[Ip-health] UACT Letter to Congress Regarding NIST Recommendations to Limit Bayh-Dole Act Safeguards

Manon Ress manon.ress at cancerunion.org
Tue Feb 26 11:00:25 PST 2019


UACT Letter to Congress Regarding NIST Recommendations to Limit Bayh-Dole
Act Safeguards

In December 2018, the National Institute of Standards and Technologies
(NIST) (a part of the Department of Commerce) published a draft Green
Paper, titled “Return on Investment Initiative for Unleashing American
Innovation” (NIST Special Publication 1234).

A copy of the draft Green Paper is available here:
https://doi.org/10.6028/NIST.SP.1234

The draft Green Paper was published after the launch of an April 2018
initiative, “Unleashing American Innovation Symposium” and followed four
public hearings and a request for comments noticed on May 1, 2018 (83 FR
19052). The initial comment period closed July 30, 2018.

UACT drafted a letter to raise the alarm in members of Congress that an
initiative that began under the auspices of a review of licensing practices
by federal labs has emerged as an outright an attack on reasonable pricing
obligations for drugs and other inventions that was codified by the US
Congress in the Bayh-Dole Act.

The full text of the letter follows below, and a PDF version is available
here.

https://cancerunion.org/2019/02/26/uact-letter-to-congress-regarding-nist-recommendations-to-limit-bayh-dole-act-safeguards/

 *****************************************************************

February 27, 2019

Dear Member of US Congress,

We are writing to alert you to an appalling proposal by the National
Institute of Standards and Technologies (NIST) to issue regulations that
will redefine and narrow the public’s rights in federally-funded
inventions, and specifically, will make it impossible to use federal
march-in or royalty-free rights to provide affordable treatments to US
patients.

Background

The stealth technical initiative was launched after the April 19, 2018
“Unleashing American Innovation Symposium” in Washington, DC, and followed
four public hearings and a request for comments noticed on May 1, 2018 (83
FR 19052). The initial comment period closed July 30, 2018. What started
out as an unpublicized unrelated review of licensing practices by federal
labs, has become a broader stealth attack on reasonable pricing obligations
for drugs and other inventions.

The NIST draft Green Paper on Return on Public Investment[1], a 135-page
long technical document, was published on December 6, 2018 and includes
proposals designed to narrow and even eliminate important safeguards in the
Bayh-Dole Act. In particular, the Green Paper includes provisions designed
to protect companies that sell expensive drugs, vaccines, diagnostic tests
and gene- and cell-treatments like CAR T from obligations to ensure
products are affordable and accessible, by enacting new regulations to
restrict the use of march-in and royalty-free rights in patents on
federally-funded inventions.

What is at risk?

There are currently three important public interest safeguards in the
Bayh-Dole Act, including:

1. The federal government’s royalty-free right to inventions it funded, as
mandated under 35 USC § 202 and 35 USC § 209;

2. March-in rights on federally-funded inventions, under 35 USC § 203; and

3. The obligation to bring federally-funded inventions to practical
application, including in particular the requirement that the benefits of
the inventions be made “available to the public on reasonable terms.”

     The royalty-free right recommendation

The royalty-free statutes ensure that the government retains the right “to
practice or have practiced for or on behalf of the United States” a
federally-funded invention. This right is limited, but only in that the
royalty-free right has be used “for or on behalf” of the United States.

The NIST Green Paper Intended Action 1 proposes policies and regulations to
limit such rights. Specifically, the recommendation is that:

“The scope of the government use license should not extend to goods and
services made, sold, or otherwise distributed by third parties if the
government—or a government contractor in the performance of an agreement
with the government—does not directly use or consume those goods and
services.”

What NIST is proposing is that the US government be prevented from using
the royalty-free right in inventions to have drugs manufactured for and
distributed to the public under a government program, like Medicare,
Medicaid, the Ryan White program or future programs, such as the new Trump
Administration proposal to eradicate HIV or an extensive vaccination
program for the Zika virus.

     The march-in rights recommendation

Furthermore, the statute outlining march-in rights in the draft Green Paper
is to be narrowed to the point of making march-in rights unusable in cases
where pricing is excessive and access is limited. Among the recommendations
concerning the federal march-in right are the following:

“Implement regulatory change under the Bayh-Dole Act to make explicit that
the use of march-in rights specified in statute is reserved for a
compelling national issue or declared national emergency when other
remedies have failed.

Implement regulatory change under the Bayh-Dole Act by specifying that
march-in rights should not be used as a mechanism to control or regulate
the market price of goods and services.”

The proposed changes would lock in past practices by the National
Institutes of Health (NIH) and the Department of Defense (DoD) that have
allowed companies to charge any price they want for federally-funded
inventions, including prices that are far higher than are found in other
high income countries. The regulation would effectively overturn a
directive to the Department of Defense in the 2017 National Defense
Authorization Act, from the Senate Armed Services Committee, which
instructed the DoD to use march-in rights when the price of a DoD-funded
drug was higher than the median price in the seven largest economies with
at least 50 percent of US per capita income. There is a current case
pending before DoD on this issue, filed by two cancer patients, including
one Vietnam veteran, regarding Xtandi, a prostate cancer drug that has an
average wholesale price (AWP) of $159,000 per year in the United States.
The US price is three to five times higher than the price other high income
countries.

     The reasonable terms recommendation

Another important statutory requirement, that a federally-funded invention
be “available to the public on reasonable terms,” is to be redefined to the
point of becoming if not absurd, at least meaningless.

NIH Director Dr. Francis Collins and before him Dr. Elias A. Zerhouni, have
both taken the position that the obligation to make the benefits of
inventions “available to the public on reasonable terms” will be satisfied
if a company makes a product available to the public at any price. This is
an extremely disturbing interpretation of “available to the public on
reasonable terms.” As Congress recognizes almost everyday in hearings and
meetings the price of drugs, vaccines, diagnostic tests and gene- and
cell-treatments like chimeric antigen receptor T-cell (CAR T) therapies is
the metric that counts the most for patients, payers, US government
programs, and “the public.” Interpreting “reasonable terms” as available at
any price is outrageous and callous and certainly not reasonable.

Conclusion

UACT is deeply concerned by the changes proposed by NIST in the regulations
and policies relating to the use of the royalty-free and march-in rights in
federally-funded patents, and the ruthless efforts to use regulations to
narrow the statutory definition of “available to the public on reasonable
terms.”

UACT is asking that Congress take a bipartisan approach to stop the
adoptions of policies that will certainly harm patients and to ensure that
NIST does not pursue the changes in regulations of the Bayh-Dole Act that
would eliminate fundamental safeguards for US citizens.

I would be happy to address any questions you may have or to meet with you
regarding this important matter.

Sincerely,

Manon Ress, Founder and Director
Union for Affordable Cancer Treatment (UACT)
manon.ress at cancerunion.org



[1] Copy of the draft green paper available here:
https://doi.org/10.6028/NIST.SP.1234

-- 
Manon Ress, Ph.D.
Union for Affordable Cancer Treatment (UACT)
Cell Phone +1 571 331 6879
www.cancerunion.org
Email: info at uact.org
Twitter: @Cancer_Union
Telephone: 202.332.2670

Mailing Address:
1621 Connecticut Avenue NW
Suite 550
Washington, DC 20009


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