Va.’s local innovation ecosystem jeopardized by federal efforts to weaken IP rights

In attempts to lower costs of prescriptions, federal lawmakers continue pushing for policies that would weaken intellectual property (IP) protections and deplete much-needed future investments in innovation, writes guest columnist John Newby

November 17, 2023 12:31 am

(Kena Betancur / Getty Images)

Biomedical innovation has brought hope to patient communities across the country and transformed Virginia’s local life sciences industry. Yet, in attempts to lower costs of prescription drugs, federal lawmakers continue to push for policies that would weaken intellectual property (IP) protections and deplete much-needed future investments in innovation.

Virginia is a national leader in medical innovation, spearheading the development of new treatments that address hard-to-treat illnesses and severe public health threats. This progress is due, in part, to long-standing federal commitments to incentivize public and private partnerships and prioritize bringing to market innovative medications that can transform patients’ lives.  

Virginia is home to 1,451 life sciences companies, which employ 26,545 residents working constantly to develop new, innovative medical treatments. Over 3,400 clinical trials are happening here in the commonwealth currently; over 1,500 of these trials target the country’s most debilitating chronic diseases including asthma, diabetes and heart disease. Virginia’s life sciences sector continues to grow, with 62 life sciences industry projects announced in the past five years, representing over $2.5 billion in local investment.

Developing a new medicine is a significant financial undertaking. Many companies and organizations rely on IP rights, including patents and copyrights, which help incentivize medical innovation by granting exclusive rights to new medicines for a set period of time. This allows companies to recoup the enormous investments required to develop a new medicine and enables future drug development. IP protections and exclusivity rights are the reason the latest advancements in treatments for Alzheimer’s disease, cancer, HIV and more can make it from the laboratory to a patient’s medicine cabinet.

Our current IP system is the foundation for new treatments and cures, thanks to a law called the Bayh-Dole Act, which enables American universities, businesses, and nonprofit research institutions to own, patent, and commercialize innovations developed by federally-funded research programs. Prior to the passage of Bayh-Dole, European companies introduced more than twice as many new drugs than companies in the U.S. and the U.S. invented fewer than 10% of new active substances. 

Today, our nation leads the world in biopharmaceutical innovation. The Food and Drug Administration (FDA) approved 38 new drugs per year from 2010 through 2019, 60% more than the yearly average over the previous decade. As a result of Bayh-Dole, 300 new therapies and vaccines have been introduced to the market.

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However, the federal government retains the right to remove IP protections from certain medical products in four specific circumstances, which all center around if the original license holder is not making effective and good-faith efforts to develop the new research into a product that can be utilized by the public. The government has never exercised its “march-in rights” and the National Institutes of Health (NIH) has denied every march-in request because the correct circumstances have never been met. Despite this, a few misguided policymakers and advocates are continuing to press the federal government to employ march-in rights and remove IP protections from drugs created as a result of Bayh-Dole in a misplaced effort to lower drug prices.

Efforts to erode critical IP protections are not limited to march-in rights. A drug pricing provision in the Inflation Reduction Act (IRA) weakens IP rights by arbitrarily setting varying exclusivity periods for different types of medications. The IRA decreases the exclusivity period of a certain class of drugs – which includes medicines like aspirin, penicillin and many treatments for chronic and rare illnesses – from 14 or more years to just nine. This policy reduces companies’ abilities to recoup significant investments that go towards drug discovery, disincentivizing the development of new treatments for cancer, rare diseases, and countless other conditions. 

Moreover, last year the World Trade Organization (WTO) agreed to waive certain IP protections on COVID-19 vaccines and are considering expanding such waivers to COVID treatments. Innovative companies here in the U.S. led the development of COVID-19 vaccines and treatments, but failing to honor the very IP protections that enabled companies to bring these products to market quickly and efficiently would result in fewer investments in new research and development, leaving Virginians at risk for future public health threats.

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Our strong IP protections are what make the U.S. a leader in biopharmaceutical innovation, but these converging threats to weaken the very framework that enabled the latest treatments could bring critical innovation to a screeching halt. In 2021 alone, leading pharmaceutical companies invested $102.3 billion collectively in new drug research and development. Proposals to weaken IP rights and reduce exclusivity periods would disincentivize many companies, universities, and institutions from making investments in new medicines. Virginia’s life sciences industry would feel an immediate impact through fewer job opportunities, less investment in research and development and insufficient treatment options for patients.

As a patent attorney, I’ve spent my career protecting innovation; I understand the necessary value of strong IP protections in order to recoup a significant investment, particularly for innovative industries such as ours. Weakening IP protections as an attempt to lower drug prices is a misguided, short-term fix with long-term implications. IP rights enable us to find tomorrow’s solutions to today’s challenges, but to do so, we need our lawmakers to stand up and reject policies that would weaken IP rights and harm critical research and development happening here in Virginia.

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John Newby
John Newby

John Newby is chief executive officer of the Virginia Biotechnology Association (VA Bio) and an intellectual property litigator and patent attorney.