Senator Leahy Urges NIH to Exercise “March-in” Rights on Myriad’s Tests

The Bayh-Dole Act of 1980 grants universities the right to elect to take title in any patent application and patent that was made by their researchers with the support of the Government, e.g., NIH. 35 USC s. 200 et seq. This clears the path for universities and other non-profit institutions to license the patents, potentially exclusively, to commercial entities (like big Pharma) that, hopefully will fund further research and eventually bring a drug to market. Prior to 1980, the Government kept title, and was responsible for licensing such technology. However, due to a lack of resources and red tape, most Government-funded inventions never saw “the light of day.”

The Bayh-Dole Act changed that, and is widely considered to be responsible for the modern university tech transfer offices, and for the licensing and commercialization of many valuable drugs and medical devices. However, the Bayh-Dole Act contains a section that allows the Government, e.g., NIH, NSF, etc. , to require the exclusive licensee, Myriad in this case, to offer nonexclusive or even exclusive licenses to a “responsible applicant or applicants” under certain defined circumstances. Section 203. If Myriad refuses, the NIH can grant the licenses itself. Myriad’s only remedy would be to file suit in the Court of Claims.

On July 12th, Senator Leahy wrote to Doctor Francis C. Collins, Director of the NIH, to exercise its march-in rights to require Myriad to grant sublicenses to its assays, including the BRCAnalysis assay for breast and ovarian cancer. (A copy of this letter is available at the end of this post.) The precise rationale was not cited but apparently the requirement would be grounded on s.. 203(a)(3): “[The Federal Agency determines that such] action is necessary to alleviate health or safety needs which are not reasonably satisfied by the contractor, assignee, or their licensees.” Senator Leahy believes that the “health needs of the public are not reasonably satisfied by the patentee…because many women are not able to afford the testing provided by Myriad.”

This is a serious assault on a system that has worked effectively for 20 years. So far as I know, the NIH has never exercised march-in rights, although it has been urged to do so. Some years ago, HIV activists urged the NIH to grant licenses to certain anti-HIV drugs, to make them available for a reduced cost, as by having them manufactured in India. This letter was probably prompted by the new suits filed by Myriad against companies who stated that they would offer the Myriad tests, presumably at a somewhat reduced cost. I don’t think that NIH wants to enter the licensing arena to this extent, given the reduction in its budget recently, but it may end up with no choice.

LeahyGeneTesting

2 Responses to “Senator Leahy Urges NIH to Exercise “March-in” Rights on Myriad’s Tests”

  1. Warren,

    I am aware of only one prior serious attempt to get the NIH to exercise march-in right, that related to the CellPro/Baxter infringement suit about 15 years ago. You probably also remember the incident. Harold Varmus (NIH Director at the time) issued a very well-reasoned decision refusing to exercise march-in rights. Here is the link: http://www.ott.nih.gov/policy/cellpro-marchin.pdf. I think the same rationale that governed in CellPro should apply here.

    Best regards,

    Geoff

  2. Warren,

    Nice post. Indeed, this is a serious move with potentially far-reaching consequences for Bayh-Dole patents relating to healthcare. If the Committee’s letter ultimately leads to compulsory licensing, this action, coupled with the adverse effects of the Prometheus and Myriad decisions, will cast a chill on patent-backed investments in the development of new drugs and diagnostic tests, if not eviscerate them altogether, at a time when public money is getting harder to come by and the healthcare industry is left more reliant on access to large amounts of private investment. Before this grave step is taken, the Committee and the NIH should carefully consider other available alternatives that will address their concerns without undermining the value of patents and the protections they offer for incentivizing discovery and commercialization in the healthcare sector. Librassay is one such solution created by the private sector without government intervention that balances access with incentive to achieve this result. The Librassay patent licensing platform offers non-exclusive patent licenses for diagnostics to everyone on fair, reasonable and transparent terms that minimize the royalty burden on licensees while generating a reasonable return that preserves incentives for innovators and investors. The NIH is a participant in Librassay. Placing relevant patents in the Librassay program can achieve widespread licensing without the chilling effect of a compulsory license precedent in an industry and an economy that deserves every chance to flourish.

    Kristin Neuman
    Executive Director, Librassay
    MPEG LA