By Rachel Sachs
On Monday, a group of over 50 members of Congress sent a letter urging the Department of Health and Human Services (HHS) and the National Institutes of Health (NIH) to use a little-known statutory provision to take action against high drug prices. Their goal is laudable, and HHS and the NIH should certainly offer guidance in this area – but the existing law offers only a partial solution to the problem as the legislators describe it.
The members of Congress wrote to remind HHS and the NIH of a provision in the 1980 Bayh-Dole Act giving the government “march-in rights” to patents resulting from government-funded research. More specifically, the statute spells out a range of conditions under which the government may require a patentholder to grant licenses on reasonable terms to others to practice the patent. The government may require such a license where “action is necessary to alleviate health or safety needs which are not reasonably satisfied,” 35 U.S.C. § 203(a)(2), or where the benefits of the invention are not being made “available to the public on reasonable terms,” 35 U.S.C. § 201(f). The legislators argue that many drugs today violate these conditions, as even many insured Americans cannot access prescription drugs without incurring significant financial harm.
Although the “march-in rights” provision has existed in the statute since 1980, it has never been exercised by the federal government, even when it has been specifically asked. And some of these cases have been paradigmatic examples where “health or safety needs” are not being satisfied. A December 2015 study notes that in Bayh-Dole’s history, there have only been five petitions requesting that the NIH exercise its march-in rights. Three of those requests were based on high prices for drugs for HIV/AIDS and glaucoma, and one was based on a persistent drug shortage which may have caused the deaths of people with Fabry disease, a rare condition. (The fifth petition involved a medical device under patent litigation at the time.) The NIH denied each request. Some scholars argued that if the NIH denied the Fabry disease petition, where Genzyme’s drug shortages lasted for multiple years and caused great suffering, possibly including death, there may be no circumstances under which the NIH would grant such a petition.