Mother Nature sometimes creates strange, even horrifying creatures. One of these is the Hag Fish which with its eel-like body enters the mouth of larger sick, weakened fish and once inside eats its way out. Our life science patent system has been weakened. This hag fish amendment will weaken it more. Here’s why.
A Senate Committee Report on a key bill that will eventually pass in both bodies includes an amendment misinterpreting the Bayh-Dole Act as authorizing price-control march-in. This is the B-D distorted interpretation repeatedly promoted by KEI. It has been consistently rejected by NIH and more recently by DoD. Why hag fish? Because once this misinterpretation of BD enters the congressional legislative records, it is established and can eat its way through the entire life science research innovation ecosystem by adding more uncertainty to predictable ROI on investments in commercialization partnerships.
With a unanimously-supported Senator Angus King amendment to its Report for the National Defense Authorization Act, the Senate Arms Services Committee directs the Department of Defense (DOD) to use two provisions of the Bayh-Dole Act (P.L. 96-517, as amended) to issue compulsory licenses for any drug arising from DOD-funded research, if such drug is priced “higher in the United States than the median price charged in the seven largest economies that have a per capita income at least half the per capita income of the United States. With this rigid directive in the Report, DoD will feel compelled to comply with incalculable endpoint pricing applicable to life science product price-controls “arising” from DoD-funded research. It is only a matter of time before its interpretation eats its way into to all federally supported life science grants. In light of Committee Chair McCain’s regrettable physical condition, the Committee’s floor consideration of Defense Authorization may be delayed for a while, but it will pass in this form unless we loudly register research university objections to the Report language with our home state delegations.
A similar amendment has been rejected in the House. It is unclear what will emerge in the final Joint Conference Report. But any Armed Services Committee Report language in either body is traditionally given legal deference by the DoD. Neither DoD nor NIH has supported its inclusion. Neither were consulted before its being offered and unanimously passed in Committee.
Like a hag fish, this incorrect KEI interpretation clumsily directing life science price controls has now been “endorsed” for the first time by a congressional body and is thus lurking in “the belly of B-D.” If it remains in the Report, its mistaken legal interpretation will eventually “eat its way” its way through the other research grant agency interpretations cutting-off scarce life science commercialization capital in research “arising” from federally funded life science.
What are the issues? Here is a link to an excellent Joe Allen IPWatchdog post on the subject. We cannot overstate the danger posed by this first official congressional body’s acceptance of KEI’s legal misinterpretation of B-D. It will be fatal first to life science commercialization at DoD, but eventually, it will be leveraged by KEI to overturn NIH’s correct interpretation. This Report Amendment is a congressional hag fish if ever there was one.