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Biden Administration's Bold Move to Lower Drug Prices: Cancelling Patent Protections

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Dr. Jessica Nelson
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Biden Administration's Bold Move to Lower Drug Prices: Cancelling Patent Protections

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In an unprecedented move, the Biden administration is considering the use of federal authority to cancel patent protections for medications deemed too expensive. This tactic, known as 'march-in rights,' has never been exercised before by any federal agency. The intent behind this action is to make drugs more affordable for the average American.

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March-in Rights and Drug Prices

According to the Biden administration, the threat of cancelling patents applies to taxpayer-funded drugs if they are priced beyond the reach of patients. In such cases, the government may override the patent for these high-priced drugs, which have been developed with the assistance of taxpayer money. The goal is to permit competitors to produce these drugs, hoping that competition will help drive down the cost.

Pharmaceutical Industry Concerns

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While the move is aimed at benefiting consumers, it is not without controversy. Pharmaceutical companies, represented by the lobbying firm Pharmaceutical Research and Manufacturers of America, have expressed concerns that this plan could significantly impact the development of future drugs. The fear is that it could dissuade the use of federally funded research in drug development, given the risk of patent cancellations due to high pricing.

Consolidation of Power in Health Care

The announcement of this potential policy shift has also cast a spotlight on the consolidation of power within the pharmaceutical and health insurance industries. The top 25 pharmaceutical companies account for approximately 70% of industry revenues, indicating a significant concentration of control. Similarly, the health insurance market is highly concentrated among a few key players.

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Public Response and Future Implications

The administration's plan will undergo a 60-day public comment period, allowing citizens to voice their thoughts and concerns. This move is part of President Biden's broader health care agenda, which includes lowering U.S. drug prices, a cornerstone of his reelection platform for 2024.

The potential implications of this policy are far-reaching. It could fundamentally change the pricing structure of drugs developed with taxpayer money. This, in turn, might make pharmaceutical companies reconsider their pricing strategies for such products. However, it remains to be seen how the plan will fare against anticipated challenges from drugmakers.

Increasing Transparency

Alongside this, the White House is also seeking to increase transparency regarding the ownership of health care facilities, including hospitals and nursing homes. This is part of a series of efforts by the administration to address anticompetitive practices in health care, aiming to create a more equitable and affordable health care system for all Americans.

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