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OPINION: Proposal to Reduce the Cost of Prescription Drugs Is Misguided

NIST’s proposal risks undermining Bayh-Dole Act and stifles innovation, competition, research and development

By John Laub, March 15, 2024 11:11 am

Once again, a misguided proposal aimed to reduce the cost of prescription drugs, would not only fail to reduce prices, but would erode an Act of Congress enacted in 1980. 

The United States has played a pivotal role in spearheading drug discovery efforts, which have been instrumental in achieving remarkable advancements in reducing mortality rates from deadly diseases and alleviating the suffering associated with chronic conditions worldwide.

This progress has been significantly expedited by the bipartisan Bayh-Dole Act framework, which encouraged a cooperative partnership between the public and private sectors within the drug development pipeline. Prior to the enactment of this legislation, less than five percent of the federal government’s 28,000 patents had been licensed, meaning that potential innovations capable of benefiting patients remained underutilized.

While making prescription drugs more affordable for patients is needed, we must address the root cause, not diminish intellectual property protections which would only make matters worse by stifling innovation, competition, research, and development.

The recent release of the National Institute of Standards and Technology’s (NIST) Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights has sparked apprehension within the research community. This framework, if adopted, poses a threat to the foundational principles of the Bayh-Dole Act of 1980, and puts the dynamic landscape of research and innovation in the United States in jeopardy.

Senators Bob Dole and Birch Bayh (Photo: Screenshot)

The Bayh-Dole Act, a product of bipartisan collaboration, was designed to encourage private sector investment in translating federally funded research into commercially viable products that benefit both patients and consumers. At its core, Bayh-Dole established a framework empowering universities and other recipients of federal funding to retain ownership of inventions derived from that funding. This framework has been pivotal in facilitating the timely and efficient commercialization of federally funded research, driving innovation across various industries.

Key to Bayh-Dole is the provision for “march-in” rights, intended to be utilized under specific circumstances where the public interest is paramount. However, the proposed framework by NIST diverges significantly from established practices by recommending that federal agencies consider the cost of products incorporating federally funded inventions when evaluating march-in criteria. This departure not only contradicts the spirit of the law but also threatens to stifle innovation and dissuade private sector investment in research commercialization.

It is imperative to recognize that Bayh-Dole was never intended to serve as a mechanism for dictating product prices, including pharmaceuticals. The act outlines specific criteria for invoking march-in rights, primarily focusing on practical application, or addressing unmet health and safety needs. Nowhere does the legislation authorize federal agencies to invoke march-in authority based on pricing considerations.

Additionally, misusing march-in rights to regulate prices would have a minimal impact on drug prices. Most drugs are shielded by multiple patents, with only a fraction subject to march-in rights. Therefore, utilizing march-in as a tool to address concerns about drug pricing is not only ill-conceived but also unlikely to yield meaningful outcomes.

It is crucial to uphold the bipartisan consensus that reinforces the Bayh-Dole Act and honor its original intent. Senators Birch Bayh and Bob Dole, the architects of the legislation, have explicitly stated that the law was not intended to regulate prices. Any deviation from this intent would necessitate congressional amendment and careful consideration of the broader implications for research and innovation.

To put it briefly, NIST’s proposed March-In Framework represents a departure from established policy and poses a threat to the fundamental principles of the Bayh-Dole Act.

Instead of fostering innovation and collaboration between the public and private sectors, this proposal risks impeding research progress and discouraging future investment in groundbreaking discoveries.

It is imperative for policymakers and stakeholders to unite in preserving the integrity of Bayh-Dole and ensuring that the United States remains a leader in research and innovation for generations to come.


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