NIST March-In Proposal is a Call to Arms for Academic Tech Transfer
Mike Waring
AUTM Advocacy and Alliances Coordinator
Scottish poet Robert Burns once wrote the famous phrase “the best-laid plans of mice and men often go awry.” Two hundred-plus years later, that sentence brilliantly describes the Request for Information (RFI) recently issued by the National Insitute of Standards and Technology (NIST) regarding potential changes to the way march-in rules can be applied against federally funded inventions. This RFI is based on assumptions that are dead wrong – and they are dangerous for the future of American innovation and competitiveness.
In its zeal to go after what it believes is “unreasonable” pricing, mostly for some drugs, the Administration wants to allow the National Institutes of Health (NIH) and every federal research agency increased authority to “march in” and take back the patent or copyright for federally funded inventions, using pricing as an excuse.
If ever there were a “call to arms” for tech transfer, this is it. AUTM will be weighing in with strong comments urging NIST not to move forward with this proposal, and every AUTM member needs to do the same. The deadline for comments is February 6. (AUTM has requested that the comment period be extended, but we should not assume that request will be granted.)
In crafting your feedback on this RFI, you’ll want to remind the authors why the Bayh-Dole Act is essential for US innovation and how the proposed changes, if implemented, are destined to go awry. You are welcome to borrow from this column in your comments.
When the Bayh-Dole Act was passed in 1980, it became a watershed moment for American innovation. Prior to Congress acting on this landmark legislation, the federal government retained the IP rights for inventions discovered using federal research dollars. But it was clear that this system was not incentivizing the further development of countless new medicines and technologies. By allowing universities and researchers to retain those IP rights, the law provided incentives for investors and licensees to help move these ideas out of the lab and into the marketplace. The result is staggering: trillions in economic impact, thousands of patents, millions of new jobs, all ensuring America’s global innovation leadership.
The NIST RFI claims changes should be made to this process to promote reasonable pricing. In doing so, it is making three huge mistakes.
First, there is nothing in the Bayh-Dole Act that says price can be used as a factor to invoke march-in rights. Indeed, both Senators Birch Bayh (D-IN) and Bob Dole (R-KS) publicly stated that the legislation was never intended to do that. March-in was a fail-safe mechanism mostly to prevent inventors from sitting on technology and not moving it toward commercialization. The very assumption made by the NIST RFI that the government CAN do this contradicts the federal law that created march-in rights in the first place.
Second, even if march-in could be invoked to control drug prices, it will not have that effect. A recent study showed that between 2011 and 2020, 99% of approved drugs would not be subject to march-in, and that 92% of approved drugs received no federal funding at all. Thus, a march-in decree designed to hand over a patent for others to make a drug at lower cost simply will not work as a broad price-control solution. And even if the patent for a federally funded drug were to be taken away, patients in need of that drug would have to wait years for other manufacturers to be able to replicate it in their own labs and bring it to market. This notion is wrong-headed from start to finish.
Third, the RFI fails to acknowledge the likelihood that uncertainty about whether march-in rights might be invoked will have a chilling effect on investment in innovation as a whole. Who will want to risk millions or billions of dollars with the knowledge that someday down the road, the government might decide the market price for that technology is “unreasonable”? Who will be making that decision? Federal bureaucrats with no understanding of economics? This issue goes well beyond drugs and would affect a range of new discoveries in such fields as agriculture, clean energy and more.
We could see investors refusing to support federally funded inventions for fear the invention has already been contaminated by government involvement. Indeed, NIH itself went through this exercise in 1989 when it imposed “reasonable pricing” conditions in its agreements between federal labs and outside parties. Six years later, NIH revoked the policy, with Director Harold Varmus admitting that the policy “drove industry away” from potential collaborations.
We need every AUTM Member to express our concerns about this dangerous proposal. To file comments, simply go to www.regulations.gov and enter NIST-2023-0008 in the search field. Click the “Comment Now” icon, complete the required fields and attach or enter your institution’s comments. To read the RFI itself, go to https://federalregister.gov/d/2023-26930.