www.biopharminternational.com October 2021 eBook BioPharm International 29
emphasized restriction of march-in rights
for the reasons set forth in the statute:
to require agency factfinding to support
need for third-party licenses; and con-
duct limited to the contractor/assignee
(because it is their rights that are at issue).
BIO cites its own statistics, including
that "prior to the enactment of the Bayh-
Dole Act, less than 5% of the federal
government's nearly 30,000 patents had
been licensed for commercial develop-
ment" (9). While citing AUTM's sta-
tistics (10), BIO also asserts that "[o]ur
review of FDA data indicate that more
than 60% of new FDA approved drugs
now originate from small emerging bio-
pharma companies" and "[as] a result,
biopharmaceutical companies invested
nearly $165 billion in research and devel-
opment compared with the [National
Institutes of Health] NIH budget of
just $33 billion." Moreover, BIO states
in their comments that "between 1996
and 2017, [technology transfer under the
Bayh-Dole Act] led to the development
of more than 200 new drugs and vac-
cines, $865 billion in added GDP, 5.9
million jobs, and more than 13,000 start-
ups." Like AUTM, BIO has three spe-
cific recommendations for the final rule:
• " F i r st , t he prop o s e d r u le at
new CFR §401.6.(a)(2) should
make clear that the initiation of
ma rch-in proceed ings w i l l be
based specifically and exclusively
on one or more of t he fou r
enumerated grounds under 35
USC §203(a)(1)-(4)."
• "Second, the proposed rule should
ma ke c lea r t hat t he requ isite
agency determination under one
or more of paragraphs (1)-(4) of
35 USC §203(a) shall include fact-
findings sufficient to establish that
a third-party license is necessary
to achieve the objective of the
applicable paragraph."
• "Third, the proposed rule should
ma k e c le a r t h at a ma rc h-i n
determination under 35 USC
§203(a)(1) may be based only on
conduct that is attributable to the
contractor or assignee, whereas a
determination under 35 USC
§203(a)(2)-(3) may additionally
be ba sed on conduc t t hat is
attributable to the licensee."
Many of the comments to the con-
trary recognize the march-in rights provi-
sions of the Bayh-Dole Act as an avenue
to address increasing drug pricing. For
example, 35 congressmen and senators
wrote a letter (11) to NIST opposing
the proposed rule by equating reasonable
licensing terms with "reasonable" prices.
The letter sets forth many of the argu-
ments made by other opponents of the
law, including that "[b]y financing phar-
maceutical research, taxpayers earn the
right to obtain affordable access to the
resulting medication" and "[m]anufactur-
ers are enabled to earn billions exploiting
the sick and dying with sky-high prices
on taxpayer-funded inventions." The
letter equates (inaccurately) Bayh-Dole
march-in rights to compulsory licensing,
and the fantasy that "[t]he patentholder
receives a fair royalty and consumers
receive fair access to essential medicines."
CONCLUSION
NIST's final rule will depend not only
on the persuasiveness of the comments
but also on any policy differences that
may result from the proclivities of the
Biden Administration compared with the
Trump Administration (both the Green
Paper and the current proposals being the
product of the latter). Drug pricing issues
have been extant for many years and were
at least putatively of a concern during the
Trump years, but then President Trump's
rhetoric did not match his adminis-
tration's proposals. There is certainly a
penchant under the current regime for
government intervention on drug prices,
but as can be discerned by the comments
the issue is not the regulatory language
per se but how those regulations are
applied. Moreover, the proposed regula-
tions are not limited to drug prices, which
has prompted other groups (like the US
Chamber of Commerce) to oppose any
changes that would facilitate application
of the march-in rights provisions of the
Bayh-Dole Act to permit the Federal
government to use these provisions to
impose price controls (by way of com-
pulsory or other third-party licenses) on
patented products. While the major-
ity of the comments oppose this use of
march-in rights, the political pressure
caused by drug prices may result in at
least some steps at price control using the
threat of government intervention being
attempted, no matter how ill-advised this
action may appear.
REFERENCES
1. NIST, "Rights to Federally Funded
Inventions and Licensing of
Government Owned Inventions,"
Notice of Proposed Rulemaking,
Federal Register, 86 FR 35, 35–44.
2. USC, Title 35, Chapter 18 –Patent
Rights in Inventions Made with
Federal Assisance.
3. CFR Title 37, Parts 400 et seq.
4. NIST, Return on Investment
Initiative to Advance the President's
Management Agenda, Green Paper,
April 2019.
5. NIST, "Rights to Federally Funded
Inventions and Licensing of
Government Owned Inventions,"
regulations.gov, accessed Aug. 11,
2021.
6. Conservatives for Property Rights,
"Comments of the Conservatives
for Property Rights coalition
regarding Notice of Proposed
Rulemaking "Rights to Federally
Funded Inventions and Licensing of
Government Owned Inventions,"
regulations.gov, accessed Aug. 11, 2021.
7. AUTM, "AUTM's Comments on 37
CFR Parts 401 and 404 (Docket ID
Number: 201207-0327)," autm.net,
accessed Aug. 17, 2021.
8. BIO and AUTM, The Economic
Contribution of University/Nonprofit
Inventions in the United States: 1996–
2017, Report (June 5, 2019).
9. GAO, Administration of the Bayh-Dole
Act by Research Universities, Report
(May 1998)
10. AUTM, Driving the Innovation
Economy, Infographic (2018).
11. Congressman Lloyd Doggett,
"Bicameral Effort to Stop Proposed
Rule Undermining Long-Standing
Tool to Restrain Price Gouging for
Taxpayer-Funded Drugs," Press
Release (March 29, 2021).
BP
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