FINAL NIST Oral Testimony – John Stanford, Incubate

We're here today to lend our strong support to the proposed clarification of the appropriate use of "march-in" authority under Bayh Dole. This authority was never intended to be used a price-control mechanism, as such an interpretation would destabilize the IP protections that drive America's global biopharmaceutical leadership


02.25.2021

Good afternoon and thank you for the opportunity to speak here today. My name is John Stanford, and I’m the executive director of Incubate, the leading coalition of investors in the
early-stage life-science ecosystem.

We’re here today to lend our strong support to the proposed clarification of the appropriate use of “march-in” authority under Bayh Dole. This authority was never intended to be used a price-control mechanism, as such an interpretation would destabilize the IP protections that drive America’s global biopharmaceutical leadership.
Since Bayh-Dole was enacted, the federal government has rejected calls for this interpretation of march-in rights. So did the authors of the law. We applaud the National Institute of Standards and Technology for codifying this.

The quest for innovation rests on strong intellectual property rights.
And while federally funded research is critical to basic scientific discovery, it is private industry – backed by private dollars and fueled by the IP protections envisioned by Bayh-Dole — that turns
promising insights into a lifesaving medicines.

The symbiotic relationship between public discovery and private development is the not-sosecret sauce for life science innovation.
In speaking with a number of our members prior to today’s remarks, it became clear I should use my time to detail the three biggest factors that private investors consider when deciding whether to take on the tremendous risk of early-stage life science:
First is an understanding of how much capital is required. Much has been written about the incredible cost of bringing a medicine to market, but even early on, tens of millions of dollars is typically needed. Investing in biopharmaceutical innovation is extraordinarily risky and extraordinarily expensive.
Second, investors — thanks largely to decades of scientific expertise — evaluate the likelihood of success. Most investments fail. Those that succeed need to be spectacular enough to cover all the losses.
Third, and most relevant for today’s conversation, investors evaluate the potential value of success. Our time horizons are lengthy – often a decade or more – and there are always an infinite number of unknowns. We take on these risks because of the potential for reward.

Consider mRNA, which was a relatively unknown platform only one year ago. Research into mRNA vaccines began more than two decades ago – and Moderna, a venture-backed startup, was launched in 2010. So for decades, scientists and investors had nothing to show for their work – at least commercially. My point is that we’ll never know what platforms, modalities, and medicines will be lost if life
science investment shrinks.

That brings me to today’s proposal.

By clearly defining that the pricing of a good arising from “the practical application of the invention” cannot be used to justify march-in rights, this agency is clearly messaging that the research industry can continue to confidently pursue innovation. With the pandemic still raging, I’m proud to stand alongside the scientists and investors that immediately began developing medicines to defeat it. In that same vein, I applaud this agency for defending and supporting American innovation.

Thank you for the time today.