NIH’s Access Planning Policy for Patent Licenses: Part 2

On its face, the new NIH Access Planning Policy represents a significant step toward ensuring broad access to patented biomedical products. Yet the manner in which the Policy is implemented remains to be seen, and several issues discussed below could limit its effectiveness.

Requirements versus Plans

The NIH Access Planning Policy requires that applicants for NIH patent licenses create and abide by a plan for achieving broader access to resulting products. The Policy does not require specific actions relating to pricing or the like, but only that applicants submit plans that may include such actions. As such, applicants have significant flexibility regarding their approaches to broadening access. This degree of flexibility is intentional, as NIH expressly anticipates that “the best public health outcomes will emerge when it can approach access planning with flexibility and in collaboration with partners and licensees.” 

This approach, in which NIH requires researchers to submit plans of their own creation, rather than requiring that they take specific actions or adhere to specified minimum standards, reflects a trend that is also seen in recent NIH data access and sharing policies such as the 2017 Cancer Moonshot Public Access and Data Sharing (PADS) Policy and the 2023 Policy for Data Management and Sharing (DMS). All of these policies give the beneficiaries of NIH funding and technology the latitude to develop plans intended to achieve stated NIH goals without imposing specific requirements.

While the flexibility inherent in a plan-based policy can be useful to accommodate different categories of parties, products and markets in which a one-size-fits-all approach may be impractical, it also gives significant discretionary authority to the agency officials who administer it. Thus, it is not clear how muchaccess will be required in order for an Access Plan to be approved. The approval of individual Access Plans will likely be delegated to individual NIH licensing officers who have no objective criteria by which to evaluate them, nor any real incentive to insist on more stringent terms in the face of pushback from commercial licensees. As we saw during the first year of the Cancer Moonshot PADS Policy, few of the data sharing plans submitted by grantees complied with the requirements of the Policy, yet were nevertheless approved and funded by NCI (Frisby & Contreras, 2020). 

And unlike funded grants, NIH’s patent licensing agreements are not (with minor exceptions) made available to the public, so it will not even be possible for potential licensees or the public to gain an understanding of the types of access commitments that are required under the Policy. Each case will be entirely discretionary to NIH’s licensing staff, which gives rise to allegations of inconsistency and favoritism when the Policy is applied to individual Access Plans.

Translation to Contractual Terms

The Access Planning Policy provides that the terms of an approved Access Plan will be incorporated into the terms of the licensing agreement that is eventually signed by NIH and the licensee. Yet much can change between a plan drafted by scientists and an agreement negotiated by lawyers. It is quite possible that contractual language could be crafted by skilled lawyers to incorporate numerous exceptions, exclusions and caveats that effectively reduce (or eliminate) the access commitments made in the Plan. This possibility is accentuated by the numerous provisions of the Policy that are qualified by terms such as “commercially feasible” and “commercially reasonable” and the possibility of waivers of Policy requirements under conditions that do not seem particularly rare.

This risk of contractual dilution of commitments is not theoretical, as evidenced by the “most-favored nation” clause included in the agreement between the US Biomedical Advanced Research and Development Authority (BARDA) and Regeneron Pharmaceuticals for the development of a new COVID-19 monoclonal antibody. The clause was touted by numerous government officials including Senator Bernie Sanders as a “groundbreaking” means for controlling U.S. drug prices. Yet, as a careful analysis of the contractual language revealed (Fernandez Lynch et al., 2024), the clause contained so many loopholes and exclusions as to make it effectively toothless. 

Discretionary Enforcement

Like the specific terms that will be approved in an Access Plan, enforcement of the access terms of a license agreement are entirely in the discretion of NIH. Given that NIH has historically been hesitant to enforce the terms of its data access and sharing policies against extramural researchers (Contreras (2017, 31-32)), it is unclear how vigorously the agency will enforce the access terms of its licensing agreements after a product is released. Moreover, because NIH’s enforcement measures taken in response to breaches of the Policy will probably never be disclosed to the public short of litigation, the public will have little visibility into the degree to which NIH takes seriously its licensees’ compliance with the terms of their access commitments.

Market Impact

When considering the impact of the Access Planning Policy, it is important to remember that the Policy applies only to licenses of patents held by NIH; it does not apply to patents covering extramural grant-funded work at universities and other research institutions. As noted above, in 2024 NIH entered into 38 commercial licensing agreements for patents arising from its intramural research program. In contrast, the Association for University Technology Managers (AUTM) reports that in 2024, U.S. research universities entered into more than 9,500 licenses and option agreements, a large number of which cover extramural research funded by NIH. As such, the actual market impact of the Access Planning Policy on biomedical products may be modest. 

This being said, the existence of the policy could influence the debate over pricing considerations under the Bayh-Dole Act and the much larger market for products patented by NIH’s extramural researchers. Perhaps the greatest impact of the Access Planning Policy will be its effect on this larger debate and the degree to which pricing considerations will become part of the march-in analysis under the Bayh-Dole Act.

Conclusions

The NIH Access Planning Policy has prompted strong responses from commentators, both positive and negative (see here and here). Yet it is too early to tell what effect, if any, the Policy will have on the affordability of biomedical products either in the U.S. or abroad. Uncertainty abounds regarding the types of access commitments that NIH will require in licensee Access Plans, how those commitments will be incorporated into patent licensing agreements, and how diligently those commitments will be policed and enforced by NIH. One thing is certain: interested observers will be paying close attention.

This is a two-part post. Click here to read Part 1.