Biden Administration Says It Can Seize Patents of Costly Drugs

President Joe Biden’s administration says it has the authority to seize certain drug patents and license them to other manufacturers in order to lower prices — a move aimed to appeal to Americans grappling with high health-care costs.

The administration on Thursday unveiled a new framework for US agencies to use so-called march-in rights. This would allow authorities to take over the patent of some drugs that were developed with the help of taxpayer dollars and then license the invention to another entity. This step would be taken if the drug prices are deemed to be too high.

Senior administration officials, speaking with reporters on Wednesday, declined to comment on specific drugs that could be targeted.

“The administration believes taxpayer-funded medications should be reasonably available and affordable,” the White House said in a statement, adding that competition can help to drive down costs.

The shift comes months after the Department of Health and Human Services and Department of Commerce announced an effort earlier this year to review the Bayh Dole Act, a 1980 law that lets organizations own, patent and sell products that were researched and developed with the help of federal funding.

So-called march-in authority can be triggered if a taxpayer-funded product isn’t made available to the public on “reasonable terms.” Now, price will be considered as a part of that framework. This authority has never been used to target pharmaceutical prices, senior administration officials said.

Politico earlier reported on the administration’s policy shift on Wednesday, citing people familiar with the situation.

Megan Van Etten, a spokesperson for the industry trade group Pharmaceutical Research and Manufacturers of America, said the framework represents “yet another loss for American patients who rely on public-private sector collaboration to advance new treatments and cures.”

“The administration is sending us back to a time when government research sat on a shelf, not benefiting anyone,” she said in a statement.

Previously, the Trump administration had proposed a rule preventing the government from exercising this authority on the sole basis of price. The Biden administration did not finalize that proposal.

The White House announced additional efforts on Thursday to thwart anticompetitive deals and bring more transparency around the ownership of hospitals, nursing homes and hospices. It also said it will investigate how private equity firms are having an impact on the quality of patient care.

The US has the highest drug costs in the world. As such, President Joe Biden has made lowering drug costs a pillar of his 2024 presidential campaign. It’s now been more than a year since he signed the Inflation Reduction Act, which is allowing Medicare to bargain with drugmakers for lower prices for some costly medications.

To contact the reporter on this story:
Riley Griffin in Washington at rgriffin42@bloomberg.net

To contact the editors responsible for this story:
Jonathan Roeder at jroeder@bloomberg.net

Kelly Gilblom

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