Dec 7, 2023 - Health

Biden embraces power to break patents of costly drugs

Illustration of a gavel made of a pill bottle, touching a gavel rest made of a white pill.

Illustration: Shoshana Gordon/Axios

The Biden administration on Thursday laid out instances in which the federal government could break the patents of costly drugs developed with taxpayer funding in order to lower their prices.

Why it matters: Progressives have long advocated for so-called march-in rights, and President Biden's embrace of this authority plays into campaign messaging about taking on big pharma.

Yes, but: The administration isn't endorsing widespread use of the authority, and officials said that the framework isn't being immediately applied to any specific drug. The strategy could draw legal challenges from pharmaceutical companies.

Driving the news: The Commerce Department this morning proposed a framework for when agencies should consider using march-in rights for pricey treatments. For the first time, it specifies that price can factor into the decision.

  • The guidance enumerates factors to guide agencies' decision on whether to activate march-in rights.
  • "Nothing in this framework should be treated as a mandate that an agency exercise its march-in right, as a requirement that an agency collect facts to answer every question posed here, or as a limitation on the facts and questions an agency can consider," the proposed guidance says.

Between the lines: The power to invoke march-in rights stems from a 1980 law that allowed developers of inventions to maintain a stake in products developed with taxpayer funds. No government agency to date has used the authority to break a patent.

  • Biden, in a 2021 executive order on promoting competition, reversed a Trump administration policy to bar march-in rights on federally funded drugs.

But the Biden administration has resisted calls to exercise the rights, most recently when the National Institutes of Health in March refused to use the authority for a prostate cancer drug, Xtandi.

  • Senate health committee chairman Bernie Sanders (I-Vt.) for months held up Biden's nominee to lead NIH, partly over the march-in rights issue.
  • Now-confirmed NIH director Monica Bertagnolli didn't rule out using march-in rights on Wednesday — but she didn't commit to doing so either.
  • "I will use every tool I possibly can with the goal of obtaining the access that our patients need," Bertagnolli told reporters.

What they're saying: Drugmakers and Republican allies in Congress said the use of march-in rights would undermine innovation.

  • "This would be yet another loss for American patients who rely on public-private sector collaboration to advance new treatments and cures," said Megan Van Etten, spokesperson for the trade group PhRMA.

What's next: The federal government will accept public comment on the Commerce proposal for 60 days.

Maya Goldman and Tina Reed contributed reporting.

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