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FreedomWorks Foundation Submits Comments on Intellectual Property Rights

04/05/2021

Today, FreedomWorks Foundation submitted a formal comment supporting a proposed rule by the National Institute of Standards and Technology that seeks to provide clarity to federal "march-in" rights under the Bayh-Dole Act of 1980. In short, the Bayh-Dole Act lays out the framework for providing inventors the title to their innovations that are either wholly or partially publicly funded. Within this framework exists a little-known provision that give federal agencies the authority to "march-in" and force title holders to provide a license for their product where they otherwise would not have, creating a loophole by which the federal government could implement price controls on private companies.

In fact, Vice President Kamala Harris has expressed support for using march-in as a method to impose strict price controls on pharmaceuticals and other healthcare products. This proposed rule would affirm Congress' intent that march-in rights are not intended to be used to create price controls, as well as provide more regulatory clarity around Bayh-Dole's implementation.

The text of the formal comment can be found here, in the attachment at the bottom of this page, and excerpted directly below:

In July of 2019, while still on the campaign trail, then-Presidential Candidate Kamala Harris reportedly supported using march-in rights “to license a drug company’s patent to a lower-cost competitor.” Since that statement, stakeholders in many industries, not only pharmaceuticals, have been left worrying about whether or not the Biden administration might force them to accept a detrimental license under march-in. President Biden’s use of emergency authorities under the Defense Production Act and continued emphasis on federal control of supply chains have only added to this worry.

This proposed rule promulgated by the National Institute of Standards and Technology (NIST) is a huge step toward providing those stakeholders with the regulatory certainty they deserve. This proposal includes several positive changes to the way we administer intellectual property protections, including procedural clarifications and streamlined requirements. Perhaps most important is the decision to clarify § 401.6 and affirm Congress’ intent that march-in is not to be used to implement a system of price controls.

One of the latest obsessions of politicians and pundits on both sides of the aisle is the utilization of some sort of price control mechanism in an attempt to lower the price of products -- pharmaceuticals in particular. Yet, as FreedomWorks Foundation has repeatedly asserted, such a system would likely exacerbate the problem of high drug prices. The intent of such proposals -- to bring drug prices down -- is praiseworthy, but the reality of price controls is that they end up driving down investment and innovation and rarely have a positive effect on true pricing. Furthermore, federal price controls are a gross overextension of federal authority to artificially control the national and global economy