NIH Seeks Comments on Patient Access Plan Requirements in Patent License Agreements
In Short
The Situation: The National Institutes of Health ("NIH") proposed a new policy requiring entities that receive licenses from the NIH to certain taxpayer-funded inventions to submit Access Plans for ensuring broader patient access to the products embodying such inventions.
The Result: By July 22, 2024, the NIH is seeking written comments on the proposed policy, which it promotes as an important step in improving patient access to vital medical inventions, but also requires disclosure by licensees of commercially sensitive information and strategies.
Looking Ahead: The NIH's policy is not final and currently excludes jointly owned intellectual property ("IP") rights, but the request signals further actions undertaken to improve patient access to medical innovations, which may affect commercialization of certain taxpayer-funded inventions.
On May 22, 2024, the NIH announced that it is seeking public input on the development and implementation of a new policy to promote patient access to products stemming from NIH-owned inventions. This request for comments is part of ongoing efforts to improve patient access to vaccines, drugs, biologics, and medical devices to patients in the United States and abroad, who may otherwise lack access to such products due to a number of factors, including high costs.
The new policy would apply to commercial patent licenses relating to NIH-owned inventions made by investigators in the Intramural Research Program ("IRP"), the NIH's internal research program. Covered licenses include those that authorize the commercialization of drugs, biologics, vaccines, or devices developed by the NIH for preventing, diagnosing, or treating human diseases. The NIH notes that the policy would not apply to third-party IP but that the application of the policy to IP jointly owned by the NIH and a third party (or parties) will be considered at a later time.
The NIH proposes new language to be added to its IRP model license agreements that requires a licensee to provide an "Access Plan" to the NIH within three months of a Licensed Product entering a first pivotal clinical trial (i.e., a Phase III trial or equivalent), unless the licensee obtains in advance a written waiver or modification, requests for which the NIH must consider in good faith. 89 Fed. Reg. 45003, 45005 (May 22, 2024). The proposed provisions would also require a licensee to confer with the NIH regarding a licensee's progress toward patient access to the applicable product and to consider in good faith any NIH-suggested modifications to the Access Plan within 30 days of the NIH's request. Id. The request may occur only once annually.
The term "Access Plan" would be defined as a licensee's plan, including the plan(s) of any sublicensee(s), that describes the licensee's strategy for supporting broad access to a Licensed Product for the population of the United States and: (i) certain underserved communities such as those described in the proposal; and/or (ii) populations in countries defined by the World Bank classification system as lower- and middle-income countries. Id. Under the proposed provisions, the Access Plan must include at minimum "a brief description of the Licensed Product(s)," "the anticipated patient population(s)," "other products, tools, facilities, or unique resources necessary for use of the Licensed Product," and at least one strategy for mitigating access challenges, such as affordability, availability, acceptability, and sustainability. Id. The NIH intends to develop further guidance about acceptable plans, but a key requirement of the proposal would allow the NIH to request, publish, and publicly disclose to third parties nonconfidential versions of any Access Plans.
The announcement highlights potential strategies that licensees might consider including in their Access Plans, such as, for example, "committing to keep prices in the [United States] equal to those in other developed countries" and "not raising costs above inflation." Id. With respect to intellectual property, the NIH notes other strategies may include sublicensing to manufacturers in non-U.S. countries on voluntary and mutually agreeable terms, "committing to license all intellectual property and know-how needed to make a product if the licensee exits a market," or "agreeing to sublicense relevant intellectual property on a low- or no-royalty basis." Id.
The NIH is seeking input from the public regarding, among others: (i) activities and "strategies to mitigate access challenges and expand the reach, and benefit, of drugs, biologics, vaccines, and devices stemming from NIH[-owned] inventions"; (ii) "how access plans could incorporate transparent cost accounting measures"; and (iii) how to maintain the flexibility needed to enable licensees to develop and commercialize products while promoting certainty and transparency on access efforts and enforcement. Id. at 45004.
The deadline for submission of comments in writing to this proposed policy is July 22, 2024.
Three Key Takeaways
- The proposed policy may have a chilling effect on the licensing of NIH-owned inventions conceived by IRP investigators and may reduce the desirability of IRP collaboration.
- Public disclosure of Access Plans could potentially reveal a licensee's strategic or commercially sensitive information relating to the development and commercialization of medical products.
- By requiring the development of Access Plans aimed to reduce the price and increase the availability of medical products, the proposal may result in increased competition to drive prices down, but it is yet to be seen how burdensome these obligations might be on licensees, as well as any chilling effect this proposed policy may have on the pharmaceutical industry.
