In a groundbreaking move, the Biden Administration announced on Thursday its intention to implement a new policy that empowers the government to seize patents for medicines developed with federal funding if it deems their prices excessive. This unprecedented measure, known as “march-in rights,” allows the government to issue additional licenses to third parties for products developed with public funds if the original patent holder fails to make them available at reasonable prices.
Key Elements of the Draft Roadmap
According to a draft roadmap obtained by Reuters, the government’s decision-making process will consider various factors. These include assessing whether a limited subset of patients can afford the drug and determining if drugmakers exploit health or safety concerns by inflating prices.
White House adviser Lael Brainard emphasized the administration’s commitment to ensuring affordable access to taxpayer-funded drugs. “We’ll make it clear that when drug companies don’t sell taxpayer-funded drugs at reasonable prices, we will be prepared to allow other companies to provide those drugs for less,” Brainard stated during a press call.
Public Input and Finalization
Before finalizing the proposal, the government plans to invite public commentary for 60 days. This inclusive approach seeks to gather diverse perspectives and opinions on the potential impact of such a policy shift.
Historical Context and Industry Responses
Historically, the U.S. government has resisted calls to seize patents on expensive drugs. In March, it declined to compel Pfizer and Astellas Pharma to reduce the price of their prostate cancer drug Xtandi. Critics argue that such measures could discourage industry investment, while proponents believe they are necessary to prevent unjustifiable pricing practices.
Vanderbilt University professor Stacie Dusetzina acknowledged the potential chilling effect on industry investment but noted the importance of a credible threat if the industry proves uncooperative.
Megan Van Etten, spokesperson for the pharmaceutical industry lobby group PhRMA, expressed concerns that allowing the government to use march-in rights based on price could hinder innovation and harm patients.
March-In Rights Under Bayh-Dole Act
March-in rights were introduced as a safeguard in the Bayh-Dole Act of 1980, enabling inventors to retain ownership of products developed with public funds. While the National Institutes of Health (NIH) can seize patents of federally-funded medicines under Bayh-Dole, the agency’s former director, Francis Collins, clarified that it did not have the authority to use march-in rights to lower drug prices.
In her recent briefing, NIH Director Monica Bertagnolli affirmed her commitment to using every available tool to ensure patient access, including the judicious application of march-in rights.
Political Landscape and Progressive Lawmakers’ Calls
Progressive lawmakers within the Democratic Party have criticized drugmakers developing therapies with government funding, urging the Biden administration to leverage its march-in authority to address the issue of soaring drug prices. The March testimony of Moderna CEO Stephane Bancel in Congress regarding plans to increase the cost of its COVID-19 vaccine drew significant attention and scrutiny. This vaccine, known as Spikevax, was developed with government funding.
Joseph Allen, director of lobbying group The Bayh-Dole Coalition, noted that Congress could challenge the new policy if found incompatible with existing laws.