[Ip-health] Senators Chris van Hollen and Rick Scott introduce bill on reasonable pricing of federally-funded drugs

James Love james.love at keionline.org
Wed Jul 31 11:02:14 PDT 2019

Senators Chris van Hollen and Rick Scott introduce bill on reasonable
pricing of federally-funded drugs»Knowledge Ecology International

July 31, 2019

This is a copy of the “We PAID Act” by Senators Chris van Hollen (D-MD) and
Rick Scott (R-FL).


The We PAID Act

The 31 page bill creates a new non-profit organization to determine
reasonable prices for drugs that use “qualifying patents” that benefited
from federal funding, and would impose harsh sanctions, including the loss
of access to federally-funded inventions and a loss of exclusivity, when
prices exceed a reasonable price, or have annual increases in prices that
exceed a medical care category of the consumer price index. The National
Academies provides inputs to the methodology.

If a product has even a single federally funded patent, the reasonable
pricing obligation would apply.

The bill has a number of features that are interesting. It would require
patent holders to disclose “any Federal grant received in the 10-year
period prior to submitting the application, in which the applicant is
listed as the principal investigator or co-investigator with respect to the
grant,” a provision that would address the many failures to disclose abuses
described here: https://www.keionline.org/bayh-dole/failure-to-disclose

The bill also creates a private right of action to enforce failures to
disclose under 35 USC 202(c)(6), the part of the Bayh-Dole Act that
requires disclosures of federal funding, something that patent holders
frequently fail to do. The existing legal obligation to disclose is as

35 USC 202 (c) Each funding agreement with a small business firm or
nonprofit organization shall contain appropriate provisions to effectuate
the following:
. . .
(6) An obligation on the part of the contractor, in the event a United
States patent application is filed by or on its behalf or by any assignee
of the contractor, to include within the specification of such application
and any patent issuing thereon, a statement specifying that the invention
was made with Government support and that the Government has certain rights
in the invention.
The bill provides for new private actions to remedy for non disclosure,
which is important, given the NIH’s persistent unwillingness to sanction
such failures.



(A) IN GENERAL.—A person (including a government entity) may bring a civil
action in an appropriate district court of the United States against a
covered patentee—

(i) on the ground that the application for the patent with respect to which
the covered patentee holds title failed to comply with the requirement
under section 202(c)(6); and

(ii) if the person is injured by the failure to comply described in clause

(B) SCOPE.—In an action brought under subparagraph (A), if the court finds
by a preponderance of the evidence that the application described in that
subparagraph failed to comply with the requirement under section 202(c)(6),
the court shall cancel as unpatentable any claim of the patent issuing from
that application.

(2) INTER PARTES REVIEW.—Section 311 of title 35, United States Code, is
amended by striking subsection (b) and inserting the following:

‘‘(b) SCOPE.—A petitioner in an inter partes review may request to cancel
as unpatentable 1 or more claims of a patent—

‘‘(1)(A) on a ground that could be raised under section 102 or 103; and

‘‘(B) on the basis of prior art consisting of patents or printed
publications; or

‘‘(2) on the ground that the application with re16 spect to the patent was
subject to the requirement in section 202(c)(6) and failed to comply with
that requirement.’’.

The bill would not be retroactive.

Page 6.

(C) is covered by a qualifying patent on the drug, on a method of using
such drug, or on a method or machine used to manufacture or administer such
drug with respect to which the drug sponsor retained the title to any
subject invention under section 202 of title 35, United State Code, or
entered into a licensing agreement after the date of enactment of this Act.

James Love.  Knowledge Ecology International
U.S. Mobile +1.202.361.3040
U.S. office phone +1.202.332.2670
http://www.keionline.org <http://www.keionline.org/donate.html>

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