Biden Proposes Seizing Patents for Expensive Drugs to Lower Costs Using Government Intervention

Biden Administration Proposes Rule Allowing Seizure of Costly Drug Patents

The Biden administration has put forth a new rule that would enable federal authorities to seize patents of expensive drugs developed utilizing taxpayer funds. The plan would allow third parties to use these patents in order to make the drugs more affordable and available to the public.

The National Institute of Standards and Technology (NIST), a branch of the U.S. Department of Commerce, published draft guidelines on Dec. 7 aimed at assisting government agencies in determining when it might be necessary to utilize “march-in” rights according to the legal structure of the Bayh-Dole Act.

The Bayh-Dole Act, also known as the University and Small Business Patent Procedures Act of 1980, gives the government the power to suspend patents for products and inventions developed with federal funding if these products or inventions are not made accessible to the public.

The proposed guidelines seek to modify the Bayh-Dole Act so that high prices of products or inventions developed using taxpayer dollars would be enough to trigger the government’s use of the act’s march-in provisions.

The march-in provisions have never been utilized and would allow authorities to seize patents of drugs deemed too expensive by the original holders and grant licenses to third parties to produce these drugs at more affordable prices.

The draft will be published in the Federal Register on Dec. 8 and will be open for public comment for 60 days. President Joe Biden viewed the proposal as a way to curb “Big Pharma price gouging,” while the main pharmaceutical industry trade group, the Pharmaceutical Research and Manufacturers of America, expressed concerns about the negative impact of the proposal.

Under the new draft guidelines, the government would have the authority to consider “reasonableness of the price” when determining whether to invoke the march-in rights. The plan is to enable federal agencies to act if the price of a drug seems unreasonable, unjustified, and exploitative of a health or safety need.

The White House adviser Lael Brainard emphasized that if drug companies do not sell taxpayer-funded drugs at reasonable prices, other companies will be permitted to offer these drugs at more affordable rates. The proposal was met with criticism from PhRMA, with the trade group arguing that the current structure of the law has contributed significantly to the U.S. economy and created millions of jobs.

The authors of the Bayh-Dole Act, former senators Birch Bayh and Robert Dole, have publicly stated that the intent of the law was to encourage collaboration between public and private research to benefit patients and that the government was not intended to set prices of products.

The proposal comes amid growing criticism from the Democratic Party’s progressive wing, which has been urging the Biden administration to utilize march-in power to lower drug prices. The controversial proposal has sparked a fierce debate between different stakeholders in the pharmaceutical industry and lawmakers, as the country grapples with the issue of exorbitant drug prices.

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