Four non-governmental organizations (NGOs) have filed a petition with the National Institutes of Health (NIH) requesting that it grant march-in rights under the Bayh-Dole Act for a patented drug that they claim is “a federally funded invention that is much more expensive in the United States than in Canada, Europe or other high-income countries.” At issue is an antiretroviral protected by six patents. The NGOs are Knowledge Ecology International, the American Medical Students Association, U.S. Public Interest Research Group, and Universities Allied for Essential Medicines. Noting that in the 31 years such rights have been available, the NGOs claim that “NIH has never granted a march-in request.”
Under the law, an agency that funds the research leading to a patented invention may on its own initiative or at the request of a third party ignore the exclusivity of a patent awarded under the Act and grant licenses to other “reasonable applicants.” This right is strictly limited to instances such as where (i) the patent holder fails to achieve “practical application” of the invention, defined as making the invention’s benefits “available to the public on reasonable terms”; (ii) action is necessary to alleviate health or safety needs that are not “reasonably satisfied” by the patent holder; or (iii) action is necessary “to meet requirements for public use specified by Federal regulations,” and that use is “not reasonably satisfied” by the patent holder. When exercising march-in rights, the government may require the contractor/patent holder to issue a license “upon terms that are reasonable under the circumstances” or may itself grant a license.
The petitioners urge NIH to find that a product’s price should be considered when assessing whether a patent holder has failed to make benefits available to the public on reasonable terms. To that end, they also recommend that NIH adopt two policy rules: first, that U.S. prices presumptively be considered unreasonable and licenses be granted to competitors to supply the product to consumers, if U.S. prices are higher than seven of 10 comparison countries or 10-percent higher than the median price of the reference countries; and second, that march-in rights be awarded if a product based on a patented invention is a drug, medical device, diagnostic, or similar invention, and it is used or is potentially useful “to prevent, treat or diagnose medical conditions or diseases involving humans, and its co-formulation, co-administration or concomitant use with a second product is necessary to effect significant health benefits from the second product, and the patent holder has refused a reasonable offer for a license.” See Knowledge Ecology International News Release, October 25, 2012.