Life sciences investors react to Biden administration’s march-in decision

After a nine-month review, the Biden administration has reached the unprecedented and misguided conclusion that the 1980 Bayh-Dole Act gives it the authority to impose de facto price controls on drugs developed with federal research funding.

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12.07.2023

WASHINGTON, D.C. (December 7th, 2023) — After a nine-month review, the Biden administration has reached the unprecedented and misguided conclusion that the 1980 Bayh-Dole Act gives it the authority to impose de facto price controls on drugs developed with federal research funding.

Incubate executive director John Stanford issued the following statement:

“This unprecedented decision — which upends more than four decades of bipartisan consensus surrounding the use of the Bayh-Dole Act’s ‘march-in rights’ — will chill private investment into biotech research and development and result in fewer lifesaving drugs reaching patients.

The Bayh-Dole Act kickstarted a new era of American innovation by removing government bureaucrats from the licensing process for patented discoveries made at federally funded labs. By giving private companies the assurance that the federal government couldn’t revoke patent licenses on a whim, the Bayh-Dole Act spurred new partnerships between universities and biotech firms. Those partnerships have resulted in more than 200 lifesaving medicines coming to market. Prior to the law, not a single federally funded drug patent was commercialized.

The law’s architects, Senators Birch Bayh (D-IN) and Bob Dole (R-KS), plainly stated that they never intended for the federal government to invoke march-in rights based on a product’s price. In fact, they explicitly clarified that ‘the ability of the government to revoke a license granted under the act is not contingent on the pricing of a resulting product.’ Both Republican and Democrat administrations have repeatedly agreed with that interpretation — until now.

The ramifications of this decision extend beyond just the life sciences and jeopardize the entire American innovation ecosystem.”

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