NIH Agrees to Strengthen Licensing Process and Increase Transparency on Drug and Vaccine Patents Following GAO Review

The U.S. Government Accountability Office (GAO) released a new report reviewing the Department of Health and Human Services’ (HHS) management of their intellectual property. The report recommends HHS fix a deficiency in their commercial licensing process and publicly report more about the licensing of their intellectual property. U.S. Senator Debbie Stabenow (MI) and Chairwoman of the House Committee on Oversight and Reform Carolyn B. Maloney (NY-12) requested this report in order to learn more about how taxpayer-funded research is being used to develop drugs and vaccines.

In response to the Members’ request, GAO reviewed HHS’s process for licensing its intellectual property and identified deficiencies that HHS has agreed to correct. HHS has also agreed to GAO’s recommendation that HHS begin to publicly report information on the intellectual property it licenses and the outcomes and impacts of those agreements.

 “We know that taxpayer-funded research contributes to almost all newly approved drugs. But this report reveals several cases where the government directly holds patents on the drug or manufacturing process. These drugs exist because of taxpayer dollars from American families, yet Americans are forced to pay the highest drug prices in the world. Because of our investigation, NIH has agreed to increase transparency in their patent-licensing process in order for the public and lawmakers to better understand how drugs are priced. While there is more work to be done, Chairwoman Maloney and I will press NIH to make sure they follow through on the transparency and contracting requirements in order to make sure these important drugs are available for those who need them,” said Senator Stabenow.

 “We all rely on innovative drugs and therapies, but taxpayers are not getting a fair return on their investment. This report shows there is a lot the government can do to protect and strengthen the publicly owned intellectual property that goes into drug development.  I am pleased HHS has agreed to take some basic steps to improve this process, but we must do more to ensure taxpayer-funded inventions are being developed in the public’s best interest,” said Chairwoman Maloney.

 Following reports alleging that Gilead Sciences was infringing on government-owned intellectual property relevant to HIV prevention drug Truvada, last June, Senator Stabenow and former House Committee on Oversight and Reform Chair Elijah Cummings requested that GAO conduct a review of how HHS manages its intellectual property. This report is the product of that request.