IP Explained: FACT CHECK: March-In Authority and the Bayh-Dole Act

In our last IP Explained post, we outlined how the Bayh-Dole Act laid the foundation for effective technology transfer across industries in the United States and helps foster continued medical innovation that helps patients.

The statutory framework that includes the Bayh-Dole Act facilitates technology transfer, leveraging the U.S. research and development (R&D) ecosystem with public-private partnerships to create the most envied research enterprise in the world. Despite this progress, there is a common misperception that the federal government could use its march-in authority to mandate lower drug prices.

Today, we’re going to set the record straight on how misuse of this authority could chill medical innovation and disincentivize continued collaboration between the public and private sectors – collaborations that have real benefits for patients.

MYTH: Policymakers established the march-in authority provision as a way to control prices for patented products.

FACT: Former Senators Birch Bayh and Robert Dole, the authors of the landmark, bipartisan legislation, have affirmed that “Bayh-Dole did not intend that government set prices on resulting products. The law makes no reference to a reasonable price that should be dictated by the government…the law instructs the government to revoke such licenses only when the private industry collaborator has not successfully commercialized the invention as a product.”

In fact, no federal agency has ever exercised its power to march-in and license biopharmaceutical patent rights to others in the nearly 40 years since the Bayh-Dole Act passed. Specifically, the National Institutes of Health (NIH) has received six march-in petitions. They’ve denied each one. Further, the NIH has said that “the extraordinary remedy of march-in is not an appropriate means of controlling prices.”

According to a recent report by the Information Technology and Innovation Foundation (ITIF), the misuse of march-in authority could severely damage private life-science enterprises’ willingness and ability to research and invest in new medicines, resulting in fewer new medicines for patients. The report also notes that aggressive use of march-in authority would dramatically discourage public-private partnerships and licensing agreements that return tens of billions of dollars to American universities. As a result, academia would “lose license fees and ultimately receive less money to support research, develop research labs and train students, etc.”

The technology transfer spurred by the Bayh-Dole Act has allowed for biopharmaceutical innovation and patient access to new forms of life-saving treatments. Price controls – the effect of government marching-in and forcing companies to hand over IP rights because of cost – will only jeopardize our country’s ability to deliver new medicines to address our most costly and challenging diseases.

Learn more about the value of IP protections and the groundbreaking medicines in development here.