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New White House Guidelines Aim to Lower Drug Prices Developed with Federal Funding

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Ayanna Amadi
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New White House Guidelines Aim to Lower Drug Prices Developed with Federal Funding

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In an unprecedented move, the White House has proposed new guidelines to pressure pharmaceutical companies into lowering the prices of drugs developed with federal funding. This initiative may lead to the government bypassing patent protections for these medicines if their price is seen as extreme, unjustified, and exploitative of a health or safety need. The draft guidelines call for stakeholder input before finalization, a process that has been met with both criticism and praise.

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Implementing March-in Rights

These guidelines are based on march-in rights established under a 1980 law. These rights were coined to ensure that inventions developed with federal funding were made accessible to the public. However, they have never been enforced until now. The Biden administration is prepared to use this power for the first time, highlighting its commitment to making medication more affordable for the public. The Departments of Health and Human Services (HHS) and Commerce will be releasing a proposed framework suggesting that the high costs of drugs developed with taxpayer funds will contribute to whether a medication is considered to be available on a “reasonable” basis.

Threatening Patent Protections

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The Biden administration is warning pharmaceutical companies that if the price of certain drugs is too high, the government may cancel their patent protection. This would allow rivals to manufacture their own versions, ultimately driving down the cost. This aggressive campaign is a part of the Biden administration's broader effort to drive down drug prices, a key priority as the president seeks reelection.

Invoking March-in Rights

The Biden administration has determined that it can invoke march-in rights to take back patents of specific expensive medicines that rely on federally funded research. Although the government will not encourage the widespread use of these march-in rights, nor is it likely to wield this authority against any individual pharmaceutical product, this move signals the start of a more aggressive federal campaign to reduce drug prices.

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Industry Response

The proposed framework for the march-in authority has been met with heavy criticism from the main pharmaceutical industry trade group, the Pharmaceutical Research and Manufacturers of America. They argue that the authors of the original law could not have anticipated the pricing power drugmakers can obtain through intellectual property monopolies, making this move potentially disruptive and controversial.

Further Developments

The White House's proposed policy would allow the U.S. government to sidestep patent protections for drugs developed with federal funding. The newly published framework gives agencies the power to act “if it appears that the price is extreme, unjustified, and exploitative of a health or safety need.” The agency is seeking further comment on its guidance before publishing a final version. This marks a significant shift in the approach to drug pricing, and further developments are eagerly awaited by all stakeholders.

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