Oct 7, 2022 - Health

Becerra leaves door open to march-in rights to lower drug prices

Photo illustration of Xavier Becerra with prescription drugs, money and abstract shapes.

Photo illustration: Shoshana Gordon/Axios. Photo: Amanda Andrade-Rhoades/Bloomberg via Getty Images

Despite newly enacted drug pricing measures, the Biden administration hasn't ruled out more sweeping actions to lower the cost of medicines, including asserting control over the patents of treatments developed with the government's help.

Why it matters: The Inflation Reduction Act signed by President Biden in August for the first time allows Medicare to negotiate lower prices for some drugs. But Health and Human Services Secretary Xavier Becerra on Thursday left an even bigger sword hanging over the pharmaceutical industry, saying so-called march-in rights are not "off the table."

Between the lines: Progressive advocates have been pushing for years for the federal government to use power under a 1980 law to "march in," take over the patent of a drug and license it to other manufacturers as a way to lower the price.

  • Even the Obama administration rejected the idea, a sign of how out of the ordinary any move by the Biden administration would be.
  • Then-National Institutes of Health director Francis Collins wrote in 2016 that the power was meant to be used in instances like when a drug is in short supply, not when it simply has a high price.
  • The federal government narrowed the circumstances under which it could assert the rights for some prospective COVID-19 drugs.

What they're saying: "We will continue to explore every option we have," Becerra told reporters when asked about march-in rights. "We've never taken anything off the table. And we will work on every one of those aspects of lowering drug prices. Why don't I leave it at that?"

Be smart: It would be a major shock if HHS actually went through with using march-in rights, especially because Congress just took action on drug pricing.

  • But it is notable that Becerra isn't ruling out the idea, and is content to at least let the threat linger.

The big picture: The idea has gained ground in the Democratic Party. Multiple 2020 presidential candidates touted the idea, though it tended to be progressives like Sens. Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) more than Joe Biden.

  • Progressive advocates are keeping up the pressure, protesting outside HHS headquarters in support of march-in rights on Thursday.
  • Peter Maybarduk, a drug pricing advocate at Public Citizen, said at the protest that the Inflation Reduction Act is a "generational victory," but more action is needed to target launch prices of new drugs and disrupt "the monopoly control that is the root of corporations' pricing power."
  • Drug companies argue the move would upend the system that allows for innovation and encourages development of new treatments.

The bottom line: While further action hangs as a possibility, HHS must also begin implementing the Inflation Reduction Act. Asked about relations with pharmaceutical companies given their opposition to the law, Becerra said he's seeking an open process as details are worked out.

  • "We're going to include them all the way through," he said.
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