JustCare

Tag: Bayh-Dole

  • Will the administration step in to curb prices on drugs developed with taxpayer dollars?

    Will the administration step in to curb prices on drugs developed with taxpayer dollars?

    For more than 30 years, the federal government has failed to rely on the Bayh-Dole Act to reduce the cost of prescription drugs developed with taxpayer dollars. US Senator Elizabeth Warren, along with many advocates, is urging the Department of Commerce to finalize a policy that would specify the federal government’s right to seize prescription drug patents funded by the government on drugs with prices deemed to be “too high.” Partrick Wingrove reports for Reuters on where things stand.

    In early December 2023, the Biden administration said it would issue a policy for taking patents from drug manufacturers when their drug prices were excessive. The policy would give the federal government “march-in rights.” Essentially, the government could give other manufacturers the license to manufacture drugs developed with federal dollars, which are priced too high.

    Not surprisingly, the US Chamber of Commerce is trying hard to keep the policy from people implemented. Rather than accepting that the policy would promote innovation and drive competition, it makes the tired argument that the policy will keep pharmaceutical companies from developing new drugs. As a rule, the pharmaceutical companies use their power to make new versions of the same blockbuster drugs rather than to develop new drugs to meet unique and important health care needs. Exceptions are few and far between.

    To determine whether a drug’s price is excessive, the government will look at who can afford it and whether the high price of the drug exploits a health or safety issue.

    Under the new policy, the government would consider a list of factors, including whether only a narrow set of patients can afford the drug, and whether drugmakers are exploiting a health or safety issue by hiking prices.

    Here’s more from Just Care:

  • Biden administration should do more to lower drug costs

    Biden administration should do more to lower drug costs

    In an opinon piece for Scientific American, James Love, Director of Knowledge Ecology International, explains how the Biden administration could do more to lower the cost of prescription drugs in the US. You might not know this but the federal government has the authority to drive competition in the brand-name prescription drug market for brand-name drugs developed with taxpayer support. Many brand-name drugs are developed with your tax dollars.

    Federal agencies can grant licenses to pharmaceutical companies to manufacture drugs that compete with patented drugs with high prices, if the patented drugs were developed with taxpayer dollars. Of course, these are licenses that the pharmaceutical companies that developed the patented drugs do not expect or want to be issued. And, historically, the government has not issued them.

    The federal government has what are called “march-in” rights. It can issue licenses to develop drugs whenever it believes it is necessary to fix a pharmaceutical company’s “abuse or nonuse” of a patented drug. New draft federal guidance clarifies that an excessively high drug price can be considered abusive.

    These “march-in” rights were first established in the Bayh-Dole Act of 1980. Their goal is to ensure that the public benefits from drugs that that are patented, if public dollars contributed to their development. But, over four decades, the federal government has never exercised “march-in” rights, even when pharmaceutical companies set unconscionable prices for their drugs.

    The Biden administration’s new take on the law is significant but still limits the government’s use of its march-in rights and still allows the pharmaceutical companies to set excessively high prices for drugs that were developed with taxpayer dollars. The administration does not suggest that pharmaceutical companies have an obligation to set their drug prices no higher than levels citizens of other wealthy countries pay for the same drugs when US taxpayer dollars funded their development. Right now, we often pay five to ten times more than people in other wealthy countries for the same drugs, developed with our tax money.

    There are not that many new drugs developed with federal funding. And, some of those drugs include patents that were not developed with federal funding. In the administration’s draft, timing, including a patent’s life, could mean that march-in is not a good tack for the federal government to take.

    Moreover, pharmaceutical companies can appeal the federal government’s exercise of march-in rights, which would freeze government action. Essentially, pharmaceutical companies can slow down the march-in process for years, until their drugs lose their patents. And, for obscure reasons, sometimes pharmaceutical companies do not disclose government funding, as in the case of Gleevec, a cancer drug that has generated billions in revenue for Novartis.

    But march-in rights are not the federal government’s only tool for lowering drug prices. Our government has “worldwide royalty-free licenses for a taxpayer-funded invention, and a separate statute allows government use of any patent with compensation—zero for government-funded inventions—set by a judge.” There’s no reason our government should not be using all these rights to ensure Americans can afford the medications they need, especially for Americans in federal programs like Medicare and Medicaid.

    [Editor’s note: I continue to believe that the simplest and swiftest way to pressure the pharmaceutical companies to lower drug prices in the US is to open our borders to prescription drugs from verified pharmacies abroad and require insurers to cover them just as they cover drugs from pharmacies in the US. The Biden administration is now allowing some states to import drugs from Canada, which is another small step in the right direction.]

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  • Biden administration will decide any day whether to reduce the price of Xtandi

    Biden administration will decide any day whether to reduce the price of Xtandi

    David Dayen writes for The American Prospect on the question of whether the Biden administration will to do what it can to reduce prescription drug prices. It has the power to reduce the price of Xtandi–a prostate cancer drug–from a list price of $188,900 a year to less than $38,000 a year if it wants, which would be inline with what other countries pay. The world is flat; it’s time for the Biden administration to do right by Americans.

    Today patients with prescription drug coverage often spend $10,000 or more a year out-of-pocket for Xtandi to treat their prostate cancer. Or, they are forced to forgo taking the drug. Many prostate cancer patients with prescription drug coverage cannot afford the copay, so cannot benefit from the drug.

    We should know very shortly whether the Biden administration will use march-in rights under Bayh-Dole to bring down the cost of Xtandi on the ground that the price of the drug is unreasonable. Xtandi is available in other countries for 20-33 percent of what we pay for the drug in the US. The NIH is scheduled to make a determination any day.

    To date, no administration has ever used its march-in rights to break a drug patent. If the Biden administration exercises march-in rights, two companies are prepared to distribute a generic version of Xtandi. The Canadian company says it would charge $3 for a pill about one-fiftieth of its typical price.

    In 2016, the NIH declined a request to use march-in rights on Xtandi. Its manufacturer responded by raising the price even higher. To date the drug has generated $20 billion in revenue.

    It’s not clear why NIH will take a different position this time round. Xtandi was developed with government funding and some senior staff at NIH profit from the drug every year. They receive royalties of as much as $!50,000. A decision to allow march-in rights could reduce their income.

    Although Bayh and Dole have said that their legislation was not intended to address unreasonably high drug prices. But, they did so when they were paid to work for the pharmaceutical industry.

    Why shouldn’t Americans pay the average of what other wealthy countries pay for their drugs? In fact, Pfizer agreed to charge the government no more than the lowest price it charges g7 countries for its Covid treatment, Paxlovid.

    Should the NIH grant march-in rights for Xtandi, Astellas, the drug manufacturer, could appeal. But, the government would automatically have royalty-free rights for people with Medicare, Medicaid and the VA. Older adults, people with disabilities, people with low incomes and veterans would benefit right away.

    Here’s more from Just Care:

  • Biden administration should lower price of prostate cancer drug, Xtandi

    Biden administration should lower price of prostate cancer drug, Xtandi

    In an opinion piece for StatNews, Peter Arno et al. explains how the Biden Administration could save the lives of thousands of people with prostate cancer. Specifically, they show how the administration could reduce the cost of the enormously high-priced drug Astella drug, Xtandi, by 66-80 percent using march-in rights. Naturally, at one-third to one-fifth its current cost of $156,000, many more Americans would be able to take advantage of the treatment than can do so today.

    Reducing the cost of Astella’s drug by two-thirds, let alone four-fifths, would mean that cost would not be a barrier to treatment for many more people with prostate cancer. And, the price reduction would be in keeping with what people in other wealthy countries pay for the drug. Why should Americans pay so much more for this drug or any drug for that matter?

    Americans already have paid for the research and development of Xtandi. It was discovered at UCLA with funding from the National Institutes of Health and the US Army. To use march-in rights, all Secretary of HHS, Xavier Becerra, would have to do is find that it is unreasonable to ask Americans to pay three to five times more than people in other wealthy countries for a drug that was developed with US taxpayer funding.

    Authority to reduce drug prices through march-in rights is well-established. There is no need for additional legislation. But Pharma has done a great job of keeping executive agencies from using this authority.

    To date, the NIH has rejected a petition for it to use march-in rights to reduce the price of Xtandi. The NIH position in 2016 was that it was not unreasonable for Xtandi to cost $156,000 in the US.  In fact, “any price” would be fine.

    A new petition was filed in 2019. Two years later, HHS sent the new request  to the NIH to consider. The Bayh-Dole Act of 1980 gives the federal government the right to address unreasonably high drug prices. It can allow third parties to manufacture a generic version of these drugs at lower cost.

    Medicare is covering Xtandi now at an unreasonably high price, spending more than $1 billion on it each year, at taxpayer expense. But, the price it is paying is obscene, driving up Medicare premiums and wasting taxpayer dollars. And, high copays and coinsurance for the drug still keep tens of thousands of people from taking advantage of it.

    What’s remarkable is that at the same time that the Biden administration says it supports legislation to lower drug prices that Congress can’t manage to pass, it refuses to take advantage of a generic version of Xtandi that Canada is willing to provide the US at 97 percent lower cost than what Medicare currently pays. The administration also claims it supports march-in rights. Actions speak louder than words.

    Here’s more from Just Care:

  • Biden steps in on drug prices

    Biden steps in on drug prices

    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:

    1. 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.
    2. 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.
    3. 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.

    Here’s more from Just Care:

  • Drug prices: It’s time for the federal government to step in

    Drug prices: It’s time for the federal government to step in

    Fran Quigley writes for Common Dreams about the need to end pharmaceutical company monopolies if drug prices are going to come down. The federal government right now could exercise its “march in” rights and do just that if it chose to. But, it is so beholden to the pharmaceutical industry, it is not clear when it will.

    We do not have a free market for prescription drugs. Pharmaceutical companies have monopoly pricing power for brand-name drugs only because Congress has given them patent protections. Without those protections, drug prices would come down substantially.

    It costs drug companies pennies to manufacture a drug. But, because of their patent protections, pharmaceutical companies can charge prices that are literally thousands of times more than it costs to manufacture and distribute the drugs. And, insurers pay them; they profit from these high prices.

    Today, we are paying for the discovery of many drug innovations, from which pharmaceutical companies profit handsomely, with our tax dollars. The National Institutes of Health funds most drug research. In fact, it has funded research for every new drug developed in the last ten years.

    The consequence of pharmaceutical patent protections: A large proportion of Americans cannot afford the medicines they need.

    The House of Representatives passed HR3, which would allow the government to negotiate the price of hundreds of drugs over the next 10 years. And, it would limit the price of these drugs to around what other wealthy countries pay for them. But, the Republican-controlled Senate has let this legislation sit on the cutting room floor.

    Until HR3 or other legislation is enacted to lower drug prices, the Department of Health and Human Services should exercise its power to make drugs affordable for everyone. It has the power to issue licenses to other drug companies to manufacture and distribute drugs that are priced too high–“compulsory licensing” power. The government also has the power to directly manufacture these drugs. Either way, the patent holder is paid a fee. However, the government has not used this authority.

    The government’s power stems from the Bayh-Dole Act of 1980. It gives the federal government “march in” rights to issue a compulsory license for any drugs discovered with federal funding. The only condition is that the drug must be deemed not to be available on “reasonable terms.”

    We should also nationalize the vaccine industry and give government the ability to innovate and produce critical medicines. By so doing, we would not have to rely on the pharmaceutical industry for critical drugs.

    There is no reason we need to be beholden to Big Pharma. The US has used compulsory licensing as a threat many times before. In dozens of instances, prices have come down. But, President Trump’s administration won’t use it or even threaten to. Instead, they force millions of Americans to go without needed medicines they cannot afford.

    Here’s more from Just Care:

  • Democrats in Congress looking to end drug company patent abuses

    Democrats in Congress looking to end drug company patent abuses

    One big way to bring down the cost of prescription drugs is through changing the way the patent system works for pharmaceutical companies. Drug patents effectively confer monopoly pricing power on pharmaceutical companies. Stat News reports that a group of Democrats in Congress are looking to end drug company patent abuses.

    Historically, pharmaceutical companies have been able to find ways to extend their patent protections. They have led lawmakers to mistakenly believe that they need the patent protections–they need to be able to set drug prices sky high–in order to invest in innovations. But, the data show otherwise.

    This is really the first time that policymakers have taken on the drug companies’ power to set drug prices. Of note, compulsory licensing is accepted by Republican and Democratic lawmakers in the states. The National Governors Association endorsed a “compulsory licensing” proposal that is not unlike language in drug price negotiation bills introduced by Sen. Bernie Sanders (I-VT) and Rep. Ro Khanna (D-CA), and by Rep. Lloyd Doggett (D-TX).

    The Bayh-Dole Act permits compulsory licensing for the public health and safety, but it has never been used. Health care advocates have been calling for its use to help ensure critical medicines are affordable. But, the NIH has never wanted to step in. It does not want to be in the business of controlling drug prices.

    Some expect that, if HHS has compulsory licensing as a stick to bring down prices for drugs that are priced excessively, drug companies will come to the bargaining table to negotiate drug prices. They will not want the government to break their monopoly pricing power.

    If you want Congress to rein in drug prices, please sign this petition.

    Here’s more from Just Care:

  • Why doesn’t the federal government ensure reasonable prices for drugs developed with public funds?

    Why doesn’t the federal government ensure reasonable prices for drugs developed with public funds?

    The U.S. invests more than $32 billion each year in drug and biomedical research. This major public investment in drug research empowers the government to make drugs affordable under the Bayh-Dole Act of 1980. But, even when drug companies price critical drugs at staggeringly high prices, the government has never used this authority. Why doesn’t the federal government ensure reasonable prices for drugs developed with public funds—an appropriate return on the public’s investment?

    According to Peter Arno and Michael H Davis, Bayh-Dole revises the U.S. patent law so that the federal government can ensure new drugs developed in part or whole with federal dollars are priced reasonably. Put differently, when federal dollars support research on a new drug, the drug manufacturer is supposed to price the drug reasonably. If the manufacturer does not, the federal government has the right to authorize another manufacturer to license the drug and sell it at a reasonable price.

    So, even when there’s a patent on a drug developed with federal money, the U.S. has the right to a royalty-free license. As Alfred Engelberg and Aaron Kesselheim write in Nature Medicine, June 2016,  Senator Bayh explained that the goal was for the U.S. to “use for itself and the public good inventions arising out of research that the Federal Government helps to support.” But, the government’s authority under the law can be interpreted broadly or narrowly.

    To date, the government has interpreted the Bayh-Dole law narrowly. According to Peter Arno, “the federal government essentially has argued time and again that if a drug company sells the new drug in the U.S., it has met the criteria for Bayh-Dole; it completely misconstrues the part of Bayh-Dole that calls for making the drug available to the public on “reasonable terms.” Based on a review of Congressional testimony before passage of the Bayh-Dole Act, “reasonable terms” means reasonable prices.”

    Arno further explains that “both Democratic and Republican administrations have, for more than 30 years, refused to enforce this provision of Bayh-Dole. At the same time, counting on the lack of government interest in enforcement, the drug companies have been cavalier in even recording the Bayh-Dole legend in their patent applications (a requirement)–often leaving them out altogether, making it harder to track Bayh-Dole inventions.”

    Earlier this year, 50 members of Congress formally requested that the Department of Health and Human Services (DHHS) and the National Institutes of Health use their authority to enforce Bayh-Dole’s reasonable pricing provisions to help bring down the price of drugs. In a related response, to the high-priced drug (Xtandi) the DHHS argued that the need was not there since there was an adequate supply of the drug. (See documents appended below.)

    Why should the drug industry be the exclusive financial beneficiary of research that the public helps fund? The public should benefit as well. Instead, as we explained in a previous post, federal policy is driving up drug prices. If you think it’s time the federal government took action to bring down the price of drugs, sign this letter from Social Security Works to the next president of the United States requesting the President take executive action to rein in drug prices.

    Here’s more from Just Care:

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  • Clinton proposes plan to rein in some drug prices

    Clinton proposes plan to rein in some drug prices

    Recognizing that government intervention is needed to rein in some drug prices, Hillary Clinton has proposed a plan to help ensure people in the U.S. can afford their life-saving medications, if she’s elected president. This new plan supplements her proposals for reining in drug prices more generally, establishing a panel to oversee the price of critical drugs. The panel would be empowered to penalize drug companies that hike prices substantially on life-saving drugs that have been available at far lower prices for a long time; it could also make reasonably priced drugs available.

    While Clinton should be commended for bringing the issue of high drug prices into the spotlight of the presidential campaign, the devil is in her plan’s details. Practically, it’s hard to see how her proposal gets implemented in a way that serves the public interest. You can imagine a panel debating what it means for a drug price to increase substantially or how long a drug has to have been on the market for the panel to address its steep price. The efficacy of the oversight panel turns on who sits on it and panelists’ sense of what the right price of a drug should be.

    Clinton is proposing panelists from the public health and consumer protection worlds, but her executive authority is limited. Arguably, most of Clinton’s enforcement tools require Congressional action. Congress would need to pass legislation establishing a panel to impose penalties on drug companies that raise prices on drugs too high. And, it would have to ensure the panelists were chosen for their independence, a stretch to say the least.

    Congress has never been inclined to take action to rein in the price of drugs even though drug price negotiation is a top policy priority for Americans, so it’s hard to see why it would now. Members feign concern about prices and fail to act claiming they don’t want to stymy drug companies from innovating; PhRMA’s largesse when it comes to campaign contributions is formidable.

    Presumably, Clinton has authority to have the FDA lift its ban on importation of drugs from abroad for personal use to ensure their affordability. But, it’s unclear how much help that would be. While it is illegal to import drugs from abroad for personal use today, millions of people already do so in order to afford their medications. No one stops them. And, the FDA has never prosecuted a person for so doing.

    Also, the Bayh-Dole Act already gives the US government the executive authority to limit the price of many drugs that were developed with federal funds, though the government has never chosen to use its authority in the past 35 years under Democratic or Republican administrations. A Clinton administration arguably could choose to use its executive authority under Bayh-Dole or through a newly energized Consumer Financial Protection Bureau to ensure drug prices are reasonable.

    The question remains whether there’s steak in Clinton’s proposals or are they all sizzle?

    Here’s more from Just Care