Arizona Chamber and national groups say Biden administration proposal undermines intellectual property, ignores law

The Arizona Chamber of Commerce & Industry is speaking out against a proposal from the Biden administration that would permit the federal government to determine the price of pharmaceuticals or other innovations whose research and development was partially funded with federal dollars. 

The Chamber argues that such an expansion of so-called “march-in” rights is a form of price controls that will disincentivize future research and lead to fewer lifesaving discoveries. 

“We have deep reservations over a proposal that would erode intellectual property protections and seek to impose price controls on lifesaving pharmaceutical innovations,” the Chamber said in response to the Biden administration proposal that was published in the Federal Register in December. 

Responses are due this week. 

March- in rights 

March-in rights refer to the authority granted to the government to require a patent holder to make their patented technology more widely available under specific circumstances; an intervention known as “marching in” because the government steps in to assert its ability to dictate the technology’s use and availability thanks to partially funding its discovery and development. 

The Chamber argues that the White House’s proposal would undermine the 1980 Bayh-Dole Act, a law named for former U.S. senators Birch Bayh, D-Ind., and Bob Dole, R-Kan., that outlines the situations in which march-in rights can be exercised. 

Pricing is not one of those circumstances, says the Chamber. 

“However, the cost of pharmaceuticals was never contemplated as an allowable circumstance to exercise the march-in provision. Doing so would be an unprecedented misapplication of Bayh-Dole,” the Chamber says. 

State chamber opposes price controls 

Chamber President and CEO Danny Seiden says his organization opposes price controls on pharmaceuticals. 

“We’ll oppose price controls on pharmaceuticals, whether they’re attempted via the legislative process or through the regulatory state,” Seiden said. “If drugmakers can’t have at least some confidence they can recoup their investment in life-changing and lifesaving innovation, why should they undertake such expensive and time-consuming research? If the government is going to dictate pricing, then it’s patients who will lose out.” 

National groups weigh in

National groups like the National Association of Manufacturers and the US Chamber of Commerce sounded similar alarms over the administration’s proposal. 

NAM, which requested an extension of the filing deadline, wrote in December, “The significant changes contemplated by the RFI would apply to all technologies, raising the spectre of government price controls on wide swaths of the American economy. The most profound impact of these changes will be felt by small and medium-sized manufacturers in critical sectors such as advanced manufacturing, semiconductor production, clean energy, advanced materials, life sciences and many others.” 

NAM also said, “Disincentivizing small businesses from undertaking early-stage, potentially groundbreaking research could have a detrimental impact on job creation and innovation throughout the economy.” 

The US Chamber, which also requested a deadline extension, led a coalition of groups opposing the administration’s draft guidance, writing, “The potential changes to march-in rights could alter the landscape of intellectual property rights across all industries and have far-reaching effects on research, development, commercialization, and innovation.” 

Seiden says the administration’s disregard of the nearly 45-year-old Bayh-Dole Act is extremely troubling. 

“As we said in our official response, if the administration doesn’t like Bayh-Dole, it should work with Congress to change it,” he said. “But just blatantly ignoring the law – and doing so to control drug prices – is likely a ticket to a lawsuit, and rightly so. This White House proposal punishes companies for bringing new innovations to market. The consequences will be severe.”

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