This week, Congressman Lloyd Doggett released the march-in letter we warned about several weeks ago. Its KEI sponsors then said they were waiting for things to “quiet down” before its release. We assume they tired of waiting. Rep. Doggett’s press release and letter (both linked below) is signed by 51 Democrat House Members and is addressed to President Trump. Misinterpreting Bayh-Dole, the letter demands presidential pressure on NIH to issue guidelines for the B-D price-based march-in order to enable compulsory licensing of prescription drugs. As Francis Collins has explained to Congress, the 1995 CRADA retraction episode conclusively proved that even the possibility of such price controls would deter the private investor research in university life science commercialization NIH needs to implement NIH’s life science mission. To prove his point Collins expressly pointed to the CRADA experience in the “90’s. Speaking at a more recent KEI conference on compulsory licensing, AUTM representative Ashley Stevens echoed Dr. Collins’ comments by emphasizing the Doggett proposal’s inevitable harm to research university education research and public benefit mission. Continue reading Rep. Doggett to Pres. Trump – Implement B-D Price-based March-in!
Our Report’s title repeats a headline in today’s “Heard on the Street” section of the Wall Street Journal. Readers may have missed it but investors won’t.
The piece suggests that despite strong polling support for prescription drug price controls, equity investors seem to be ignoring Capitol Hill where the “Improving Access to Affordable Prescription Drug Act” (The Act) was introduced last week in both the House and Senate. (Both are similarly worded and linked below) As the WSJ article emphasizes, investors in pharmaceutical stocks may think they have time to watch and wait. The WSJ says their investments may soon be significantly devalued. Why should we care?
Investment in drug stocks is conceptually no different than related higher risk investment in the promising discoveries of early stage life science research. VC’s read the WSJ. If VC investors in life science research cannot calculate projected ROI they will not invest. If the Act passes their inevitable absence will eventually end life science research commercialization because without them NIH’s cannot complete its Bayh-Dole (B-D)-directed commercialization mission. HR 1776 and its senate counterpart can soon become the beginning of the end. Perhaps its authors saw B-D’s collapse ahead. The Act initiates prize-incentivized life science research. It establishes NIH medical centers for clinical research. Many research universities depend on life science grants to attract scientific talent. For universities and medical centers that rely on access to life science grants, university engagement in the commercialization impacts of proposed drug price controls is an existential imperative. Continue reading Don’t Write Off Pharma’s Nightmare Scenario
The seismic disruption of President Trump’s 2018 budgeted NIH funding cuts cannot be ignored because their future impact will not be erased this time by the usual congressional brush-off of “dead-on-arrival”.
Nobel Prize recipient and former NIH and NCI Director Harold Varmus has warned us in a NYT guest editorial today.
“A substantial N.I.H. budget cut would undermine the fiscal stability of universities and medical schools, many of which depend on N.I.H. funding; it would erode America’s leadership in medical research; and it would diminish opportunities to discover new ways to prevent and treat diseases.”
In his op-ed Dr. Varmus explains in concise detail why the proposed deep cuts may later be partially compromised but not entirely cancelled, thus undermining the continuation of grants already committed to their Bayh-Dole development of much-needed biomedical therapies, already scarce new projects, and the training of today’s junior scientists. Research universities must act now if they and NIH are to be spared the existential harm of further lowering NIH’s decade long flattened funding. Continue reading Dr. Varmus Warns Convincingly. Universities Must Back Him with Specifics
The fog of war on the Hill is thick. Now chaos is the only constant. This is not your usual “dead on arrival” termed presidential budget where negotiation showmanship calls for partisan disdain. These players are all Republicans. The victim list includes almost everyone. As long as Trump’s advisors are calling the shots, Speaker Ryan’s choice is to accept Trump’s “Deconstruction of the Administrative State” or follow former Speaker Boehner’s footsteps into retirement. The disrupted atmosphere promises incapacitating injury to all non-military entities. There will be no exceptions made for the low hanging fruit of R&D’s annual $130 billion budget allocation. And as the saying goes with massive budget cuts, ” if you are not at the table, you are on the menu “. It isn’t validated yet officially but the simple math of discretionary federal budget remainders following a $54 Billion military increase and educated whispers point to the coming cut of at least 8% to10% in R&D research by Trump’s budget proposal, doubling down on the Control Budget Act’s sequester.
As we have said before, Bayh-Dole commercialization is like a bridge having an on-ramp and an off-ramp. Its off-ramp is quickly narrowing as private capital backs away from piling up uncertainties enveloping the future of patent enforcement as Congress and the courts keep moving the goal posts of patent reliability. Post development PTAB nullifications, looming life science price controls and the confused subjective analysis of Alice/ Mayo eligibility have combined to virtually defeat the prudent possibility of private investor participation in ROI-driven B-D partnerships. Now however, B-D’s protective focus is shifting to the commercialization bridges’ on-ramp entry by R&D’s basic science funding through federal grant agencies.
The federal government’s “deconstruction” is taking shape in reality not just rhetoric. The parlous consequences for universities are well described in an WSJ op-ed last December by MIT’s President Rafael Rief, who after highlighting findings of a National Science Foundation report ….. Continue reading Commercialization Bridge On-ramp “Loss is as Lethal as Off-ramp Failure”
Our last post referenced the Advanced Patent Law Institute opening Panel’s concerns about the decline of investment in commercialization caused by a precipitous decline in patent reliability and pervasive patent legal uncertainty. Life science commercialization drew extra emphasis because of the seemingly simple but complex ramifications of price controls for prescription drug products. Bayh-Dole march-in’s compulsory licensing and importation of drugs through Canada were joined last week by prominent discussion of repealing the “nonintervention” law, the statutory prohibition of direct negotiations with drug makers over the price of Medicare prescription by President Trump replacing the insurance companies and PBM’s who negotiate now.
Many believe such negotiations will lower prices. In some cases maybe yes …in others maybe no. Trump said they would save 3 billion dollars. CBO has said savings, if any, would be small. Negotiators however must be ready to disagree. Non-agreement means reducing access to certain medicines because disagreement means removal from patient formularies. While the conference was pondering the commercialization effects of price controls at the USPTO President Trump was meeting with Representatives Cummings to discuss the direct negotiations issue. Speaker Ryan could not have been pleased to see the meeting get two day’s news coverage.
On Saturday NPR commentator Scott Simon caught up with Rep Cummings to learn more about his White House meeting. Cummings said not only that the meeting went well but that Friday night he was advised by the president that he would try to insert repeal of the non-interference law into the contentious ACA repeal debate which began last week. The meeting went well for Cummings to be sure. For Trump …not so much. There is no way Cummings will support ACA’s Repeal and Replace no matter what Trump does but the meeting and its outcome added more uncertainty to the commercialization issue. When Simon asked Cummings about the meeting’s outcome this weekend Cummings, who is one of the president’s harshest critics, cleverly drew Trump back into the direct negotiations debate….
CUMMINGS: I think that we have a chance. As a matter of fact, as late as yesterday – last night – he told me that he’s going to try to get it into his bill.
SIMON: He told you this last night, Friday night.
CUMMINGS: Last night, that’s right. So we’ll see what happens. You know, with President Trump you – I think you have to wait and see. You’re going to have a good conversation. It sounds like he’s going in the direction that you’re going in, and people have told me you step out of the room and next thing you know maybe something has changed. But the conversation that we had with him was a very good one.
Earlier in his interview Simon asked why direct negotiations were not provided for during ACA’s original enactment, noting that true negotiations can only occur when one of the parties can walk away if they do not agree. In effect, he was asking if the president was ready to exclude formerly included drugs from patient formularies. Continue reading Trump is Trapped Again
Bayh-Dole’s (B-D) commercialization of federally-funded basic research is the bridge connecting annual $130+ bn. congressional funding to its congressionally intended public benefits of jobs, economic development and scientific progress. This B-D bridge’s on-ramp is controlled by federal grant agencies, each with its own mission. Life science’s on-ramp is supervised by NIH. Its off-ramp exit is policed by the FDA. Life science’s high-risk commercialization crossing to the off-ramp is difficult, long and costly. Its chances of reaching and using the FDA managed off-ramp are statistically slim. Continue reading Elimination of Further R&D Funding
The pre-election clamor about prescription drug pricing took an interesting turn last week following President Trump’s meeting with prescription drug-makers at the White House. Earlier this year pricing abuse by rogue firms whose lack of competition in certain markets enabled upward price ratcheting attracted glaring press outrage leading to presidential campaign promises to curb prescription drug pricing if elected. Unfortunately, top down price controls cannot cure this market malady. Indeed, by choking-off investment in basic life science research to develop cures advancing competition they will only worsen it. Post-AIA uncertainty plaguing commercialization is shrinking independent private investment in the long and costly development of high-risk life science products, shielding sole suppliers to certain patient markets from competition. Continue reading Trump Moves Towards Life Science Support
Like the proverbial “tango”, research university commercialization of basic research “takes two”; university TTOs and private sector investors. To attract such investment its subject matter must promise prudently estimated commercial development returns. Investors also must estimate that such development can be executed and competitively distributed at a price sufficient to provide a reasonable return on their investment. Such “reasonableness” in markets is a function of lost alternative opportunity costs, applied research risk, development and added capital costs, endpoint market demand and sometimes regulatory approvals. Patents may provide protection from competitive duplication for a limited period, but sales at the product’s optimal price point are the ultimate determinant of investor success. Optimal price selection combines experience, economics, art and science in functional complexity not normally housed in government. Bayh Dole’s market-based dynamic does not intrude on the price selection of product developers because in its absence prospective investors cannot prudently estimate their potential return on investment. The wisdom of this approach is not only theoretically obvious, we have seen this movie before with “CRADA”. Continue reading CRADA. . .Market Reasonable vs. Politics Reasonable
Because TT commercialization requires prudent private sector investment, increasing uncertainty regarding post-patent and post-development patent and pricing reliability threatens Bayh-Dole TT commercialization. Patent reliability and investor pricing aegis are critical prerequisites private sector entrance into commercialization partnerships. Both are now under attack. now it appears that R&D funding for disposition by federal grant agencies also is under concerted attack. When the NY Times and the Wall Street Journal publish op-eds attacking federal funding attacking NIH and research universities, the attack is confirmed and must be met head-on. Continue reading Bayh-Dole Commercialization Under Attack
This New York Times above-the-fold hit piece is designed to support price-based march-in and generally damage Bayh-Dole. It tells us that enemies of B-D obviously plan to engage again and to use drug pricing as their weapon of choice. Engineered by James Love of KEI, it attacks a seemingly successful CRADA partnership, refers to unrealized capital gains as “profit’ (which could be wiped out by a future adverse FDA ruling), misstates NIH’s repeated conclusions that price-based BD march-in is not authorized by BD, factually saying it is now available to curb drug pricing. Continue reading Harnessing the U.S. Taxpayer to Fight Cancer and Make Profits – The New York Times