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Posts Tagged: "Xtandi"

Bernie Sanders’ Really Bad Idea

Sen. Bernie Sanders (I-VT) introduced legislation requiring every agency and non-profit entity to include a “reasonable pricing” provision based on King’s formula for any life science invention made with government support. Apparently the colossal failure of a similar requirement forced on the National Institutes of Health (NIH) in the 1990’s which led to the collapse of industry partnerships without any reduction in drug prices is either unknown, or made no impression on Sen. Sanders. Or perhaps like his trust in socialism, he thinks that what failed in the past will somehow work by some weird magic if trotted out again.

Proposal from Senator King Won’t Reduce Drug Prices, Just Innovation

Many were stunned to learn that Senator Angus King (I-ME) included language undermining the Bayh-Dole Act in the report of the Senate Armed Services Committee as it approved the National Defense Authorization Act. The the language “directs” the Department of Defense (DOD) to issue compulsory licenses under Bayh-Dole “whenever the price of a drug, vaccine, or other medical technology is higher in the U.S. than the median price charged in the seven largest economies that have a per capita income at least half the per capita income of the U.S.” The provision gives the Department no discretion— it must comply. Apparently no one bothered to check with DOD or anyone familiar with the law to discover that this language incorporates a long discredited theory of how Bayh-Dole operates, or of the significant damage it would do to the development of badly needed medicines and the U.S. economy. The bill is headed to the full Senate for consideration. So before that happens, let’s consider why this is such a bad idea.

Property Rights Key to Bayh-Dole Act’s Success

The focus of the political advocates pushing march-in may be lower drug costs. But the long-term costs of ripping apart IP rights are far higher and more fundamental than advocates acknowledge. The long-term price of exercising these exceptional prerogatives could include creating a crisis in confidence over use of federally funded research discoveries, dried-up private investments where basic research has federally funded fingerprints, hesitation to commercialize university research, and a corresponding drop in start-ups, new products, economic development and technological advancements. March-in could effectively repeal Bayh-Dole.

NIH Director Collins Stands Up to the March in Mob

The problem with this theory is that the Bayh-Dole Act does not provide agencies the authority to regulate product prices. The law allows universities and contractors to own inventions made with federal funding so that they can be effectively commercialized. Congress included safeguards in case a dominant company licensed a breakthrough technology with the deliberate purpose of suppressing it, perhaps because it threatened an existing product. If good faith efforts are not being made to bring the invention to “practical application” so it is available on “reasonable terms” the funding agency can march in requiring that another company be licensed “upon terms that are reasonable under the circumstances.” Agencies can also march in if the developer is not able to produce enough product to meet public health or safety needs. In none of these situations is the government empowered to march in just because it doesn’t like a price.

NIH Pressured to Misuse Bayh-Dole to Control Drug Prices

Secretary Burwell and Director Collins are facing formidable pressure to reinterpret the Bayh-Dole Act for the compulsory licensing of costly drugs arising from federally supported research. And the pressure just increased another notch. On March 28, Senators Bernie Sanders, Elizabeth Warren, Al Franken, Patrick Leahy, Sheldon Whitehouse and Amy Klobuchar joined the leaders of the House Democratic Task Force on Prescription Drug Pricing urging Burwell and Collins to hold a meeting “to allow the public to engage in a dialogue with the Department of Health and Human Services and NIH in order to better understand its position on the use of march-in rights to address excessive prices.” If NIH joins in pursuing the swamp gas illusion that Bayh-Dole was intended to regulate drug pricing, we’ll quickly learn that it’s a lot easier getting into this morass than getting back out.