A Washington-based advocacy group recently petitioned the government to get the patent for the drug for prostate cancer called Xtandi for generic makers to take the medication and copy it.
The group that is behind this petition has made similar petitions before. However, each Democratic and Republican administration has denied similar petitions because they misinterpret current law, and the administration in place ought to be aware of it.
The government donated $500,000 to the research at UCLA used as the basis for the Xtandi drug. The results of the UCLA research were eventually licensed by Astellas — who has, following more significant than $1.4 billion of investment and years of development and research, came up with the medicine.
The government has funded the early-stage research that underpins Xtandi. The petitioners contend federal officials should compel them to reduce its cost by granting licenses to generic drug producers. But, of course, this isn’t permitted in the legislation that moved the drug from the bench to the bedside: it’s the Bayh-Dole Act.
Before the year 1980, America experienced an innovation issue. The federal government financed basic research at universities and non-profit laboratories and held the patents generated by the study. The inventors were not motivated to transfer their inventions out of the lab and the market. It was the responsibility of the government to authorize these patents to commercialize.
The entire process was chaotic. Twenty-six different licensing rules were in place for federal agencies that funded research. The government typically offers non-exclusive licenses. Private firms were reluctant to put their money and time within a flawed system.
In the end, less than 5percent of federally funded discoveries were licensed to commercialization. The more than 28,000 taxpayer-funded discoveries were squandered. There was not a single drug that was developed using federally funded R&D.
The Bayh-Dole Act broke that gridlock by allowing universities’ research labs to protect their patents and then license them to private companies in exchange for a royalty.
The result was a floodgate of American technological innovation. In the last two decades, U.S. universities and research institutions have received greater than 80,000 patents, and more than 70% of innovations from universities were licensed to small businesses. The law has helped grow the U.S. economy by up to $1.7 trillion.
The Bayh-Dole Act contains a “march-in” clause that permits the government to force the patent holder to license other businesses if no effort is taken to develop the technology.
Specific organizations have been trying for a long time to use the government’s march-in authority to control prices for pharmaceuticals, mainly. Administrations in the past have dismissed all petitions. The Obama administration has rejected more off-base petitions than any other administration.
This petition grossly alters what is known as the Bayh-Dole Act. If it were approved, it would be apparent to innovators that anyone could petition for the federal government to “march into” so that copiers could subvert them on the market.
There is no reason to invest in such a situation. Again, discoveries funded by taxpayers such as those leading to the prostate cancer drug that the petition focuses on will languish in laboratories.
The protection of the intellectual property is essential to the foundation of innovation, which president Obama and his administration recognized. The group behind the most recent march-in petition presented nearly identical requests to the Department of Health and Human Services and an addition to the Department of Defense and the National Institutes of Health. They all rejected them. The petitioners appealed to Trump’s administration. Trump administration and they were refused to accept the petitioners.
The protection of innovation isn’t a political issue. The Biden administration could prevent an utter drop in private-sector research and development investments by ignoring the latest petition to march in.
