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
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
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