It's Not Just About Drug Companies: Draft Framework on March-In Rights Has Awakened a Sleeping Giant

Joe Allen
Guest Columnist
 

While the pending “Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights” issued by the Department of Commerce poses the gravest threat to the Bayh-Dole Act since its passage, it’s also done some good.  It’s alerted an incredibly broad network of stakeholders that it isn’t just drug makers who are being attacked—it’s everyone involved in commercializing federally funded inventions.

For many years, defenders of the Bayh-Dole Act have been warning that attempts to misuse the march-in provision of the law to impose government price controls would unleash the furies on anyone developing a federally funded patent or founding a startup company based on academic inventions. Yet because the critics’ rhetoric always focuses on drug prices, that claim wasn’t taken seriously—until now.

As the word spreads that this attack isn’t limited to the National Institutes of Health (NIH) but applies equally to every federal agency, those who thought they were safely in the grandstands now find themselves on the playing field.

The guidelines were touted by political operatives in the White House as a powerful new tool to lower drug prices—but that claim falls apart under even casual scrutiny. Very few drugs can be copied under march-in rights because most of their patents weren’t based on federally funded research. But that’s not true for the startup companies that drive American innovation in fields like energy, environmental protection, food production, electronics, materials, etc. If the proposed guidelines are implemented, those entrepreneurs will have targets on their backs, as anyone can claim their products aren’t “reasonably priced”—a term that has not even been defined.

Recently, I was talking with one of the founders of the Small Business Association’s highly successful Small Business Innovation Research (SBIR) program about the guidelines. After listening for a few minutes, he said: “So what you’re telling me is that this isn’t their problem—now it’s my problem.” Exactly. As a result, small companies are now mobilizing.

We’re also seeing the national security community realizing that the pending guidelines don’t just threaten Department of Defense-funded research and development. China and other adversaries couldn’t ask for a better gift than for the US to undermine the law that is a cornerstone of our innovation system.

Similarly, we’re hearing bipartisan concerns on Capitol Hill that the guidelines are not only harmful to American innovation, they are a blatant attempt to change the Bayh-Dole Act without the consent of Congress. Whether you’re from a Red or Blue state, that strikes at the heart of our political system.

But this doesn’t mean we can relax. Submitting comments on the pending guidelines is a critical first step, but we can’t stop there. This fight will be won by an outcry from stakeholders across the nation that this is a serious error that will come back to bite us. Now’s the time to spread that warning in plain language. There are dire consequences to turning the Bayh-Dole Act on its head.

When the great 18th century diplomat Charles-Maurice de Talleyrand was unsuccessful in dissuading Napoleon from a faulty decision that came back to harm France, he quipped, “This is more than a mistake, it’s a blunder.”

The draft framework is more than a mistake. It’s a blunder. It can’t be allowed to stand.