[Ip-health] KEI receives seven new contracts for COVID 19 research from BARDA and DOD, including five using “Other Transactions Authority” that weaken or eliminate Bayh-Dole and FAR Safeguards | Knowledge Ecology International

James Love james.love at keionline.org
Wed Jul 1 05:01:58 PDT 2020


KEI has received seven new documents for BARDA and DOD COVID 19 contracts
to fund the development of drugs and vaccines.

We have a press advisory about the new documents here:

https://www.keionline.org/covid19-ota-contracts

We wrote a fairly dense briefing note last week on the "Other Transaction
Authority," and now have updated the document to include the new data.  (See
the press advisory for links to the documents).

The KEI Briefing note is titled "KEI BN 2020:3 Other Transaction
Agreements: Government Contracts that May Eliminate Protections for the
Public on Pricing, Access and Competition, Including in Connection with
COVID-19", and is available here:

https://www.keionline.org/bn-2020-3

The revised briefing note is 50 pages.  The Introduction to the briefing
note, sans footnotes, follows:

1. Introduction.

“Other Transactions Authority” is a term used to refer to the authority
granted by the U.S. Congress to 11 federal departments or agencies to enter
into Other Transaction Agreements (OTAs), which are legally-binding
contracts, executed by the government for research and development (R&D) or
other purposes, that do not guarantee the same government rights and
 protections for the public as do traditional funding agreements. OTAs are
often defined as transactions other than procurement contracts, cooperative
agreements, and grants. Because they are not traditional acquisition
instruments, it is thought that OTAs are exempt from the laws and
regulations that apply to those agreements.

With the United States government awarding pharmaceutical companies
hundreds of millions and even billion-dollar plus contracts to develop
COVID-19 vaccines and treatments, there is considerable interest in
increasing the transparency of the funding agreements and ensuring that
they include provisions to protect the public interest in the affordable
pricing and availability of the resulting products.

There is an expectation that public-interest safeguards in the Bayh-Dole
Act, including march-in rights and the government’s royalty-free license to
use federally-funded inventions, can be utilized to ensure equitable access
to COVID-19 technologies. Despite these expectations, such remedies are
either limited or eliminated, in four COVID-19 related OTAs (three executed
by the Biomedical Advanced Research and Development Authority (BARDA) and
one executed by the Department of Defense (DOD)) obtained by Knowledge
Ecology International (KEI) under the Freedom of Information Act (FOIA).

Stated otherwise, when awarding contracts worth hundreds of millions of
taxpayers’ dollars to fund the development of COVID-19 therapeutics and
vaccines, the U.S. government has chosen to contractually limit the
safeguards available under federal law to protect the public. If the
pharmaceutical companies that received the funds take advantage of the
current public health crisis to charge unreasonable prices for the
resulting COVID-19 treatments or vaccines, the government cannot rely on
those measures to ensure access or to control costs.

Federal agencies that have been granted Other Transactions Authority take
the position that OTAs are exempt from the Bayh-Dole Act, the Federal
Acquisition Regulation (FAR), the Defense Federal Acquisition Regulation
Supplement (DFARS), and statutes designed to preserve the integrity of the
procurement process. The OTAs that KEI reviewed reflect the attitude that
Bayh-Dole Act legal safeguards are optional. Three of the OTAs eliminate
contractors’ legal obligations to make inventions available to the public
“on reasonable terms”, narrow the grounds for march-in rights, and limit
the government’s rights in technical data developed under the agreements.
An OTA between BARDA and Johnson & Johnson completely eliminates the
government’s royalty-free license to use the invention or have it utilized
on the government’s behalf, and an OTA between DOD and Ology Bioservices
circumvents the Bayh-Dole Act altogether.

Among other protections, the OTAs eliminate a safeguard that allows the
government to grant a compulsory license to a federally-funded medical
product and permit generic manufacture if a pharmaceutical company that
developed the product with federal funding charges an unreasonable price
for it.

In addition to the four complete OTAs that KEI obtained and reviewed under
the FOIA, KEI obtained

* amendments to a BARDA OTA with Johnson & Johnson for a COVID-19 vaccine,
* what appears to be a traditional procurement contract for a COVID-19
vaccine between BARDA and Moderna Therapeutics, which has funded
preclinical and clinical research on Moderna’s investigational mRNA-1273
vaccine, and
* amendments to a contract between BARDA and Protein Sciences Corporation,
which is part of Sanofi.

The Moderna contract, unlike the other COVID-19 OTAs, incorporates full
Bayh-Dole Act legal safeguards.

This Briefing Note provides a general overview and brief legislative
history of Other Transactions Authority, explains how OTAs differ from
traditional government funding mechanisms in terms of IP and data rights,
discusses how Other Transactions Authority has been used by federal
agencies, including in connection with COVID-19, and invites Congress to
undertake measures to remedy the lack of transparency and restrictions on
the use of public safeguards in OTAs.

              [snip]


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