[Ip-health] March-in rights

Michael H Davis m.davis at csuohio.edu
Mon Jul 13 09:50:54 PDT 2015

In almost all those cases the government failed to correctly read the Act. March in is justified if the price is unreasonable, according to the Statute. It need not be in shortage nor does it help that the defendant shows the drug is available.The statute is clear that practical application means reasonable terms, not reasonable application nor reasonable availability.


Prof. Mickey Davis
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-------- Original message --------
From: George Carter <gmcfiar at gmail.com>
Date: 07/13/2015 2:01 PM (GMT+01:00)
To: Ip-health <ip-health at lists.keionline.org>
Subject: [Ip-health] March-in rights

Should we petition the government, venal as it is, to exercise march-in against Gilead?
Not sure there is a case, if Pharmasset is a small business as the originator, tho NIH clearly helped. But as in the case of ritonavir, NIH is so corrupt and blind they said no. However, sofosbuvir is a different matter.

These urls are of some interest:


and from Wiki

Petitions for march-in rights

The government's march-in right is one of the most contentious provisions in Bayh-Dole. It allows the funding agency, on its own initiative or at the request of a third party, to effectively ignore the exclusivity of a patent awarded under the act and grant additional licenses to other "reasonable applicants." This right is strictly limited and can only be exercised if the agency determines, following an investigation, that one of four criteria is met.[24] The most important of these is a failure by the contractor to take "effective steps to achieve practical application of the subject invention" or a failure to satisfy "health and safety needs" of consumers.

Though this right is, in theory, quite powerful, it has not proven so in terms of its practical application —as of January, 2015, no federal agency has exercised its march-in rights. Five march-in petitions have been made to the National Institutes of Health.

In In Re Petition of CellPro, Inc.,[25] CellPro petitioned the NIH in March 1997 after five years of patent litigation with The Johns Hopkins University and Baxter Healthcare. CellPro had a patented, FDA-approved device for purifying stem cells for use in hematopoietic stem cell transplantation procedures; Johns Hopkins had patents on a different method to purify stem cells and had licensed them to Becton Dickinson, which had sublicensed them to Baxter, which was developing products but had none on the market. CellPro argued that the march-in provisions were created for this situation, especially because (in its view) availability of essential medical technology was at stake. The NIH denied this claim[26] citing:

Johns Hopkins's licensing of the subject invention
Baxter's use, manufacturing, and practice of the subject invention
Baxter's application to the Food and Drug Administration (FDA) to market the invention
The actual clinical benefit of purifying stem cells for use in hematopoietic stem cell transplantation was unknown
Government intervention into markets has adverse effects and there is insufficient cause to do so in this case.
In In the Case of NORVIR, the NIH received requests[27] from Essential Inventions in January 2004, and other members of the public and members of the United States Congress,[28] to exercise march-in rights for patents owned by Abbott Labs covering the drug ritonavir, sold under the trade name Norvir, a prescription drug used in the treatment of AIDS. In 2003 Abbott raised the price of Norvir 400% for U.S. customers (but not for consumers in any other country), and had refused to license ritonavir to another company for purposes for providing protease inhibitors coformulated with ritonavir.[29] The NIH denied the petition finding no grounds to exercise its march-in rights.[28] The NIH cited:

The availability of Norvir to patients with AIDS
That there was no evidence that health and safety needs were not adequately met by Abbott, and
That the NIH should not address the issue of drug pricing, only Congress.
In In the Case of Xalatan the NIH received a request[30] from Essential Inventions in January 2004 to adopt a policy of granting march-in licenses to patents when the patent owner charged significantly higher prices in the United States than they did in other high income countries, on the basis of Pfizer's glaucoma drug being sold in the United States at two to five times the prices in other high income countries. The NIH held that “the extraordinary remedy of march-in was not an appropriate means for controlling prices.”[31]

In In the Case of Fabrazyme[32] patients with Fabry disease petitioned on August 2, 2010, for march-in rights in response to Genzyme's inability to manufacture enough Fabrazyme to treat all Fabry patients. In 2009, Genzyme rationed the drug to less than a third of the recommended dose as a result of manufacturing problems and FDA sanctions, but did not anticipate being able to meet the market needs until late 2011. The patients had a return of their symptoms and were put at greater risk of morbidity and mortality at the reduced dosage. The petitioners contended that where a licensee of a public invention has created a drug shortage, the public health requirements of the Bayh–Dole Act are not met and other manufacturers should be allowed to enter the market.

On November 3, 2010, the NIH denied the petition for march-in, stating that under the then-current FDA drug approval process, it would take years of clinical testing to bring a biosimilar of Fabrazyme to market and therefore march-in would not address the problem.[33] The NIH also stated that it would continue to monitor the situation and if Genzyme could not meet its production deadlines, or if a third party licensee requested a license, the march-in request would be revisited. The NIH additionally required regular updates from Mount Sinai School of Medicine, the patent holder, which agreed to not seek injunctions for potentially infringing products being sold during the shortage. On February 13, 2013, NIH's Office of Technology Transfer issued a "close out" letter stating that: "The December 2012 report from Genzyme stated that: (1) U.S. Fabry patients remain on full dose regimens, (2) Genzyme continues to accommodate new patients with full dosing and without placing them on a waiting list; and (3) Genzyme is able to provide full doses of Fabrazyme® to patients transitioning to Fabrazyme.® [34]

On October 25, 2012 the NIH received a petition on behalf of a coalition of public interest groups to exercise its march-in rights against AbbVie over its antiretroviral drug ritonavir (sold under the name Norvir®). On October 25, 2013 NIH denied the petition[35] stating that, as in 2004 when similar pricing and availability issues regarding the same drug were raised and discussed at public hearings, the NIH'S role in the case was limited to compliance with the Bayh-Dole Act and that "...the extraordinary remedy of march-in is not an approropriate means of controlling prices of drugs broadly available...".


Thoughts from the lawyers in the group?
George M. Carter

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