Biden targets drug patents
President’s latest effort to lower prices
The White House on Thursday announced its latest gambit to lower US drug prices: a plan to step in and license patent rights to other manufacturers when certain drugs’ prices are too high.
Under the proposed framework, which relies on the White House’s new legal interpretation of a 43-year-old federal law, the high price of a taxpayerfunded drug will be a factor in determining when to invoke a regulatory power known as “march-in rights,” senior officials said.
“The agency that funded the research can then license the invention to a competitor that is able and willing to make it available on reasonable terms,” Neera Tanden, director of the White House Domestic Policy Council, told reporters Wednesday. “Fundamentally, we are establishing that price can now be a factor in determining . . . when the federal government can march-in to ensure that we have lower prices.”
President Biden also released a short video where he said the administration was working “toward ending pricegouging, so you don’t have to pay more for medicines than you need.”
The authority to license a drug’s patent rights to another manufacturer has never been invoked for drugs, and White House officials said they had not yet targeted any high-price pharmaceuticals. Officials characterized the move as part of Biden’s ongoing efforts to lower the price of drugs, which includes provisions in the 2022 Inflation Reduction Act that allow the federal government to directly negotiate the prices of popular drugs used by patients covered through the federal government’s Medicare program for older Americans.
Thursday’s announcement comes after the Biden administration conducted a nearly year-long review of its legal authorities under the 1980 Bayh-Dole Act, which laid out rules on who owns the intellectual property from federally funded research. Advocates and some lawmakers, including Senators Bernie Sanders,
Independent of Vermont, and Elizabeth Warren, Democrat of Massachusetts, have argued that the law’s provisions permit federal agencies to use march-in authority on numerous high-priced drugs the agencies helped develop.
The National Institutes of Health this year rejected an appeal to use march-in rights on a highpriced prostate cancer drug, Xtandi, which costs more than $160,000 for one year of treatment in the United States but is sold for a fraction of that price in other countries. The NIH’s decision on Xtandi sparked a fight with Sanders, the chair of the Senate’s health committee, who delayed the confirmation hearing for a new NIH director this year until the White House privately pledged to him that it would pursue new drug-pricing measures.
The administration will seek comments on its proposed framework for when to invoke march-in rights. The framework was issued by the Department of Commerce and published in the Federal Register on Thursday morning. Advocates said they were waiting on the final framework, which is expected to be completed next year, to determine how effective the policy would be.
Invoking march-in rights could be “a check on profiteering,” depending on how aggressively the Biden administration chooses to use the authority, said Peter Maybarduk, who directs the access-to-medicines group at the consumer advocacy organization Public Citizen and supports using march-in rights. “Drugmakers should be on notice that unreasonable pricing could cost them their monopoly.”
Biden has increasingly campaigned on his efforts to tackle high drug prices, with the White House citing polls that most American adults support the president’s policies. About 8 in 10 Democrats and nearly 7 in 10 Republicans have said there has not been enough government action to lower the price of drugs, according to polling conducted in July by KFF, a nonpartisan health policy group.
Experts on Wednesday said they expected the Biden administration’s new interpretation of the Bayh-Dole Act would face legal challenges from drugmakers, who have fiercely opposed efforts to invoke march-in rights for highpriced drugs. The pharmaceutical industry is already battling the Biden administration’s plan to negotiate the prices of prescription drugs in the Medicare program.
“This would be yet another loss for American patients who rely on public-private sector collaboration to advance new treatments and cures,” Megan Van Etten, spokeswoman for PhRMA, the drug industry’s flagship trade association, said in a statement. “The Administration is sending us back to a time when government research sat on a shelf, not benefiting anyone.”
Some former government officials and experts have also warned against invoking march-in rights for pharmaceuticals, saying that weakening the power of patents would undermine private-sector incentives for innovation.
Invoking march-in rights to lower the price of a drug such as Xtandi is “a disastrous idea that could effectively destroy the legal foundation for the public-private research partnerships that bring new products to American consumers,” Walter Copan, who served as director of the National Institute of Standards and Technology during the Trump administration, wrote in a Denver Post oped last year.