Biden administration asserts power to seize drug patents in move to slash high prices

President Joe Biden speaks about defending Social Security, Medicare, and decreasing prescription drug prices, throughout a go to to OB Johnson Park and Community Center, in Hallandale Beach, Florida, on Nov. 1, 2022.

Kevin Lamarque | Reuters

The Biden administration on Thursday asserted its authority to seize the patents of sure expensive drugs in a new push to slash high drug prices and promote extra pharmaceutical competitors.

The administration unveiled a framework outlining the components federal businesses ought to think about in deciding whether or not to use a controversial coverage, often known as march-in rights, to break the patents of medication that have been developed with federal funds however aren’t broadly accessible to the general public. For the primary time, officers can now issue in a medicine’s worth — a change that would have large implications for drugmakers relying on how the federal government makes use of the powers. 

“When drug corporations will not promote taxpayer-funded medicine at cheap prices, we might be ready to enable different corporations to present these medicine for much less,” White House National Economic Advisor Lael Brainard stated throughout a name with reporters Wednesday. 

The administration’s announcement follows a nearly nine-month review of the federal authorities’s march-in rights, which aimed to replace the framework for utilizing the coverage. It additionally comes as President Joe Biden makes lowering U.S. drug prices a key pillar of his health-care agenda and reelection platform for 2024. 

Political stress has pushed health-care corporations to launch their very own efforts to decrease drug prices. CVS on Tuesday unveiled a new prescription drug pricing model, which might probably reduce prices for sufferers on the pharmacy counter.

Nearly three in ten Americans wrestle to pay for the medicine they want, in accordance to a July survey from well being coverage analysis group KFF. And some research means that U.S. sufferers spend about $1,200 extra per individual on prescription drugs than these in every other nation.

Yet taxpayers have spent tens of billions of dollars to fund a whole lot of medication in the final decade — which the Biden administration believes might justify extra authorities motion to reduce prices.

It is unclear whether or not and the way federal businesses will use march-in rights below the brand new framework. Notably, “no company to date” has exercised the coverage, which happened below the Bayh-Dole Act of 1980, a senior administration official advised reporters Wednesday. 

Still, the Biden administration’s new push to use march-in rights might finally have main ramifications for the pharmaceutical trade, which has lengthy argued that the coverage discourages analysis and improvement of latest medicine.

Drugmakers have argued that seizing the patent for a medicine makes that remedy weak to competitors, which may scale back an organization’s income and restrict how a lot it will probably reinvest into drug improvement.

That pushback has made the federal authorities reluctant to use march-in rights in the previous, which has pissed off progressives on Capitol Hill. 

Activists protest the value of prescription drug prices in entrance of the U.S. Department of Health and Human Services (HHS) constructing on October 06, 2022 in Washington, DC.

Anna Moneymaker | Getty Images

The pharmaceutical trade’s largest lobbying group slammed the Biden administration’s push to train march-in rights in an announcement. 

“This can be yet one more loss for American sufferers who depend on public-private sector collaboration to advance new therapies and cures,” stated a spokesperson for Pharmaceutical Research and Manufacturers of America, which represents drugmakers similar to Pfizer, Eli Lilly and Johnson & Johnson. “The Administration is sending us again to a time when authorities analysis sat on a shelf, not benefitting anybody.”

Both the Obama and Trump administrations have rejected march-in requests from lawmakers and affected person advocates. The Trump administration even proposed a rule that would forestall the federal government from exercising the coverage primarily based on the high worth of a drug alone. 

The Biden administration selected not to finalize that proposal earlier this yr, in accordance to a launch from the White House on Thursday. 

But the Biden administration has additionally shied away from utilizing march-in rights up till now. In March, the administration declined to break the patent of the expensive prostate most cancers drug Xtandi from Astellas Pharma and Pfizer. 

The drugmakers cost greater than $150,000 a yr for Xtandi in the U.S. earlier than insurance coverage and different rebates, however cost a fraction of that price in different developed international locations.

The Biden administration has tried to decrease drug prices in different methods, similar to giving Medicare the power to negotiate drug prices for the primary time in the federal program’s 60-year historical past as a part of the Inflation Reduction Act. 

But Xtandi was excluded from the first ten medications the federal government chosen for negotiations, which prompted Astellas Pharma to drop a lawsuit it filed to halt the value talks.

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