Drug prices in the United States and pharmaceutical profits are considered excessive by many, including officials of the Trump Administration. The fact that the firms charge significantly less for the same medications in other countries than here has many wondering why and what can be done about it. One proposed solution has been to use the federal “march-in” rights allowed by the 45-year-old Bayh-Dole Act to force a change. The proposal has sent both excitement and chills throughout the communities involved in healthcare price containment and intellectual property rights of federally supported R&D. To help everyone have a common grounding on the issue, the General Accountability Office (GAO) released a new report regarding the draft guidance under consideration.
For background, the Bayh-Dole Act gives universities, small businesses, and other recipients of federal research funding the ability to retain patent rights to inventions developed with federal funding. It also gives federal agencies limited authority to “march in” and require additional licensing of those patents when certain conditions are met. Although this authority has existed since 1980, GAO points out that no federal agency has ever exercised it for price issues. Is that hands-off approach about to change?
Intellectual Property: Information on Draft Guidance to Assert Government Rights Based on Price, reviews draft guidance issued in 2023 by the National Institute of Standards and Technology (NIST) on the federal government’s “march-in rights” under the Bayh-Dole Act of 1980, as amended.
GAO’s review focuses on NIST’s proposal to clarify how agencies might evaluate march-in petitions. The draft guidance suggested that, in certain cases, an agency could consider a product’s price and sales terms when assessing two statutory conditions: whether an invention has been made available on “reasonable terms” and whether march-in may be needed to address unmet health or safety needs. The draft guidance did not propose changes to the statute itself but rather clarified how agencies might interpret existing law.
To inform its analysis, GAO looked at more than 51,000 public comments submitted in response to the draft. It also reviewed patent and product data to gauge how many federally funded inventions could plausibly be affected by a price-based, march-in approach. In addition, the report walks through the relevant statutory framework and describes NIST’s interagency development process.
GAO found a significant divide in the feedback it reviewed. Approximately 91 percent of public comments supported the draft guidance, often citing concerns about prescription drug pricing and public access to taxpayer-funded inventions. Universities and many industry groups, however, raised concerns that incorporating price into march-in decisions could inject uncertainty into the technology transfer ecosystem created under Bayh-Dole. They argued that predictable patent rights remain central to investment and commercialization decisions, particularly for early-stage technologies, and that greater uncertainty could have a chilling effect on the lab-to-market pipeline. Importantly, GAO notes that even if price were considered in march-in determinations, the practical impact may be limited. Only inventions subject to Bayh-Dole would qualify, and many commercial products incorporate patents not directly tied to federally funded research. In fact, a study published in JAMA in 2024, suggests a very low percentage—as low as 1-2%—may actually be subject to march-in rights. This means even a successful march in might not clear the legal path for a generic competitor.
Ultimately, the report doesn't call for a policy pivot. Instead, it lays out the legal and practical constraints that will continue to shape the debate over federal research, pricing, and public accountability. Left to debate as well is what to do about the wide variations in pricing among nations for the same drugs and the significant profit margins pharmaceutical companies have made by setting their own prices here in the U.S.
This page was prepared by SSTI using Federal funds under award ED22HDQ3070129 from the Economic Development Administration, U.S. Department of Commerce. The statements, findings, conclusions, and recommendations are those of the author(s) and do not necessarily reflect the views of the Economic Development Administration or the U.S. Department of Commerce.