- - Tuesday, April 19, 2016


During my 25 years at the Food and Drug Administration, I had a front-row seat for the evolution and modernization of pharmaceutical research. Now that I’m in the private sector, I’m discouraged to see political candidates bash drug companies for easy applause lines.

When policies affecting the development of new treatments are reduced to sound bites, the future of medical innovation is put in jeopardy. The debate over the federal government’s so-called “march-in” rights regarding prescription drugs is a perfect example of this danger.

Created under the 1980 Bayh-Dole Act, these rights enable the government to revoke intellectual-property protections on certain medicines in the name of public health. A number of lawmakers are now seeking to use march-in rights to cut the price of prescription drugs.

While their goal might be popular with voters, the effort represents a blatant misuse of the Bayh-Dole Act — and would undermine the very inventions the law was designed to promote.

Prior to the enactment of Bayh-Dole, the government owned approximately 26,000 patents, only 5 percent of which had been used in the private sector. Taxpayers were funding groundbreaking research. But since so few inventions were being licensed for drug development, Americans weren’t seeing the full benefits.

The Bayh-Dole Act addressed this problem head-on. Passed with bipartisan support, the law allows our patent system to promote the use of inventions arising from federally supported research and development.

In particular, the law enables researchers and their institutions to take over ownership of their findings and license their discoveries to industry. As a result, taxpayers who help fund the research are now able to reap its benefits in the form of better treatments and, in some cases, cures.

Over the past decade, the Food and Drug Administration has approved a record number of new drugs in the United States. Had the Bayh-Dole Act not been enacted, a significant number of innovations could have remained on the shelves of universities instead of reaching patients in need. Today, nearly 30 percent of patents for federally sponsored inventions are in use in the private sector.

Those critical of Bayh-Dole say it results in more secrecy and less cooperation among scientists. They couldn’t be more wrong. Basic science researchers want to see their work translated into a FDA-approved medicine so it can benefit real patients.

Nevertheless, Congress built safeguards into Bayh-Dole in the form of march-in rights. In certain situations, these rights allow the federal agency that funded certain research to require patent-holders to grant additional licenses for their technology.

For instance, a federal agency could march-in in cases when the current licensee fails to achieve practical application of a licensed patent or is unable to produce a sufficient quantity of product to satisfy public health and safety needs.

Congress intended for the march-in provision to apply only in narrow circumstances. In the case of patents related to biopharmaceutical research and development, the National Institutes of Health (NIH) has concluded in several rulings that march-in is not an appropriate means of controlling drug prices. And yet, a number of lawmakers in Congress still insist that the NIH intervene to make certain drugs more affordable.

The use of march-in rights to control drug prices could defeat the purpose of Bayh-Dole and chill investment in biopharmaceuticals and other sectors that license technologies. In particular, this tactic would undermine innovation and threaten the sustainability of the U.S. research and development ecosystem.

As a result of Bayh-Dole, between 1996 and 2013, academia-industry patent licensing bolstered U.S. gross domestic product by up to $518 billion and supported nearly 4 million U.S. jobs. Universities have seen income from their inventions rise from about $7 million in 1981 to more than $2 billion in 2013. And in 2013 alone, 818 start-up companies formed as a result of technology transfer activities.

Federal funding for America’s universities has fallen in recent years. As a result, these institutions increasingly rely on licensing fees to support critical research. Exercising march-in rights could eliminate the important funding derived from licensing patents held by universities.

The NIH shares this concern. Moreover, the agency has concluded that broadening the applicability of march-in would increase uncertainty for the biopharmaceutical sector at a time when research and development has never been more time-consuming, risky or expensive.

Bayh-Dole incentivizes the private sector to make the enormous investments needed to translate government-funded basic research into useful products, including new treatments and cures. If the law is subverted through the abuse of march-in rights, promising scientific opportunities could go unexplored, resulting in fewer new medicines. Lawmakers and regulators owe it to the millions of Americans living with debilitating diseases to protect Bayh-Dole, so that they can have hope for a healthier future.

Peter Rheinstein, a doctor of medicine and law, is president of Severn Health Solutions, chairman of the United States Adopted Names Council, chairman of the American Board of Legal Medicine, a delegate of the American Medical Association, and a former president of the Academy of Physicians in Clinical Research.

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