[Bayh-dole-regulations] Trump gave drug companies a last-minute win on prescription prices. Democrats want Biden to roll it back.

Claire Cassedy claire.cassedy at keionline.org
Wed Mar 31 07:38:05 PDT 2021


Trump gave drug companies a last-minute win on prescription prices.
Democrats want Biden to roll it back.

The Commerce Department in January proposed barring ‘march in’ actions over
high medicine costs

By Christopher Rowland
March 31, 2021 at 6:00 a.m. EDT

Two weeks before President Donald Trump left office, his administration
bestowed a parting gift on the U.S. prescription drug industry. It proposed
a rule to block the government from citing exorbitant prices to seize
control of a drug’s production.

The rule, drawn up by a division of the Commerce Department, would settle a
long-running battle over when government is justified in exercising “march
in” rights over taxpayer-supported government inventions. The 40-year-old
Bayh-Dole law gives the government power to grant a license to another
manufacturer if a company is not making a government-sponsored invention
available to the public on “reasonable terms.”

The government has never used the extraordinary power, regardless of which
party has held the White House. But it has remained a battleground in
Washington debates over the high prices of prescription drugs.

Under industry pressure and to the dismay of patient advocates, the Trump
administration on Jan. 4 set in motion a plan to end the debate. Its
proposed rule, which could become final in as little as a few months, would
narrow the circumstances under which march-in rights could be deployed. The
definition of “reasonable terms” would never apply to the price of a drug,
no matter how high, under the Trump rule.

Democrats in Congress and health advocates say the proposed rule would
eliminate one of the few impediments to sky-high drug prices in the United
States. The nonprofit groups Knowledge Ecology International and Public
Citizen, as well as several activist organizations with big email lists of
grass-roots supporters, are demanding that President Biden’s administration
reverse the Trump move.

The Pharmaceutical Research and Manufacturers of America, an industry trade
group, has not yet submitted a comment on the proposed rule. The comment
period closes April 5. In 2019, urging the Commerce Department to take this
step, it said the move is needed to clarify the intent of the 1980 law.

Commerce Secretary Gina Raimondo will have to decide whether to overturn
the Trump action or make it final. Groups against the rule have used the
official comment period to organize submissions of thousands of
cookie-cutter messages from individual citizens denouncing the proposed
restriction and calling on Raimondo to reverse the plan.

The Commerce Department declined to say how Raimondo views the issue.

Health and Human Services Secretary Xavier Becerra has forcefully supported
march-in rights. Last year — as California attorney general, and as the
coronavirus raged in his state — Becerra called on the government to seize
production rights for Gilead’s remdesivir, the first authorized treatment
for covid-19, citing high prices and limited production.

That position put Becerra at odds with the leader of the National
Institutes of Health, Francis Collins, who has said NIH lawyers have
advised him that the price of a drug cannot be used as a justification for
a march-in action.

In 2016, Becerra, then a member of the U.S. House of Representatives, also
signed a letter by 50 congressional Democrats urging Collins to set up
guidelines for when price could be used to justify marching in.

The Department of Health and Human Services, which will have an opportunity
to provide input on the final rule, declined to comment.

Topher Spiro, associate director of health at the White House Office of
Management and Budget, which reviews rules proposed by government agencies
before they are finalized, has also argued previously for the use of
march-in rights to incentivize lower drug prices, as lead author of a plan
from the liberal Center for American Progress, where he was vice president
for health policy. Asked whether Spiro would play a role in the review, the
OMB did not respond.

Liberal Democrats in Congress are pushing the Biden administration to
reject the Trump rule.

“It concerns me greatly that the Biden administration has not questioned
this approach already,” said Rep. Lloyd Doggett (D-Tex.), the organizer of
a letter this week signed by House and Senate Democrats denouncing the
Commerce Department proposal and urging that it be scrapped. “We have so
few tools to combat prescription price gouging. Why remove one of the only
ones we have?”

In their letter, the three dozen lawmakers pointed out that the invention
of drugs often relies heavily on government.

“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,” said the letter, signed by
Sens. Elizabeth Warren (D-Mass.) and Bernie Sanders (I-Vt.), among others.

The Bayh-Dole law dictates how technologies supported by NIH — through
direct government scientific work or at research universities that receive
billions in NIH research grants — are adopted and transformed into marketed
products by private industry.

The Trump rule would apply to all government-backed inventions, but the
focus of the public debate generally has been over drugs.

By creating a licensing system that relied on the private sector to carry
on the work started by taxpayer investment, Bayh-Dole is credited with
helping fuel the boom in pharmaceutical research and investment over the
past four decades.

But the law does not spell out what is meant by requiring drugs be made
available to the public on “reasonable terms.”

The law’s co-authors, then-Sens. Birch Bayh (D-Ind.) and Bob Dole (R-Kan.),
wrote an op-ed in The Washington Post in 2002 that said controlling prices
was never their intent. Critics of the law, however, have been quick to
note that Dole and Bayh were no longer senators when they wrote that
article. Dole, who left the Senate in 1996 during his campaign for
president, became a Pfizer TV pitch man for Viagra in 1998; Bayh, who died
in 2019, represented the Washington interests of numerous corporate clients
after he left the Senate in 1981.

The current fight is being played out in a division of the Commerce
Department called the National Institute of Standards and Technology.
NIST’s mission is to encourage the transfer of government-sponsored
inventions into the private sector.

Among backers of the Trump administration’s proposed rule is AUTM, formerly
known as the Association of University Technology Managers. The association
maintains that advocates of lower drug prices concocted “hidden meaning” in
the Bayh-Dole march-in rights that needs to be definitively ruled out.

Permanently barring price from consideration is crucial to bolstering
industry confidence that its licensing deals for taxpayer-supported
inventions will not be undermined by government officials, the association

“We have brilliant researchers who are developing life-changing inventions
across the country, and we need to get them into the hands of companies to
develop them further. Anything that would perturb that delicate balance is
concerning,” said Stephen Susalka, AUTM’s chief executive. “Pricing is
outside the scope of Bayh-Dole. That’s the opposite of why Bayh-Dole was
initially implemented.”
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.keionline.org/pipermail/bayh-dole-regulations_lists.keionline.org/attachments/20210331/f1343662/attachment.html>

More information about the Bayh-dole-regulations mailing list