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The Biden Administration's Proposed Rule to Seize Drug Patents: An Endeavour to Tackle Prescription Drug Affordability

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Zara Nwosu
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The Biden Administration's Proposed Rule to Seize Drug Patents: An Endeavour to Tackle Prescription Drug Affordability

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In a substantial move towards prescription drug affordability, the Biden administration has proposed a rule that could potentially shake up the pharmaceutical industry. This rule allows the government to seize patents for medicines developed with taxpayer money if they are perceived as unaffordable to the American public. The administration could then license these patents to another party, in an effort to reduce the high prices associated with prescription drugs.

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The March-In Rights

The Biden administration is implementing a framework to enforce the government’s march-in authorities on drugs developed with taxpayer dollars. This legislation allows federal agencies that provided the funding to compel companies that manufacture such products to provide a license to a responsible applicant. This could be a nonexclusive, partially exclusive, or exclusive license. This move is seen as a response to drugmakers who refuse to make their products reasonably available to the public.

The concept of 'march-in rights' refers to the government’s authority to revoke a company’s exclusive rights to a patented product or invention, developed with federal funding, if it is not made available to the public on reasonable terms. Historically, the federal government has never exercised these rights. This proposal represents a significant shift in policy, potentially setting a new precedent for the relationship between the government and pharmaceutical companies.

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Pharmaceutical Industry Reactions and Implications

The Pharmaceutical Research and Manufacturers of America (PhRMA) expressed concern over this proposal, arguing that it could potentially hinder innovation in the industry. Yet, Democratic lawmakers have been lobbying the Health and Human Services Secretary to utilize march-in rights to lower the price of specific drugs.

Under this proposal, the administration is specifically targeting 10 drugs for older Americans to lower costs under Medicare price negotiations. However, it is important to note that the administration will not endorse the widespread use of march-in rights and is not expected to take action against any individual medicines. This strategy is seen as the culmination of a nearly nine-month review of the government’s so-called march-in rights, a review heavily influenced by progressives in an effort to create more competition and lower prices in the pharmaceutical industry.

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Aiming to Lower High-Priced Medications

The Department of Health and Human Services and the Department of Commerce have jointly issued a regulatory framework that allows the agencies to utilize the Bayh-Dole Act of 1980. This act provides the agencies the authority to claim march-in rights on patents for products or inventions created with research dollars from the federal government. This move aims to target high-priced medications that were developed with federally funded research.

While the proposal is a significant step towards addressing the issue of prescription drug affordability, it will undoubtedly face numerous challenges and debates. As the Biden administration continues to push for this change, the ultimate impact of this proposed rule on the pharmaceutical industry and the public remains to be seen.

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