On Thursday, December 7th, the Biden Administration announced a groundbreaking policy shift in the healthcare sector aimed at tackling the long-standing issue of high drug prices in the United States. This new policy sets a precedent by allowing the federal government to seize patents for medicines developed with government funding if their prices are deemed excessively high.
The new Biden policy marks a significant departure from previous administrations’ approaches and is part of a broader initiative to lower healthcare costs and promote competition. It is rooted in the exercise of march-in rights, a provision enabled by the Bayh-Dole Act, which has never been used before in this context. The march-in rights allow the government to license drugs or inventions backed by taxpayer funds to other parties if the invention is not made accessible to the public. For the first time, the proposed framework specifies that price can be a factor in determining the accessibility of a taxpayer-funded drug or other invention.
The Biden administration’s move comes as a response to growing concerns over healthcare affordability and big healthcare companies’ practices. The Biden administration has introduced several measures, including allowing Medicare to negotiate certain drug prices and capping the cost of insulin. However, the new policy of potentially seizing patents is seen as a more aggressive step toward curbing high drug prices.
This policy has already sparked debate, with certain Democratic lawmakers pushing for greater use of march-in rights to counter high drug prices, while some Republican senators argue that the Biden administration does not have the legal authority for this use of march-in rights. The administration, however, stands firm on its stance, stating that price can now be a factor in determining when the federal government can intervene to ensure lower prices.
In addition to the patent seizure policy, the Biden administration has unveiled efforts aimed at countering anti-competitive practices by big healthcare companies. These include scrutinizing the growing involvement of private equity and other corporations in healthcare, which officials believe are maximizing profits at the expense of patient’s health and safety while increasing costs for patients and taxpayers.
The new policy represents a bold attempt by the Biden administration to address the complex issue of drug pricing in the U.S. It reflects a growing recognition of the need for more effective measures to ensure that life-saving medicines are accessible and affordable for all Americans.