Tech Transfer eNews Blog

Cold Spring case illustrates Bayh-Dole risk in midst of drug price controversy

By Jesse Schwartz
Published: January 24th, 2018

Recent complaints made by a consumer advocacy group revealed a lack of Bayh-Dole compliance by Cold Spring Harbor Laboratory surrounding a drug that costs a single patient hundreds of thousands of dollars annually, illustrating the risk of failing to properly report federally funded inventions as required by the Act.

Exorbitant pricing for some pharmaceuticals is creating more pressure for the government to protect its patent rights, says Tyson Benson, JD, a patent attorney with the law firm of Harness Dickey in Detroit, MI.

“There has been a consistent drumbeat in recent years concerning march-in rights, people urging the government to use that tool. There is a certain part of the public that wants to change patent laws and that pressure is growing,” Benson says. “The risk is higher than it has been in the past because with all the concern over healthcare and costs, people are urging the government to step in and make those drugs more affordable because they were developed with federal funding.”

The Cold Springs case involves the drug nusinersen, sold by Biogen under the tradename Spinraza, for treating spinal muscular atrophy. The drug was partly the result of research at the University of Massachusetts Medical School, funded in part by grants from the National Institutes of Health (NIH). Biogen received regulatory approval in December 2016 to sell Spinraza and set a price of $750,000 for the first year of treatment and $375,000 for each year thereafter.

That high price tag got the attention of consumer advocacy groups, who started looking at the lineage of the drug and noted that the NIH funding made the drug subject to compliance with the Bayh-Dole Act.

Under Bayh-Dole’s march-in rights, the funding agency can, on its own initiative or at the request of a third party, ignore the exclusivity of a patent and grant additional licenses to other “reasonable applicants.” That has never been done with a university patent in the 37 years of Bayh-Dole. But the march-in rights still loom over universities and their licensees.

In January 2017, consumer advocacy group Knowledge Ecology International (KEI) alleged that Cold Spring Harbor Laboratory and Ionis Pharmaceuticals, which developed nusinersen together, failed to properly file paperwork disclosing that the drug came about in part from research funded by the NIH. The group suggested government action might be necessary to prevent a monopoly and allow access to lower-cost versions of the drug.

After KEI requested an investigation of two patents that failed to disclose government funding, Cold Spring responded by filing an amendment to one of the patent applications and received a “certificate of correction” for patent 8,361,977, but not for the second patent in question. KEI’s research also indicates that going back as far as 1991, Cold Spring failed to disclose federal funding on 15 of 56 patents and has now received certificates of correction for 11 of them.

There has not yet been any response to or resolution of the KEI complaint on the second Cold Spring patent, but KEI Director James Love isn’t holding his breath for a dramatic resolution. “We think the NIH has been very lax in enforcing these provisions of Bayh-Dole,” Love says. “The rate of corrections we found was pretty high in Cold Spring Harbor relative to some other institutions we looked at, but the NIH reaction has been pretty blasé.”

The government’s failure to enforce Bayh-Dole makes it “almost a voluntary requirement,” Love says, while also noting that KEI will continue to press its case, which could still, in theory, result in a government march-in.

A detailed article on the Cold Spring case appears in the January issue of Technology Transfer Tactics. To subscribe and get the full article, along with complete access to the publication’s 10+ year archive of best practices and expert guidance for TTOs, CLICK HERE.

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