Every once and a while we get a clear example of the gulf between those battling over important public policy issues and can understand why the public and policy makers are confused by resulting charges and counter charges. Last week was a good illustration.
The Washington Post reviewed a study by the Tufts Center for the Study of Drug Development in its story titled Does it really cost $2.6 billion to develop a new drug? As the title implies the claims of huge costs and risks undertaken by drug developers are summarily dismissed by their critics. The story fairly presents both sides of a debate with vastly different worldviews.
The Tuft’s study estimates that the costs of drug development have doubled from $802 million in their 2001 study to $2.6 billion today. The causes include:
Steel yourself, gentle reader. This month we go hunting the living dead: arguments that keep climbing out of the grave to bite and infect the unwary.
Four months after NIH rejected the latest attempt to misuse the Bayh-Dole Act to control drug prices zealots have risen from the crypt claiming the law should be used to haunt drug developers. March-in rights were designed to force universities to issue additional licenses if effective efforts are not being made to commercialize a federally funded invention; if the licensee cannot meet national health, safety or regulatory needs; or if the licensee fails to make the product in the U.S. despite a pledge to do so.
Critics claim there’s another trigger: if they don’t like the price of a drug. While the cost of new drugs is a concern, their solution sucks the life blood out of a system leading the world in protecting public health. It’s time to drive a stake through that spectre.
The National Institutes of Health recently made its long anticipated ruling on a petition seeking to use the “march in” provisions of the Bayh-Dole Act as a mechanism for the government to control prices on drugs derived from federally-funded research by issuing compulsory licenses.
NIH correctly ruled that such actions are not sanctioned under the law. Three succeeding NIH directors have reached the same conclusion: the march in rights provision was never intended as a price control mechanism. Hopefully, the third time is the charm.
The petition was a reiteration of one dismissed in 2004 seeking to have the government march in to control the price of Norvir, part of the AIDS “cocktail.” Norvir was invented by Abbott Laboratories with partial NIH funding, thus it falls under the Bayh-Dole Act which grants ownership of federally funded inventions to universities and industry contractors so they can be developed for public use.
Before Bayh-Dole not a single drug was commercialized when the government took patent rights away from inventing organizations. Under the law at least 153 new drugs and vaccines are now alleviating human suffering world-wide.
Senate Judiciary Committee Chairman Patrick Leahy (D-VT) asked NIH in a July 12 letter to force compulsory licensing of Myriad’s BRCA breast and ovarian cancer genetic test under the “march-in rights” provision of the Bayh-Dole Act. “Testimony presented to the U.S. Patent and Trademark Office made clear that many women are not able to afford the testing provided by Myriad.” Senator Leahy also charged that the Myriad test “was developed with federally-funded research.” See Leahy Urges Action.
Myriad received an exclusive license to develop the test from universities operating under Bayh-Dole Act. The law allows nonprofit institutions receiving federal R&D funds to own and license resulting inventions so they can be commercialized for use by the public.
Critics of Bayh-Dole have long sought to reinterpret its statutory standards under which the government can compel universities to issue compulsory licenses as a weapon to control prices. This was not the intent of the law.
First make sure you’re right, then go ahead. ~ Davy Crockett
“The Fall of the Alamo” by Robert Jenkins Onderdonk, 1903.
(Adapted from my talk to the Association of University Technology Managers Annual Meeting in San Antonio, Texas. The meeting coincided with the anniversary of the siege of the Alamo which fell on March 6, 1836.)
The ancient Chinese saying: “May you live in interesting times” was meant as a curse. Well folks, we live in interesting times. We need to recognize it, roll up our sleeves, and get to work. If my parent’s generation could survive the Depression, fight and win World War II, and come home to build the most prosperous nation in history, surely we can meet our tests.
If you’re paying attention at all, you must have noticed that there are forces out there who just don’t like what you do. Some say you’re too focused on making money, some say you’re not focused enough (we really should introduce these folks to each other), some don’t believe it’s moral for universities to work with industry, and many have built very successful careers launching attack after attack on Bayh-Dole and the very patent system itself.
Without doubt, the biggest patent deal of the month related to Kodak’s sale of its non-core patent portfolio to Intellectual Ventures, RPX and others for $525 million, which was just enough to qualify Kodak for bankruptcy financing that had been previously secured if and only if that portolio sold for in excess of $500 million. We covered that issue as it happened on December 19, 2012. See Kodak Sells Patents to IV, RPX.
There were a number of other interesting patent business deals during December that also caught our eye, including: (1) Microsoft and EINS Sign Android Patent Agreement; (2) NIH Awards Contract for Improved Anthrax Vaccine; (3) ARRIS To Acquire Motorola Home Business For $2.35 Billion; (4) Mylan Announces Comtan® Settlement Agreement; (5) Trovagene Licenses Duke University, Novartis; (6) Amgen Finalizes Agreement Resolving Federal Investigations; (7) GE Healthcare, CDI Agree to Sublicense for Cellular Assay Patents; and more. Below is summary of these and other patent deals from the month of December 2012.
President Obama delivers his State of the Union address, January 24, 2012.
In the annual State of the Union Address President Obama explained: “Innovation is what America has always been about.” Today the Obama Administration took major steps forward to collaboratively work with private industry to tap American ingenuity to assist in a world-wide humanitarian effort. The United States government will work with the private sector, universities, and non-profits to foster game-changing innovations with the potential to solve long-standing development challenges in health, food security and environmental sustainability.
I had the honor of being invited to the White House today for the Innovation for Global Development Event, which was held in support of the President’s commitment to using harness the power of innovation to solve long-standing global development challenges. As a part of this event, David Kappos, Under Secretary of Commerce for Intellectual Property and the Director of the United States Patent and Trademark Office, launched a pilot program dubbed Patents for Humanity, which is a voluntary prize competition for patent owners and licensees. The pilot program seeks to encourage businesses of all kinds to apply their patented technology to addressing the world’s humanitarian challenges.
There is a tide in the affairs of men
Which taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
See Julius Caesar.
U.S. Senator Birch Bayh (ret.)
We caught the tide– but just barely. That the Bayh-Dole Act passed was amazing. That it passed in a lame duck session of Congress with its principal author defeated, the US Senate changing hands, and a sitting president thrown out, was a miracle. Even then success was not assured. The bureaucracy was waiting to undermine the implementing regulations. Yet the new law survived, strengthening the economy while improving public health and well-being.
Success depended on slipping through a narrow window of opportunity. In Julius Caesar, Brutus hesitates and is swept away. Fortunately, we launched and caught the tide. This is my “staff’s eye view” of how it happened.
Gene Quinn with Senator Birch Bayh (right), October 13, 2010
One of the most successful pieces of federal legislation enacted since World War II is the Bayh-Dole Act, which for the first time allowed patent rights to be owned by Universities rather than by the United States federal government. Bayh-Dole was enacted by Congress on December 12, 1980, which means we are a little more than one month away from the 30th Anniversary of the legislation being passed.
At IPWatchdog.com we will spend the next month celebrating Bayh-Dole. We kick off our month long celebration of Bayh-Dole with an exclusive interview with the chief architect of the legislation — The Honorable Birch Bayh, a former three-term United States Senator from the State of Indiana. Senator Bayh is now with Venable LLP, which is located in Washington, DC, and where I conducted my interview with him on October 13, 2010.
During this first installment of my two-part interview with Senator Bayh we discuss some of the accomplishments of Bayh-Dole and Senator Bayh tells the story of how Bayh-Dole came to be. I suspect many, if not most, will be amazed to learn just how close we came to not have this monumentally successful legislation. But for another Senator lifting a hold with an hour left in the 1980 lame duck session there would never have been a Bayh-Dole Act.