Biotech
Thursday, December 7th, 2023 2:47 pm EDT
Key Points
- Biden Administration’s Push to Lower Drug Prices: The Biden administration has asserted its authority to seize patents for expensive medications as part of a broader initiative to reduce high drug prices in the United States. The administration introduced a framework, including factors for federal agencies to consider when utilizing march-in rights, a policy aimed at breaking patents for drugs developed with federal funds but not widely accessible. This move signifies a significant shift as officials can now consider a medication’s price, potentially impacting drugmakers.
- March-In Rights and Pharmaceutical Industry Opposition: The administration’s announcement follows a nine-month review of march-in rights, reflecting President Biden’s commitment to lowering drug prices. The pharmaceutical industry, a vocal critic of march-in rights, argues that such policies discourage research and development of new drugs. The administration’s willingness to use these rights could have substantial ramifications for the industry, which contends that seizing patents makes treatments vulnerable to competition, limiting revenue and hindering reinvestment in drug development.
- Challenges and Criticisms: Despite the push to use march-in rights, uncertainties surround how federal agencies will implement the new framework. The pharmaceutical industry’s largest lobbying group, Pharmaceutical Research and Manufacturers of America, criticized the administration’s move, expressing concern about undermining public-private collaboration in advancing new treatments. The article also highlights past administrations’ reluctance to exercise march-in rights, including the Trump administration’s proposed rule against using the policy based solely on a drug’s high price. Additionally, the Biden administration’s attempt to lower drug prices through other means, such as Medicare negotiations, has faced challenges, illustrated by the exclusion of the drug Xtandi from negotiation lists, leading to dropped lawsuits.
The Biden administration has intensified its efforts to curb high drug prices and promote pharmaceutical competition by asserting its authority to seize patents for certain expensive medications. The administration unveiled a framework delineating the factors federal agencies should consider when deciding to use march-in rights, a controversial policy allowing the breaking of patents for drugs developed with federal funds but not widely accessible. Notably, this marks the first time officials can factor in a medication’s price when considering the use of such powers, potentially impacting drugmakers significantly.
The move is part of President Joe Biden’s broader health-care agenda, emphasizing the reduction of U.S. drug prices, a key focus for his 2024 reelection platform. The announcement follows a nearly nine-month review of the federal government’s march-in rights, seeking to update the policy framework. Political pressure, including efforts by health-care companies to lower drug prices, has intensified, with CVS recently introducing a prescription drug pricing model aimed at reducing costs for patients.
A July survey revealed that nearly three in ten Americans struggle to afford the drugs they need, and U.S. patients spend approximately $1,200 more per person on prescription medications than those in other nations. The Biden administration contends that taxpayers, who have invested tens of billions of dollars in funding drugs over the last decade, may justify further government action to cut prices.
It remains uncertain how federal agencies will implement march-in rights under the new framework, considering that no agency has utilized this policy to date. The pharmaceutical industry, a longstanding critic of the policy, argues that seizing patents discourages research and development, limiting companies’ revenue and reinvestment in drug development.
The Biden administration’s push has drawn criticism from the pharmaceutical industry’s largest lobbying group, Pharmaceutical Research and Manufacturers of America, representing major drugmakers like Pfizer, Eli Lilly, and Johnson & Johnson. The group expressed concern that exercising march-in rights would undermine public-private collaboration, impacting the development of new treatments and cures.
Past administrations, both under Obama and Trump, rejected march-in requests from lawmakers and patient advocates. The Trump administration proposed a rule preventing the government from using the policy based solely on a drug’s high price, a proposal the Biden administration chose not to finalize. However, the Biden administration has previously refrained from using march-in rights, as seen in the March decision not to break the patent for the costly prostate cancer drug Xtandi from Astellas Pharma and Pfizer, which charges over $150,000 a year in the U.S., prompting criticism for price disparities between countries.
While the Biden administration has explored various avenues to lower drug prices, including giving Medicare the authority to negotiate drug prices, challenges persist, such as the exclusion of drugs like Xtandi from negotiation lists, raising concerns and leading to dropped lawsuits by pharmaceutical companies.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/12/07/biden-administration-asserts-power-to-seize-drug-patents.html
