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Preliminary Data from BU-Led Study Suggests Bayh-Dole Has Driven Growth in Drug Approvals

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Since 1980, more than 100 FDA-approved drugs, vaccines, and in vivo diagnostics exist because of research conducted at public institutions, according to preliminary results of a study measuring the contribution of public sector research to new drug discovery.
 
In addition, initial study results indicate that a marked increase in drug approvals in the late 1980s and early 1990s appears to correlate with the passage of the Bayh-Dole Act in 1980, and the majority of drugs spawned from public sector research are now marketed by large, established pharmaceutical companies.
 
The study, titled “The contribution of public sector research to the discovery of new drugs,” was spearheaded by researchers from Boston University’s Office of Technology Transfer and Institute for Technology Entrepreneurship and Commercialization.
 
Other institutions contributing to the study include the Norwegian Radium Hospital Research Foundation; Massachusetts Institute of Technology’s Sloan School of Management; the Robert Wood Johnson Foundation; and the National Institutes of Health.
 
According to Ashley Stevens, director of BU’s Office of Technology Development, the researchers decided to conduct the study in response to people “continuing to lambaste” the Bayh-Dole Act.
 
“It seemed to me that one of the greatest returns to come out of Bayh-Dole is in approved drugs,” Stevens told BTW last week. “I thought, ‘Let’s see if we can document this.’ I wasn’t aware of anybody having documented it before.
 
“When I asked around at public meetings, where people should know, no one seemed to have any idea,” he added. “So I thought let’s put it together and see what quantification we could come up with.”
 
Initial results of the study were first unveiled at March’s Association of University Technology Managers’ annual meeting in San Francisco. In addition, earlier this month, Mark Rohrbaugh, director of the NIH Office of Technology Transfer, presented preliminary data to attendees of the Licensing Executives Society’s New York chapter meeting.
 
Although data collection for the study has not yet been completed, the researchers have identified several trends that appear to underscore the importance of the Bayh-Dole act and technology transfer to the US economy, at least in the pharmaceutical sector.
 
Perhaps the most telling statistic is that between 1980 and today, 107 drugs, vaccines, and in vivo diagnostics that received FDA approval, and two that received foreign approval, were discovered in whole or in part in the course of research carried out at public sector institutions.
 
Of these, nine were approved between 1980 and 1990, after which the number of new approved drugs per year increased significantly — a trend that the researchers believe correlates with the passage of the Bayh-Dole Act in 1980.
 
“We certainly noticed that there was an upturn in the number of approved drugs approximately 10 years following Bayh-Dole, which is the type of lead time you might expect for things to get discovered, patented, licensed, and taken through FDA approval,” Ashley Stevens, director of BU’s Office of Technology Development, told BTW last week.
 
According to Stevens, other factors may also have contributed to this upturn in new drug approvals.
 
“I don’t think any single thing is attributable to only the Bayh-Dole Act,” Stevens said. “I do think it was part of what I characterize as a fortuitous series of public policy decisions that radically transformed the US economy over the course of the late 1970s and early 1980s to an innovation-driven economy.”
 
Examples of such decisions include the Employee Retirement Income and Security Act, introduced in 1974, which spurred modest levels of investment into high-risk vehicles such as venture capital funds; a series of cuts in the late 1970s and early 1980s in capital gains tax rates, which stimulated long-term investment in US business; the 1982 Supreme Court decision in Diamond v. Chakrabarty, which upheld the patentability of microorganisms; and the establishment in 1982 of the Court of Appeal of the Federal Circuit as a single, nationwide venue for appeals of intellectual property cases from Federal District Courts, which resulted in the majority of subsequent challenged patents being upheld.
 

“We certainly noticed that there was an upturn in the number of approved drugs approximately 10 years following Bayh-Dole, which is the type of lead time you might expect for things to get discovered, patented, licensed, and taken through FDA approval.”

Thus far, the study has also revealed that although 55 percent of initial licensees of university technologies were small biotechs or start-up companies, marketing rights are now overwhelmingly owned by large, established pharmaceutical companies.
 
The marketed pharmaceutical products counted in the study originated at 64 different public research institutions, with 18 of the products originating from research conducted by two or more institutions.
 
The NIH is the leader by far among public institutions in terms of most approved drugs discovered, with 21; other leaders include the University of California with nine, Memorial Sloan-Kettering Cancer Center and the University of Missouri with four each; and several institutions with three apiece.
 
Johnson & Johnson leads the way in terms of pharmaceutical companies currently marketing public-sector-discovered drugs with 10; followed by Merck with nine, GlaxoSmithKline with seven; and Pfizer with six.
 
Stevens told BTW that the group is aiming to complete data collection by the end of the summer, at which point it will seek to publish the study in a peer-reviewed journal. “I would hope that one of the more serious journals with an interest in public policy would be interested,” he said.
 
In addition, the researchers hope to use the data to quantify the economic impact of technology transfer in the pharmaceutical industry. Such an analysis will be difficult, Stevens said — mainly because the development of many drugs is far more complicated than the traditional two-step linear model of university research to biotech firm to pharmaceutical company.
 
“We’re trying to take into account things like what the sales are of these drugs,” Stevens said. “Also, we’ve observed that when small companies develop drugs like this, frequently they get acquired, maybe reacquired, parts get sold off — and you can identify some very significant economic impact right there.”
 

Added Stevens, “just the preliminary numbers are pretty damn impressive, and [that data was gathered] before MedImmune was sold for $13 million, and the main drug that it was acquired for came from the NIH.”

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