Bayh-Dole Threat Sits Idle

By: Marcus J. Hopkins, Blogger

In January 2016, Rep. Lloyd Doggett (D-Texas) led a group of over 50 House Democrats in asking the Department of Health and Human Services (HHS) to open the door to using “march-in rights” to break patents whenever drug manufacturers set prices for their drugs prohibitively high. HHS Secretary Sylvia Matthews Burwell has, once again, maintained the HHS position that this simply isn’t going to happen.

If the concept of “march-in rights” seems confusing, that’s because it is. Essentially, the “march-in rights” provision of the Bayh-Dole Act allows the government to essentially ignore patent rights if government funding has been used in the creation of the patented product, and then, only if one of four criteria are met: (1) the right-holder “has not taken, or is not expected to take within a reasonable time, effective steps to achieve practical application of the subject invention in the field of use;” (2) the right-holder has not reasonably satisfied “health or safety needs;” (3) the right-holder has not met public use requirements specified by federal regulations; or (4) the right-holder has not satisfied the Bayh-Dole requirements to give certain preferences to U.S. industry.

Image of a stethoscope wrapped around a $20 bill , laying next to an open medication bottle

Affordable Healthcare

The Bayh-Dole Act came about in response to the economic malaise of the 1970s and to the overly complicated and incredibly bureaucratic process of being granted a patent after using Federal resources to conduct research and development. After World War II, President Roosevelt was dogged in his pursuits of scientific breakthroughs and achievements, and funding was heavily stacked in favor of leading the world in those breakthroughs. However, prior to the Bayh-Dole Act, the government had acquired around 28,000 patents, but only 5% of them were used in commercial applications (General Accounting Office, 1998). The Act was supposed to solve those problems.

The unfortunate consequence of this Act has been that private entities can use endless government funds to create products that are intended to benefit the general public, turn around to file a private patent on said product, and essentially charge whatever they please for public use of said product. As a card-carrying Socialist, myself, I find this most perverse – that taxpayer-funded products should then be sold back to the taxpayers whose money already paid for it at a potentially exorbitant price is, to my way of thinking, capitalism at its absolute worst.

Particularly in the field of medicine, this practice has led to an explosion in two things: fast development in pursuit of higher profits and exponential increases in the price of usage. We went from a system in which children were given vaccines for childhood illnesses for free at public schools, to one in which parents are required to have their children vaccinated on their own dime, even though their dimes – along with everyone else’s – have already paid for those vaccinations.

As of January 2015, no Federal agency has exercised its march-in rights. To date, I believe that is still the case. This marks the sixth petition to the HHS to exercise its march-in rights to address the ever-increase pricing issues related to “specialty” drugs – drugs marketed to specifically address only a single disease or a single aspect of a disease – two of which regarded the use of Norvir (ritonavir). The first came in 2004 after the maker of Norvir, Abbott Laboratories (now AbbVie), raised the price of their drug by roughly 400% in the U.S…but, nowhere else in the world.

That’s right: nowhere else in the world does Norvir cost as much as it does in the U.S. Globally, the wholesale cost of Norvir is between $0.07 and $2.20 a day (Drugs[dot]com, n.d.); in the U.S., that cost is about $9.20 up to $55.00 per day, depending on the dose (International Drug Price Indicator Guide, 2014).

The HHS position on price-related march-in rights has been to essentially say, “It’s Congress’ job to deal with drug prices; not ours.” Sadly, I’m not certain that Congress may ever been in a position where that can be effectively done. Although there is certainly disagreement over the degree to which the Pharmaceutical Research and Manufacturers of America (PhRMA) influences Congressional action related to drug prices, there is little disagreement that the influence is there.

PhRMA is dogged in protecting its right to charge whatever it wants for product that they insist were made using their ingenuity alone, regardless of whose money was used in the making. They’re more than willing to receive billions of dollars in federal funds to create products that are meant to heal the public, but they’re less willing to charge reasonable prices for those taxpayer-funded products. Any suggestion that this practice is either unsavory or unethical receives the “This isn’t Communist Russia!” treatment, so favored by vulture capitalists. Furthermore, any movement to address the issue of drug pricing is met with threats of leaving the country to do business in “more hospitable” climes – basically, extortion – and no member of Congress wants to be seen as a “job killer.”

In the case of drug prices, however, something clearly must be done, whether or not the drug manufacturers like it, and if legislative efforts aren’t going to happen, maybe it’s time to march-in on these territories and start putting the taxpayers’ dollars to work FOR them, rather than against them.

References:

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Disclaimer: HEAL Blogs do not necessarily reflect the views of the Community Access National Network (CANN), but rather they provide a neutral platform whereby the author serves to promote open, honest discussion about Hepatitis-related issues and updates. Please note that the content of some of the HEAL Blogs might be graphic due to the nature of the issues being addressed in it.

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