underway to subvert Bayh-Dole from an engine driving innovation into a weapon for government price controls. Even though the Bush, Obama and Trump Administrations wisely rejected their theories, the critics keep banging the drum, and some in Congress are dancing to their tune.

Recently, Knowledge Ecology International sent to Congress a letter objecting to the draft “Green Paper on Unleashing American Innovation” disseminated by the National Institute of Standards and Technology (NIST) in December, 2018. The KEI letter was signed by 10 other organizations* (the Organizations). The letter, unfortunately, is full of misstatements, distortions, falsehoods and disingenuous arguments. It would be easier to focus on the letter’s one accurate statement:  that high drug prices are a serious concern for people everywhere. It is very unfortunate that KEI, in my opinion, utilizes tactics which continually sacrifice fair and constructive dialog in favor of apparently achieving goals “by any means necessary.” The most disturbing element of the letter is KEI’s advocacy of inappropriate and unjustified use of government march-in rights under the Bayh-Dole Act as a purported means of controlling drug prices. In doing so KEI and the Organizations are threatening medical advances and thereby undermining their own missions.

The National Institute of Standards and Technology recently indicated in its “Return on Investment Initiative draft green paper” that it would issue regulations effectively ending attempts to misuse march-in rights to assert government price controls over successfully commercialized federally-funded inventions. Such an announcement was bound to elicit a reaction. That it came in The Washington Post shouldn’t be a surprise. The paper’s April 18 article, “A rare deterrent to limitless drug price increases may die under Trump” gives coverage to both sides, but the takeaway is that something nefarious is underway: “As drug prices have soared, lawmakers and patient advocates have pushed the federal government to deploy for the first time a powerful deterrent: a legal provision that allows it to suspend a drugmaker’s patent and license someone else to produce the drug. Now, responding to industry alarm over those demands, the Trump administration is proposing to strictly limit the little-known power,” said the article. There’s a reason why this “little-known power” has never been used—it doesn’t exist.

The original motivation for the Bayh-Dole Act was to encourage the commercialization of academic innovation so that new technologies could be available for the benefit of all. Yet today, I feel compelled to call attention to a compliance landscape that is significantly different than that of the past four decades—one that could have dire consequences for institutions if they choose to be complacent. Not only do sponsoring agencies have an interest in how tech transfer complies with Bayh-Dole regulations, other entities have entered the competitive landscape looking for opportunities to turn lack of compliance to their advantage. In just the past two years we’ve seen a spike in requests for the government to exercise march-in rights by a variety of non-governmental advocacy groups (NGOs). These NGOs are staffed by PhDs who are well-versed in the academic tech transfer ecosystem and they actively seek out pockets of non-compliance. An attempt is then made to extricate key technologies using non-compliance as a lever and the NGOs become the primary influence on how innovation is put into the marketplace. I would ask the question, “Who will pick up on these inventions?” If you follow this chain of events we may find ourselves in a situation where innovation is not freely available to all (the original intent of Bayh-Dole) but an endpoint where NGOs and their backers control how technologies get into the marketplace.

In July 2012, the U.S. Food and Drug Administration (FDA) first approved Truvada, an acquired immunodeficiency syndrome (AIDS) treatment manufactured by Gilead Sciences as a daily pre-exposure prophylactic (PrEP) treatment to reduce the risk of contracting human immunodeficiency virus (HIV) in sexually active individuals. Recently, this HIV PrEP treatment and its patent have been thrust into the spotlight thanks to a commercial for Truvada that Gilead ran during the January 27 broadcast of Rent: Live on the Fox television network. While many were encouraged by the fact that a national TV network was raising awareness about PrEP treatment, the commercial sparked a return to a debate over the high price of Truvada. As of June 2018, news reports indicated that once-daily Truvada treatment cost about $1,500 per month, or around $18,000 per year. Although the cost of Truvada is often covered by health insurance, the treatment hasn’t been adopted as widely as was expected when the drug was approved. Between January 2012 and March 2014, a review of half of U.S. pharmacies by Gilead showed that only 3,253 had begun a PrEP regimen during that time, far less than the estimated 500,000 people who would make good candidates for Truvada. That number has expanded rapidly to 77,120 U.S. PrEP users in 2016 and an estimated 136,000 users by the end of 2017’s first quarter, but that’s still far short of the estimated 1.2 million American adults at high risk of HIV infection who could benefit from PrEP. “Based on feedback from partners and our work in the field, we believe that one of the greatest barriers to Truvada for PrEP access today is limited awareness of Truvada for PrEP’s role in HIV prevention,” Gilead told IPWatchdog. “Data from our patient support programs do not suggest that cost is a primary obstacle to treatment. The majority of people receiving Truvada for PrEP today who utilize our co-pay coupons pay less than $5 per bottle.”