Feds to Review March-In Authority on Drug Patents

The escalating attack on too-high prices for prescription medicines has heightened debate over the government’s authority to revoke licenses for medical products that are developed with support of public funds. The Department of Health and Human Services (HHS) and Department of Commerce (DOC) recently announced a broad review of the “march-in” authority provided in the Bayh-Dole Act of 1980 in the wake of its controversial decision to let stand licensing rights to a widely used cancer drug.¹

The review will be conducted by a new Interagency Working Group for Bayh-Dole, which is charged with updating the framework for altering march-in provisions spelled out in that legislation. A main issue is whether a high price for a product provides sufficient reason to revoke a manufacturer’s license. HHS will hold a workshop later this year to discuss when it might be appropriate to implement march-in rights, with input from patient groups, industry, academic, nonprofit organizations, and legal and policy experts. And the discussion will be informed by a recent publication from National Institute of Standards and Technology (NIST) that proposes changes to streamline and clarify licensing procedures for federally funded inventions.

Challenging Xtandi and Moderna

This issue hit the headlines recently when the National Institutes of Health (NIH) rejected a petition to initiate march-in proceedings for the prostate cancer drug Xtandi (enzalutamide), marketed by Pfizer and Astellas Pharmaceuticals.² Public interest groups had filed a petition in 2021 that called on NIH to take ownership of the patents on the drug due to its much higher cost in the US than in Canada and other countries, which limited patient access to the therapy.

At the same time, Congressional leaders highlighted the substantial NIH funding of Moderna’s COVID-19 vaccine in challenging the company’s plan to raise the price of the preventive when federal subsidies end in May. In testimony before the Senate Health, Education, Labor, and Pensions (HELP) Committee Wednesday, Moderna CEO Stephane Bancel emphasized the years of research and billions invested by his company to devise methods for quickly testing and producing such a vaccine].³ Committee Chair Bernie Sanders (I-Vt) highlighted the $1.2 billion invested by the federal government in the project in blasting the company’s plan to boost the price from $26 to $130 per shot with the end of the COVID health emergency.⁴

The Bayh-Dole Act of 1980 provides a pathway to facilitate commercialization of inventions, including biomedical products, that are developed with support from federal agencies such as NIH. The program permits the government to “march in” to rescind licensing rights if it determines that the benefits of such inventions are not available to the public on reasonable terms. Over the years, various organizations have petitioned NIH and other agencies to initiate march-in proceedings when a product’s high cost might be considered a barrier to access. But federal officials have rejected such pleas, as with several petitions related to Xtandi.

In rejecting the latest filing on Xtandi, NIH stated that the aim of Bayh-Dole is to promote commercialization and public availability of government-funded inventions, and not necessarily to ensure a low price for a covered medical product. NIH noted that Xtandi is widely available to patients, and that instituting march-in rights was unlikely to lower the price. Sen. Sanders and patient advocates clearly disagreed with the NIH decision, pointing out that Xtandi can be purchased in Canada for one-fifth the US price. But manufacturers and industry experts counter that without private sector investment and know-how, most government-funded research would never move from the laboratory to the marketplace—at any price.

Jill Wechsler is Pharm Exec's Washington Correspondent and can be reached at jillwechsler7@gmail.com.

References
1. https://www.hhs.gov/about/news/2023/03/21/hhs-doc-announce-plan-review-march-in-authority.html
2. https://www.keionline.org/wp-content/uploads/NIH-rejection-Xtandi-marchin-12march2023.pdf
3. https://www.help.senate.gov/imo/media/doc/Stéphane%20Bancel%20Written%20Testimony.pdf
4. https://www.help.senate.gov/chair/newsroom/press/prepared-remarks-help-committee-hearing-on-moderna-covid-19-vaccine-pricing-ceo-to-testify