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Photo: Budrul Chukrut/SOPA Images/LightRocket via Getty Images

The federal government has watered down legal rights that could allow it to take over the rights of some potential coronavirus drugs, according to federal contracts obtained by consumer group Knowledge Ecology International and shared with Axios.

The big picture: The federal government has never used its so-called "march-in rights," but they're a theoretically powerful tool to intervene in cases where pharmaceutical companies charge high prices or don't produce enough of a product.

How it works: Federal march-in rights, which have existed for 40 years but have never been exercised, spell out four circumstances in which the government can take over the patents on drugs that were developed with federal funding, and license those patents to other companies.

Those rights can kick in if a patent holder doesn't make its medicines "available to the public on reasonable terms," known as "practical application."

  • Three of those words — "on reasonable terms" — are "the legal basis for intervening in cases of unreasonable drug prices," said Kathryn Ardizzone, the lead attorney for Knowledge Ecology International, a progressive public interest group.

But several companies making coronavirus drugs and vaccines have deleted those words from contracts with the Biomedical Advanced Research and Development Authority, or BARDA, which is part of the Department of Health and Human Services.

  • Further, the contracts have deleted or narrowed the other circumstances in which march-in rights can be invoked, according to documents Knowledge Ecology International obtained through an open records request.
  • Genentech, owned by Roche, and Regeneron defined "practical application" in their federal contracts only as making their coronavirus drugs "available to the public for a regulatory approved product." No mention of "on reasonable terms."
  • Janssen, owned by Johnson & Johnson, used vaguer language, saying its drug only needs to be "capable of being utilized."
  • The portion of Regeneron's BARDA contract that spells out the other specific clauses of when the federal government could invoke march-in rights — titled "compulsory licensing rights" — is completely redacted and labeled a trade secret.

Yes, but: The federal government appears to retain full march-in rights for Moderna's coronavirus vaccine, based on language adopted in Moderna's contract with BARDA.

HHS said in a statement that the BARDA contracts "are focused on product development" and that when purchasing drugs, "one of the considerations in the price is any federal funding that was provided to develop the product.

  • The department did not address questions about march-in rights.

The bottom line: Experts and drugmakers alike say coronavirus drugs are likely to be sold at only a small profit, but the government seems to be eliminating some of its legal recourse in case that doesn't happen.

Go deeper: You can read all of the federal documents obtained by KEI here.

Go deeper

D.C. urges Rose Garden ceremony attendees to get tested for COVID-19

Staff and visitors during a ceremony to announce Barrett as Trump's nominee to the Supreme Court in the Rose Garden. Photo: Jabin Botsford/The Washington Post via Getty Images

The Washington, D.C. Department of Health on Thursday asked attendees and White House staff at the Rose Garden celebration for the introduction of Supreme Court nominee Amy Coney Barrett on Sept. 26 to seek medical advice and get tested for COVID-19 by their local health department.

Why it matters: The outbreak tied to the White House contributed to an increase in the District's caseload. D.C. experienced a 26% increase last week, rising from some 40 new cases per day to about 50.

Oct 9, 2020 - Health

HCA to return $1.6 billion in coronavirus bailout funds

HCA's hospitals are closing the books on a profitable Q3, despite the pandemic. Photo: Rusty Russell/Getty Images

HCA Healthcare is giving back $1.6 billion of federal bailout payments and paying back $4.4 billion in Medicare loans early. The money was intended to help hospitals weather the pandemic as patients delayed elective care.

Why it matters: Over the summer, the hospital industry said the pandemic was resulting in "the greatest financial crisis we have ever faced in our history." But HCA expects to report higher revenue and adjusted profits in the third quarter.