JustCare

Tag: March-in rights

  • 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.

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  • 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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