[Bayh-dole-regulations] Bicameral Effort to Stop Proposed Rule Undermining Long-Standing Tool to Restrain Price Gouging for Taxpayer-Funded Drugs | Congressman Lloyd Doggett

James Love james.love at keionline.org
Mon Mar 29 11:13:40 PDT 2021


March 29, 2021
Contact: Kate Stotesbery

Bicameral Effort to Stop Proposed Rule Undermining Long-Standing Tool to
Restrain Price Gouging for Taxpayer-Funded Drugs

Washington, D.C. — Today, over 35 bicameral members of Congress, led by
U.S. Representative Lloyd Doggett (D-TX), Chairman of the House Ways &
Means Health Subcommittee, submitted a public comment opposing a Trump-era
proposed rule to revoke the federal government’s ability to protect
taxpayer investments and reasonable prices for prescription drugs and other
patented inventions. The 32 House members were joined by Senators Bernie
Sanders (I-VT), Elizabeth Warren (D-MA), Tammy Baldwin (D-WI), and Jeff
Merkley (D-OR).

Despite grandiose promises and aggressive rhetoric regarding high drug
prices, former President Trump failed to lower the cost of prescription
drugs by a penny. Instead, he spent four years delaying and dithering while
patients suffered—offering only modest proposals and bypassing rulemaking
requirements so that Big Pharma would suffer no harm to its bottom line.
Just before leaving office, he snuck in one dangerous proposed rule at the
National Institutes of Standards and Technologies (NIST), within the
Commerce Department, that would undermine existing federal authority to
lower the price of drugs developed with taxpayer dollars. Representative
Doggett led colleagues in urging then-President Trump to use this authority
on vital medicines in April 2017. You can read their request here. Four
years later, Trump’s negative response has finally arrived through this
damaging, proposed rule.

“By financing pharmaceutical research, taxpayers earn the right to obtain
affordable access to the resulting medication. Instead of negotiating
reasonable prices on COVID-19 vaccines and therapeutics, life-saving cancer
drugs, and other essential medicines developed with taxpayer dollars, Trump
gave Big Pharma billions in tax dollars and tax windfalls together with
exclusive monopoly power. Manufacturers are enabled to earn billions
exploiting the sick and dying with sky-high prices on taxpayer-funded
inventions,” said Congressman Doggett. “Now, a leftover proposed rule
working through the regulatory process would prohibit the government from
ever exercising its authority to protect taxpayer investments and prevent
price gouging. Under this proposed rule, taxpayers would continue to be hit
twice for many drugs—once when they pay for drug research and again when
Big Pharma abuses its monopoly to extract an excessive price.”

You can read the Members’ comment here or below. For further analysis of
the proposed rule from Knowledge Ecology International, click here.,

National Institute of Standards and Technologies,
Rights to Federally Funded Inventions and Licensing of Government Owned
Docket No.: 201207-0327
Docket ID: NIST-2021-0001-0001
Federal Register 2020-27581

RE: Rights to Federally Funded Inventions and Licensing of Government Owned
Inventions, National Institute of Standards and Technologies (NIST), United
States Department of Commerce, Notice of proposed rulemaking. 86 FR 35,
Agency/Docket Number: Docket No.: 201207-0327

To Whom It May Concern:

We write in strong opposition to the National Institute of Standards and
Technologies (NIST) proposal to revoke the federal government’s authority
under the Bayh-Dole Act to protect the public from unreasonable prices on
taxpayer-funded inventions.

Reining in out-of-control prescription drug prices is one of most pressing
challenges facing the United States, and taxpayers are investing more than
ever in biomedical research, sometimes funding 80 to 100 percent of the
cost of developing a new medical product. As the angel investors
underwriting the risk of development, taxpayers deserve access to these
products on reasonable terms, including fair pricing that accounts for the
investment made.

One of the most important federal authorities to prevent price-gouging is
the authority to march in and issue a compulsory license to a
taxpayer-funded invention when a contractor charges an unreasonable price
for the resulting product. Or to more accurately describe the process, the
government may exert taxpayer protection rights and authorize generic
competition on an unreasonably priced drug, thereby driving down the price
with American competition. The patentholder receives a fair royalty and
consumers receive fair access to essential medicines.

Under NIST’s dangerous proposal, this critical tool would be rendered
nearly meaningless by adding language to 37 C.F.R. § 401.6 stating that
march-in “shall not be exercised exclusively based on the business
decisions of the contractor regarding the pricing of commercial goods and
services arising from the practical application of the invention.” What
this proposal fails to recognize is that an invention cannot be made
available on reasonable terms without also assuring reasonable pricing.
Charging Americans outrageous prices for prescription drugs they paid to
develop is unreasonable and unjust. NIST’s proposal undermines federal
efforts to protect taxpayers from such predatory tactics.

The fact that the National Institutes of Health (NIH) and other federal
agencies have failed to utilize march-in rights is not a reflection on
issues with implementation of the authority, but an indication of how
industry narratives have negatively impacted agency behavior.

One example of a case where a march-in petition should have been granted
involves the prostate cancer drug Xtandi, which was invented and entered
clinical trials with the support of grants from the NIH and the U.S. Army.
The price to U.S. prostate cancer patients is more than $150,000 per year,
three to five times what it costs residents of any other country. Many of
us supported a petition to march-in on this technology.

The $2.1 million gene therapy marketed as Zolgensma treats spinal muscular
atrophy, a frequently fatal childhood condition, and was developed with
federal grants and subsidies, but access is limited by the high price tag.
It is unreasonable and morally repugnant for patients to be unable to
afford treatments that they need to extend their lives, when their tax
dollars helped finance its development.

It is well within the competence of federal agencies to determine what
constitutes an unreasonable price and respond accordingly. It is
unreasonable, for example, for a company to charge Americans three to five
times more for a taxpayer-funded drug than they charge residents of other
high-income countries, and agencies can address this issue by exercising
march-in rights. Agencies may also use reasonable pricing clauses as the
NIH did in contracts with Bristol-Myer Squibb for the cancer drug Taxol and
HIV drug ddI. And more recently, the Department of Defense used a reference
pricing ceiling in a contract with Sanofi for the COVID-19 vaccine.

It is also well within agencies’ statutory authority to protect the public
from unreasonable pricing. The Bayh-Dole Act requires that products arising
from taxpayer-funded inventions be made available to the public on
reasonable terms, and provides that the government can intervene when a
company price gouges on a federally-supported invention. A stated policy of
the statute is to “ensure that the Government obtains sufficient rights in
federally supported inventions to meet the needs of the Government and
protect the public against nonuse or unreasonable use of inventions.”
NIST’s proposal would defy this objective by supporting the pharmaceutical
industry’s continued unreasonable use of taxpayer-funded inventions to pad
profits instead of protect patients.

Pharmaceutical companies extract the highest prices from the sick and
dying, and this proposal would embolden them to charge even higher prices
by allowing them to price gouge with impunity. American consumers, who
financed these very products, would be left without federal protection or
legal remedy.

The NIST proposal is a grave misjudgment and would likely exacerbate the
already exorbitant cost of prescription medicines. It is a one-side
proposal that prioritizes the desires of industry over the rights and needs
of Americans. We strongly oppose this proposal and encourage NIST to
instead pursue measures to support access to medicines and fiscal
responsibility, such as a requirement of reasonable pricing clauses in all
federal funding contracts.


Lloyd Doggett

Tammy Baldwin

Jeff Merkley

Bernie Sanders

Elizabeth Warren

Earl Blumenauer

Cori Bush

Matt Cartwright

David N. Cicilline

Steve Cohen

Peter A. DeFazio

Rosa DeLauro

Mark DeSaulnier

Theodore E. Deutch

Veronica Escobar

Jesús G. "Chuy" García

Al Green

Raúl M. Grijalva

Alcee L. Hastings

Brenda L. Lawrence

Sheila Jackson Lee

Pramila Jayapal

Mondaire Jones

Ro Khanna

Barbara Lee

Andy Levin

Eleanor Holmes Norton

Chellie Pingree

Mark Pocan

Katie Porter

Ayanna Pressley

Jamie Raskin

Jan Schakowsky

Mark Takano

Rashida Tlaib

Peter Welch
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