US universities fight potential Biden move on drug patents

As president vows to lower drug prices, academia sides with corporates against allowing waivers to legislation credited with driving US innovation

April 7, 2022
 President Joe Biden speaks to illustrate US universities fight potential Biden move on drug patents
Source: Getty

US research universities are joining with major pharmaceutical companies to fight a possible Biden administration move to lower drug prices by trimming their property rights to government-funded discoveries.

The prospect of Biden action is regarded by universities as posing a fundamental challenge to the Bayh-Dole Act, the 1980 law credited with sparking US economic innovation by making clear that research institutions can own and profit from discoveries that their scientists made using federal funding.

Bayh-Dole also allows waivers of those property rights in cases of demonstrated need, and activists within academia and beyond have been demanding that provision be applied in cases where drug companies are putting unaffordable prices on drugs arising from government-subsidised research.

“The government, the taxpayers of this country, are funding a lot of this research and development, and so they deserve a return,” said one of those advocates, Peter Arno, the director of health policy research at the Political Economy Research Institute at the University of Massachusetts Amherst.

Representatives of leading US research universities are pushing in the other direction.

Allowing exceptions to Bayh-Dole could “change the rules of the game well after the fact”, said Kevin Walters, a public affairs analyst at the Wisconsin Alumni Research Foundation, which handles research commercialisation at the University of Wisconsin-Madison.

“It’s essential for the government to continue to fund basic research, with as few strings attached as possible,” Dr Walters said, “both because basic research is a basic public good, but also because basic research sparks the process of technology innovation.”

The waivers allowed under Bayh-Dole, known as march-in rights, would let the federal government grant production authority to other companies – such as a generic drug manufacturer – in cases where the existing patent-holder is not taking steps to make a resulting product reasonably available to the public.

The National Institutes of Health has received about a half-dozen march-in petitions over the years and has never granted one. The Biden administration, however, is overdue on answering a petition process that’s been developing since the Obama administration that would grant one in the case of Xtandi, a drug for treating advanced prostate cancer.

Xtandi costs more than $500 (£400) a day in the US – several multiples of its price in other developed nations – and the consumer activists pushing for the approval of march-in rights contend that such a high financial barrier makes it meet the Bayh-Dole definition of not being made effectively available to many needy patients.

President Biden has repeatedly criticised high drug prices, but his main legislative response so far – greater subsidies for consumers and government negotiations with drugmakers on prices – has been blocked in Congress, and he has avoided taking a public position on march-in rights.

A chief opponent of using march-in rights is the Bayh-Dole Coalition, which represents numerous major US universities, their associations and their technology licensing offices. They have argued that calls for march-in rights identify the wrong problem, since federally funded science accounts for only a fraction of the cost of drug production. Universities therefore have little ability to affect the purchase price of drugs, but their research capabilities are vulnerable if Bayh-Dole rights are weakened and companies grow wary of working with patents arising from academic labs, the coalition has said.

Using march-in rights to fix prices “amounts to punishing universities and tech transfer offices for an issue that is not only outside of our control but beyond the purview of our mission”, said Dr Walters.

Dr Arno acknowledged a study last August by the US Congressional Budget Office finding that price restrictions will reduce the production of some new drugs. But lowering prices could help millions of people survive life-threatening conditions, “and that has to be taken into consideration”, he said.

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