Pharma body attacks ‘vague’ march-in rights plan

PhRMA says controversial draft framework misinterprets the Bayh-Dole Act and could undo years of success | FTC unanimously supports the proposal.

The  Pharmaceutical Research and Manufacturers of America (PhRMA) has launched a scathing attack on the US government’s proposed march-in framework, criticising its potential impact on innovation and stressing the need for a clear and transparent policy-making process.

PhRMA represents leading biopharmaceutical research companies in the US.

In December 2023, the  National Institute of Standards and Technology (NIST) issued a request for information on a  Draft Interagency Guidance Framework for Considering the Exercise of March-In Rights.

If implemented, this would allow government agencies to “march-in” and seize patent rights for drugs partly developed with government funding if their prices were deemed too high.

PhRMA submitted its response on February 6, 2024, arguing that the draft framework misinterprets the Bayh-Dole Act of 1980 by introducing a vague approach that would cause uncertainty.

This could reverse the progress put in motion by Bayh-Dole, said the association.

The proposal diverges from established policy precedent by urging federal agencies to consider product prices in march-in criteria evaluation, according to PhRMA.

The association argued that the draft framework's current form could create an environment of uncertainty, discouraging investments and undermining the purpose of Bayh-Dole.

PhRMA warns of ‘ripple effect’

While primarily focusing on the biopharmaceutical sector, PhRMA also warned of broader negative implications for industries reliant on technical collaboration with the US government including green tech, energy, microchip, and defence.

“The negative effects of the draft framework could have a ripple effect throughout the innovation ecosystem, ultimately reducing investment in small biotech companies and in the development of university inventions, and jeopardising future benefits to the US economy.

“The potential ramifications of the draft framework could hinder collaboration and innovation across various sectors,” said PhRMA.

The draft framework, it added, “improperly incorporates” price into the consideration of two march-in criteria, practical application and health and safety needs, contradicting the Bayh-Dole’s purpose.

PhRMA firmly rejected the argument that price should be a factor in the march-in analysis.

Additionally, the factual scenarios in the draft framework are confusing because they do not reach a conclusive decision on march-in inquiry, leading to unpredictable outcomes and a lack of clarity on the exercise of march-in rights, said PhRMA.

“If NIST cannot tell the public whether these simplistic fact patterns warrant the exercise of march-in rights, how could this draft framework inform industry and the public in real-world situations?” it argued.

Addressing NIST's goal to encourage consistent and predictable application of Bayh-Dole's march-in authority, PhRMA challenged the inconsistency.

It claimed that including certain factors in the draft framework goes against the Bayh-Dole Act, putting the success of the act at risk. The inclusion of these factors may create uncertainty and discourage potential partners, added the association.

FTC backs march-in rights

In a separate submission, the  Federal Trade Commission (FTC) responded to the draft framework outlining its support of NIST for its efforts to reactivate march-in rights as a way to prevent companies from charging excessive prices for drugs developed with public funds.

The FTC claimed its support for checks on companies charging Americans inflated prices for drugs developed with taxpayer-funded research.

The comment, issued on February 6 2024, included supporting a “broad and flexible” approach to march-in rights, including providing that agencies can march in on the basis of high prices.

The FTC highlighted the link between lack of competition, inflated drug prices, and limited access to essential treatments for many Americans in the pharmaceutical industry.

“Nearly three in 10 Americans report rationing or skipping their medications due to high costs,” it said.

The FTC argued that “pharmaceutical firms enjoy hundreds of billions of dollars of taxpayer investment in R&D”, making march-in rights “essential” to check and ensure taxpayer-funded inventions are affordable and accessible to the public.