AAMC Acts Collectively to Rescue NIH’s Commercialization Mission

On the day the president’s budget was released this week 300+ medically engaged entities and associations nationwide, the backbone of our nation’s biomedical research ecosystem including many universities, disease advocacy groups, and medical centers, signed a full-page ad in the WSJ and POLITICO. Sponsored by “The Ad Hoc Group For Medical Research” and paid for by the Assoc. of American Medical Collages, its purpose was to thank Congress for its recent increased support for basic medical research. Ascribing US medical and economic strength to congressional bipartisan medical research, its content was straightforward and simple.

“When it comes to the Nation’s health
There’s One thing we can all agree on
Medical research Makes America Healthier and Stronger. ”

IP Strategic gratefully salutes this concerted effort to come to the rescue of NIH’s critical role in our life science innovation ecosystem.

Within our national health care ecosystem, NIH is the bridge between congressional R&D public investment in otherwise uninvestable life science and private sector development of its commercially promising results through Bayh-Dole directed commercialization. The ad’s focus is the NIH’s bridge’s on-ramp of congressional R&D funding. For the ecosystem to work the commercialization bridge’s off-ramp of private sector investment and development also must provide public benefit with its therapies, jobs and economic development. Off-ramp commercialization requires private sector investment which in turn requires reliable patent protection. Support and direction of commercialization bridge traffic flow is NIH’s mission. That bridging mission is undercut at its entry point by the Trump budget and effectively undermined at its exit point by patent uncertainties created by Congress, SCOTUS, and the USPTO. Here are just a few: Continue reading AAMC Acts Collectively to Rescue NIH’s Commercialization Mission

Joe Allen’s Take on Price Controls

Whether the subject is Bayh-Dole price-based march-in or other government schemes to control the final pricing of privately developed products emergent from the commercially promising discoveries made possible by federally-funded life science research, Joe Allen knows what he is talking about. NIH’s mission is to see to the commercialization of such discoveries so they can become available to the public that invested in it through congressional R&D appropriations. Such curiosity-driven basic research is otherwise uninvestable. What cannot be commercialized cannot become available. This disconnect will lead to the further diminution of R&D funding for such research. However well-intended, governmentally imposed price controls deter private sector for-profit investment. This is not a theory. It is a historical fact confirmed by CRADA pricing experiment explained by Joe in his article below. Fast forward to the present. Joe’s conclusions are being confirmed now. The private sector investment withdrawals triggered by SCOTUS’ Mayo and Myriad decisions is happening now. These Sec 101 eligibility judicial missteps have created unacceptable uncertainty, not only in the life science areas treated in the actual decisions but regarding all life science “discoveries” the examiners and Courts are declaring unpatentable. Life science commercialization has never been more needed. It has never been more perilous.

As Joe Allen explains below there are better ways to skin drug pricing’s cat than crippling life science investment in applied development that is definitionally different than the hoped for curiosity-driven discoveries that made its profit-directed development possible.”Many in Congress want to impose price controls on medicines that result from

“Many in Congress want to impose price controls on medicines that result from federally funded research. We’ve tried this before, and it nearly brought medical research and development to a halt. Lawmakers aren’t wrong to want to lower drug prices, but they should find a strategy that isn’t a proven failure. These policies would have terrible ramifications for the future of National Institutes of Health-supported research and development while harming those suffering from the ravages of disease.Responding to congressional pressure in 1989, NIH officials incorporated a form of price controls known as a “reasonable pricing” clause in its licensing agreements. In short, they didn’t want to let private firms build upon publicly funded discoveries to commercialize resulting products unless the government had a say in pricing decisions. Their actions were well-intentioned. By placing conditions on medical patent licensing agreements, they hoped to decrease drug costs for consumers. But the results were disastrous.”

Here is Joe’s Fierce Healthcare article.

Congressional “chits”?

Comedienne Joan Rivers often began her monolog by asking ” Can we talk?”. Her purpose was to prepare her audience for some plain talk about a touchy subject. So channeling Joan, today I am asking readers “Can we talk? ”

Having worked around legislative bodies for almost 50 years, I am appalled when a client (or worse, a lobbyist) says ” Let’s not spend our “chits” on this or that.” It’s as though their congressional member was keeping score by counting your university’s “chits,” (whatever they are ). With the knowledge that TTO research commercialization capacity may not always be your university’s highest priority, it is essential to obtaining federal research grants and therefore critical to your university’s research mission. Commercialization is in danger and thus is well worth discussing with your home state delegation members. We appreciate that the political environments within universities can be complicated. Respectfully, communicating with Congress is not. University leadership frequently views communications with Congress as similarly nuanced and complex. However, it’s not rocket science. Members want to hear from their home state universities.

Henceforth herein I will refer to your university as “you” and the congress person or staffer with whom “you” communicate as “member” or ” she/her.”

She is not keeping score with you. Her reelection’s likelihood is of paramount importance. She is keeping score solely with her next vote count. You are an important and influential constituent. You often are one of the state’s largest employers. You contribute to in-state economic growth and development. You can favorably recognize her with awards, highly visible head-table location and athletic event seating, and you can even name buildings after her. She, therefore, wants to please you as much, and as often as possible. In today’s communication world, virtually every vote leaves a permanent trail and thus requires careful calculation. If that vote happens to coincide with your wishes, she will credit you with having convinced her — whatever her real reason. What members dislike most is being unaware of where you stand on an issue that affects you big or small. They appreciate communication because, a. they are hearing and learning from a credible constituent and, b. they want attention, not neglect. Connecting with them flatters their egos. As long as it is respectful, you cannot too often give your views on any issue that affects you.

Continue reading Congressional “chits”?

Rep. Doggett to Pres. Trump – Implement B-D Price-based March-in!

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!

Don’t Write Off Pharma’s Nightmare Scenario

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

More Trump Budget Woes

POLITICO’s Pulse is a daily report which appears to be sponsored in part by PhRMA, the drug-maker trade organization. Yesterday’s report included two items of special interest to research universities, especially those affiliated with teaching hospitals and medical centers.

  1. The first was a letter signed by 4 former FDA Commissioners, two of whom are now at Duke while another is associated with the National Academy of Medicine. It addresses concerns regarding proposed “importation ” legislation. We have commented before on the innovation ecosystem harms attendant to drug price controls and “Rube Golberg” controls promised by “importation”.

The U.S. has a “closed” prescription drug supervisory system. Drugs sold here are approved by the FDA as are their manufacturing faculties. FDA is already understaffed. They lack the resources to police importation. Counterfeit drugs already constitute 10% of US drug distribution principally through the internet. Drugs that come through Canada will be unsupervised. Like our own FDA, Canada’s supervisors lack sufficient resources to oversee conduit drug safety or their manufacture and has said it will not do so. The letter lists some of the risks assumed by enabling drug importation as a way to control drug pricing. Foreign-based criminals and terrorists may benefit but as the authors say, even if the medicine is real savings will be small and certainly not worth the risk.

There is an added concern for university affiliated distributors of counterfeit drugs which obviously are not labeled and are hard to detect. But because often they are distributed to patients who rely upon providers’ inherent assurances that the drugs are genuine, there will be liability issues triggered at university affiliated hospitals and medical centers . Any costs saved will likely be offset by increased insurance expense. Staff to hasten FDA drug approvals will expand competition. That is the safest, quickest way to lower prices.

  1. The second item involves new budget cuts to NIH (despite Cures Act increases). Since its harm to programs underway speaks for itself, we simply will quote from the POLITICO report.

TRUMP ADMINISTRATION WANTS $1.2 BILLION CUT AT NIH THIS YEAR – Overall, the administration has proposed $18 billion in cuts across more than 20 federal departments for the current fiscal year, according to a proposal sent to appropriators on Friday and obtained by POLITICO. The proposed NIH cut is one of the three largest reductions to individual agencies spelled out in the document – but the cuts are unlikely to be implemented. House appropriators have said that it’s too late for the Trump administration to request drastic cuts to agencies this year. The proposed reductions would come from long-settled discretionary spending bills and could prompt a major showdown with only a month left before the deadline to keep the government funded.

Where the cuts would come from – The NIH cuts would include a $1.18 billion reduction in research grants and the elimination of $50 million in spending on new grants. The White House also would cut more than $300 million from the CDC, with about $100 million coming from its HIV/AIDS programs and the remainder coming from various public health research programs, initiatives and preparedness.”

There Are No Microbe Martyrs

Whenever we ponder national security our optimistic focus is drawn to the Cold War’s “mutually assured destruction”. After all it worked. Who wants to die pursuing their future? Now suicidal “soloists”, North Korea’s propagandized puppets, and religious radicals seeking salvation by dying, clutter news coverage almost every day. Instinctively we hope deliberate martyrdom motivates a small minority of mankind. We blindly trust that most still think mass murder is immoral or at least unlikely to promote either human welfare or our own. Not so with microbes. They are here. Their mindless evolutionary pursuit of their survival here on earth s unrelenting. For microbes, there is only now. They are multiplying. And they are the perfect weapon for deranged minorities. Can self-proclaimed “germaphobe” Donald Trump ignore this issue? Will he expressly say again as millions die, “who knew”? Well, research universities know. Clearly NIH’s budget must be broadened not reduced.

A NY Times op-ed (March 25) headlined “The Real Threat to National Security” reiterates what Bill Gates warned two years ago, “of all the things that can kill more than 10 million people around the world the most likely is an epidemic stemming from either natural causes or bioterrorism.”  NIH can fight them both but not alone and not without congressional support. Trump Administration proposals to significantly increase military expenditures within our discretionary 2018 budget, while slicing NIH by18 percent not only demonstrate his misdirected emphasis regarding overall national science priorities, cutting NIH is now unsound from a military perspective. As we argue below, research universities must engage more forcefully on this issue.   Continue reading There Are No Microbe Martyrs

Dr. Varmus Warns Convincingly. Universities Must Back Him with Specifics

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


Trump’s budget may be “dead on arrival” but like the memorable movie title “There Will be Blood” its proposed cuts to federally funded science and medical research are deep, wide and for many university research programs, bloody. We do not yet know what will happen to NSF but if NIH’s $5.8 billion cut is any indication, the outlook for NSF and the other grant facilities is equally bloody. Read the science budget proposals. The nation’s innovation ecosystem has been put on the chopping block. Continue reading EMERGENCY Red Alert

Trump is Trapped Again

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