James Love james.love at keionline.org
Thu Nov 30 14:56:06 PST 2017

BioCentury has this report on a hearing today, where Dr. Francis Collins to
Representative Jan Schakowsky that the NIH did not the authority under the
Bayh-Dole Act to deal with excessive prices, only non available of
products.   Of course, that's not true. This is Steve Usdin's report,
followed by a short commentary on the Bayh-Dole Act provisions.   Jamie

The BioCentury story:


NOV 30, 2017

NIH Director Francis Collins said at congressional hearing on Thursday that
the agency will not use “march-in” rights over medical products patented by
the institutes or its grantees as a tool to lower drug prices.

Collins was responding to a question from Rep. Jan Schakowsky (D-Ill.)
about NIH’s legal authority under the Bayh-Dole Act to terminate an
exclusive license and allow competitors to manufacture a drug. The march-in
provisions are intended “to cover a circumstance when a drug isn’t
available to the public at any cost,” not to intervene when a drug price is
unreasonable, Collins said. He added that NIH’s “legal experts” have
advised him that NIH can’t terminate a license based on a drug’s price.

Jamie Love, director of Knowledge Ecology International (KEI), a non-profit
organization that has vigorously lobbied NIH to use march-in rights to
lower drug prices, accused Collins of misstating the law. In a comment
posted on Twitter, Love noted that the Bayh-Dole Act requires inventions be
“available to the public on reasonable terms.” He also pointed to language
in the law that instructing the government to “protect the public against
nonuse or unreasonable use of inventions.”

In June NIH declined a request from KEI for it to exercise march-in rights
to allow generic competition for prostate cancer treatment Xtandi
enzalutamide (see BioCentury Extra, June 20).



A few notes on the law:

35 USC 200 describes the policy and objectives of the Bayh-Dole Act, and
that includes:

"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"

Note that this includes both "nonuse" and "unreasonable use."

Patent holders have an oblgiation to bring an invention to "practical
application."   And while that might sound like just getting it in a store
for sale, which is what Collins asserted today, the term in defined in the
statute, 35 USC 201(f), to mean "available to the public on reasonable
terms."   It is hard to parse that without seeing a requirement that the
price be rasonable.

Aside from this, the goverenment has a royalty free right in all patents it
funds, and that certainly gives it all the leverage it needs to deal with
prices.  See: 35 USC 202(c)4 and 35 USC 209(d).

The termination provision for NIH owned licenses is 35 usc 209(d)(3)(A),
which is read in light of definition of "practical application" in 201(f),
the requirement to make inventions "available to the public on reasonable

James Love.  Knowledge Ecology International
KEI DC tel: +1.202.332.2670, US Mobile: +1.202.361.3040, Geneva Mobile:
+41.76.413.6584, twitter.com/jamie_love

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