President Joe Biden has entered the ongoing debate surrounding the National Institutes of Health's (NIH) authority to override exclusive patent licenses granted to drug developers when they charge exorbitant prices for treatments developed with agency-funded research. The Biden administration released draft policy guidance, outlining the use of "march-in" rights, enabling federal agencies to intervene when a company is deemed to be charging an unreasonable price for a product.
This proposed framework is part of a broader initiative by the White House to address the issue of high drug prices, a concern shared by both policymakers and the public. The guidance aims to clarify the circumstances under which patent protection can be removed to ensure that a government-funded invention is commercialized at a reasonable cost. While consumer advocates and lawmakers support the proposal, some express concerns that the criteria for determining a "reasonable" price may be challenging to establish.
The pharmaceutical industry and academic institutions are expected to oppose the initiative, arguing that such measures could discourage industry investment in developing and commercializing treatments based on taxpayer-funded research. The Pharmaceutical Research and Manufacturers of America trade group criticized the proposal, labeling it a "road map for seizing patents" and expressing concerns about its impact on patients and inventors.
The concept of march-in rights originated in the 1980 Bayh-Dole Act, allowing academic institutions to patent inventions funded by NIH or other federal grants and grant exclusive licenses to companies. If an invention is not being commercialized or made accessible to the public, the government can exercise march-in rights to compel the patent-holder to license the invention to additional entities.
Consumer and patient groups have advocated for NIH to use march-in rights for drugs considered inaccessible due to high prices. Despite several petitions over the years, NIH has never invoked these rights. The new framework provides factors that agencies may consider, including the reasonableness of the price, when deciding whether to exercise march-in rights.
Critics argue that the guidance's requirement of an "extreme and unjustified" price may be too stringent, and concerns linger about the lack of mention of foreign drug prices. The impact of the proposed guidance on actual practices remains uncertain, with experts suggesting that march-in rights may only be applicable to a small subset of drugs, given the complexity of patent landscapes for most pharmaceuticals.
