NIH Decision is a Win for IP and Innovation
In a victory for federally funded innovation, the National Institutes of Health (NIH) this week rejected a petition urging the government to lower the price of prostate cancer drug Xtandi using “march-in” rights under the Bayh-Dole Act. AUTM and other like-minded organizations have lobbied for this petition to be rejected since it was issued in November 2021.
“This week's denial of the Xtandi petition confirms what U.S. Administrations [both Democratic and Republican] and AUTM have long known: regulating pricing is not a proper use of the Bayh-Dole Act’s march-in rights – and misusing that provision would have a chilling effect on the innovation ecosystem on which we all rely,” said AUTM CEO Steve Susalka.
Bayh-Dole supports the commercialization of federally funded inventions—like Xtandi, which was invented at UCLA with the support of grants from the US Army and the NIH— by allowing and incentivizing academic institutions and private contractors to own and manage inventions they develop with federal funds. As owners, they can license a technology to a company for further development so it can be made available to the public.
The law’s “march-in” provision allows the government to require the patent owner to grant additional licenses, to avoid situations in which a dominant company might license an invention to prevent the commercialization of a new technology that would compete with the company’s existing products.
The Bayh-Dole Act specifies, however, that this “march-in” authority only be used to alleviate health and safety needs that are not being reasonably satisfied or when the benefits of a product are not reasonably accessible. Petitions requesting the law be invoked to lower the price of a drug under patent protection—including three earlier petitions related to Xtandi that were filed during the Obama administration—have never been successful.
The November 2021 petition, filed by two cancer patients, argued that march-in rights should be invoked because drug pricing is a proxy for access. Xtandi, which is marketed in the US by Astellas and Pfizer, costs more in the US than it does elsewhere. However, in its response to the petition, the NIH said it had determined that use of the march-in authority would not be an effective means of making the drug less expensive.
A 2022 letter from the Bayh-Dole Coalition, an advocacy group formed to protect the Bayh-Dole Act and educate policymakers about its value, urged that the Xtandi petition be rejected. It was co-signed by AUTM and nearly 50 other organizations as well as 29 individuals, including the wife of the late Senator Birch Bayh and multiple past presidents of AUTM.