NIH Pulls Back on Using Bayh-Dole for Drug Pricing

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By Jeannie Baumann

April 7 — The NIH director April 7 indicated a reluctance to use the agency's march-in rights to reduce the cost of prescription drugs.

“I’m not sure NIH is in a great position here in terms of the levers that need to be pulled to try to do something about what everybody agrees is a difficult situation,” Francis S. Collins, director of the National Institutes of Health, said during a Senate Appropriations budget hearing.

Under the Bayh-Dole Act (Pub. L. No. 96-517), the federal agency that funded research leading to an invention can “march in” and issue patent licenses on its own—thereby ignoring exclusivity rights—if “reasonable terms are not being met’’ on drug pricing and if the agency has the intellectual property on the drug's molecule. Lawmakers in both chambers recently called on the Department of Health and Human Services to exercise its rights to license generic versions of Astellas Pharma Inc.'s prostate cancer drug Xtandi as part of an effort to reduce the drug's price .

“Certainly as a physician, I would never want to see a circumstance where an effective drug was not available to someone who needed it,” Collins said.

Case-by-Case Basis

During questions before the labor-health subcommittee of the Senate Appropriations Committee, Collins stopped short of ruling out the possibility of ever exercising the NIH's march-in rights for drug pricing. He said the agency would evaluate each situation on a case-by-case basis. However, his response before the Senate panel was more hesitant to exercising march-in rights than when the same question came up before House appropriators several weeks ago .

After a recent look into the statutory language of Bayh-Dole, Collins said, the march-in rights do “not really appear to be designed to be utilized in a fashion where the price is the obstacle.”

“It seems to be more a circumstance where the product was simply not available because it was not being commercialized and then NIH had the authority to step in and take over,” he said.

“If we begin to march in in a very broad way about drug pricing,” Collins said, drug companies may lose interest in working with the NIH to develop new treatments.

Durbin: Overpriced Means Not Accessible

Sen. Richard J. Durbin (D-Ill.), who raised the issue of drug pricing during the NIH appropriations hearing, said he agreed that the NIH should exercise march-in rights sparingly. However, he suggested the NIH still needs to make a statement about the high cost of drugs that were developed in part with public funding. He suggested the NIH needs to consider drug pricing as part of the scope of accessibility of a drug.

“Accessibility goes beyond physical accessibility. If a drug is overpriced, it is not accessible to a consumer,” he said.

Durbin said he accepted Collins's premise that he doesn't want to abuse the NIH's march-in rights.

“But if you cannot find one egregious example where you could apply this, I would be surprised,” Durbin said. “And applying it even in one case sends at least the message to the pharmaceutical companies across America that patients need to have access to drugs that were developed with taxpayers expense and the research that went into it.”

To contact the reporter on this story: Jeannie Baumann in Washington at

To contact the editor responsible for this story: Janey Cohen at

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