David Dayen reports in the American Prospect on new developments at the White House regarding legislation that would lower prescription drug prices. President Joe Biden’s executive order on economic competition takes (baby) steps towards the federal government removing patents on excessively priced brand-name drugs so that other companies could manufacture them at lower cost. This threat to pharmaceutical company patents, in turn, could move Congress to take bold action on drug prices.
The potential for executive action on drug prices derives from legislation that gives the government “march-in rights,” to seize drug patents when drugs are developed with government funding and the drugs are not publicly available on “reasonable terms.” There has been a long debate over the meaning of “reasonable terms,” with the sponsors of the Bayh-Dole Act of 1980 and others claiming that it somehow excludes excessive pricing. But, Kamala Harris in her campaign platform supported its use for this purpose.
Before Trump left office, his administration tried to kill any further discussion on the use of march-in rights to address high-priced drugs through NIST, the National Institute of Standards and Technology. Now, President Biden is asking NIST not to finalize Trump’s proposed new rule.
Right now, there is a request pending for the government to march-in and break the patent on the prostate cancer drug, Xtandi. Its price in the US is $150,000 for a year’s treatment and, with insurance, copays can easily be $10,000. Other wealthy countries sell it for as low as $30,000.
To date, the Department of Defense has not acted on the march-in request for Xtandi. President Biden’s intervention on the NIST rule might change that. Let us see.
In addition to requesting that NIST not finalize the Trump rule on march-in rights, President Biden’s executive order seeks:
- The FTC to end pay-for-delay, which permits pharmaceutical companies holding patents on brand-name drugs to pay generic manufacturers to delay bringing competitor generic drugs to market.
- Opens the door to drug imports from Canada. This sounds good, but, people can import drugs from Canada today without worry about FDA action. Americans should be able to import drugs from any country, not just Canada.
- Directs Secretary Xavier Becerra at the Department of Health and Human Services to recommend how the US should proceed on drug prices. Becerra could support march-in rights as well as compulsory licensing. He could also propose that drugs for people with Medicare cost no more than they do in any other wealthy nation.
One thing’s clear: If Democrats want to keep control of the House in 2022, it would help a lot if they passed legislation to lower drug prices. The overwhelming majority of Americans support this report. If drug prices remain high, the odds of their winning will likely come way down.
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