Abusing March-in Rights Would Jeopardize COVID-19 Research
By David Winwood
Thirty-one state attorneys general recently urged the Trump administration to disregard the intellectual property protections on remdesivir -- the only FDA-approved treatment for COVID-19 -- and then license its patents to multiple drug manufacturers.
These attorneys general claim that this action would make the drug more affordable and accessible, and further claim that the 1980 Bayh-Dole Act gives the federal government the power to take such action.
But they're wrong -- the Bayh-Dole Act doesn't apply in this case. Even if it did, arbitrarily seizing an inventor's intellectual property would set a terrible precedent -- one that would threaten the health and prosperity of nearly every American for decades to come.
The Bayh-Dole Act is the backbone of America's research ecosystem. The law enables academic and non-profit institutions to retain the patents on their own research discoveries, even if that research was funded in part by federal grants. These universities and non-profits can subsequently license those patents to private companies, which have the skill and capital to turn good ideas into viable products.
Unsurprisingly, America's economy is stronger because of the law. Bayh-Dole-related discoveries support up to 6 million jobs and $865 billion in GDP. Bayh-Dole also enables urgently needed medical innovation. Moderna's leading COVID-19 vaccine candidate, for example, was partly built on research licensed from some of the nation's leading academic institutions. The law has also helped facilitate the discovery of more than 200 other medications, including Allegra®, FluMist®, nicotine patches, and dozens of cancer therapies.
The basic ideas behind these products had their origins in university laboratories. But to become market-ready inventions, each required hundreds of millions of further investment and years of development work, virtually all provided by the private sector.
The state AGs claim that the "march-in" rights embedded in the Bayh-Dole Act allow the federal government to relicense patents that resulted from federal funding. That's true -- but the law only permits this in extreme cases, such as when a company has licensed a university invention but refuses to produce it, while also preventing other firms from developing it.
That's not what's happening with remdesivir -- which wasn't invented in a university laboratory supported by federal grants. So, the Bayh-Dole Act doesn't apply, according to the U.S. Department of Health and Human Services.
Even if remdesivir was a "Bayh-Dole" drug, the manufacturer, Gilead Sciences, has done nothing to withhold its production. Gilead already donated its entire existing supply -- 1.5 million doses -- to the U.S. government and licensed the drug to other manufacturers for worldwide production. And it's producing millions more doses and providing them at prices that are deemed reasonable by independent watchdogs.
Using emergency march-in rights as a de facto price control would send a chilling message to companies in every industry -- don't bother investing billions of R&D dollars to turn federally funded inventions into real-life, market-ready products, since the government will just steal the fruit of your labor.
Bayh-Dole helps us live healthier, more prosperous lives. We should nurture this innovation -- not squash it by inappropriate use of march-in rights.
David Winwood has worked for almost twenty-five years in university technology transfer and economic development roles at several research-intensive public universities. He previously served as President of the AUTM.
