December 7, 2023, President Biden introduced new actions to advertise competitors in well being care and to decrease prescription drug prices. Of specific notice is a newly unveiled framework for deciding whether or not the Authorities could train “march-in” rights and take a pharmaceutical firm’s drug patents developed with federal funds and share them with different corporations. See Draft Interagency Steerage Framework for Contemplating the Train of March-In Rights, accessible right here (“Draft Steerage”).
When an invention is made with federal help, the federal authorities could train its “march-in” rights to license the patented invention to a different occasion, even when the patent proprietor disagrees. The controversial “march-in” rights have hardly ever, if ever, been exercised since its preliminary creation by the Bayh-Dole Act of 1980.
The newly introduced Draft Steerage lists quite a few components and issues for evaluating whether or not the Authorities ought to train the “march in” rights. A lot of them seem to direct authorities companies to think about particularly the worth of pharmaceuticals:
- “Has the contractor or licensee made the product accessible solely to a slender set of shoppers or clients due to excessive pricing or different extenuating components?”
- “Is the contractor or the licensee exploiting a well being or security want with the intention to set a product worth that’s excessive and unjustified given the totality of circumstances?”
- “[H]because the contractor or licensee applied a sudden, steep worth enhance in response to a catastrophe that’s placing individuals’s well being in danger?”
- “At what worth would one other licensee(s) have the ability to make the product accessible to the general public?”
Additionally it is fascinating to notice that the Draft Steerage seems to acknowledge that the FDA’s regulatory exclusivity isn’t topic to the “march-in” rights. The Draft Steerage asks companies to think about if “the services or products [is] topic to regulatory exclusivity, comparable to these supplied by the FDA,” and “how a lot time stays within the interval of exclusivity.”
Pharmaceutical Analysis and Producers of America (PhRMA) warns that misuse of “march-in” rights would chill innovation and undermine collaboration between the private and non-private sectors, and that promising new applied sciences would sit on the shelf benefitting nobody. See right here.
The Draft Steerage is at the moment open to public remark for 60 days. At Sheppard Mullin we’re carefully monitoring the rulemaking course of, and can present our purchasers with probably the most up-to-date evaluation and recommendation.