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Mandatory Licensing in Drug Pricing Reform with Biden’s Directive

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The White House made an announcement indicating the possibility of seizing ownership of patents on medications developed using public funds if drug pricing appears excessively high. This proposal introduces the concept of ‘march-in rights,’ allowing the government to enforce licensing of these drugs to alternative manufacturers willing to provide them at a “reasonable price.” This move is part of the government’s strategy to address soaring drug pricing and is likely to spark renewed debate within the pharmaceutical industry.

The objective of this policy is to make drugs and inventions supported by taxpayer funding more accessible and affordable to the public. The discussion was intensified during the pandemic when manufacturers of taxpayer-funded mRNA-based COVID-19 vaccines notably increased prices significantly after transitioning to a regular commercial model.

The proposal is currently open for a 60-day comment period before it becomes final. The Pharmaceutical Research and Manufacturers of America (PhRMA) has swiftly expressed opposition, arguing that such measures hinder public-private collaborations essential for advancing new treatments.

Enhancing Accessibility of Taxpayer-Funded Drugs Post-Pandemic

The White House, invoking the Bayh-Dole Act of 1980 as a foundation for this policy, faces pushback, with PhRMA contending that the Act was not intended for government price regulation. This move aligns with prior efforts to curb drug prices, including allowing Medicare to negotiate lower drug costs and compelling drug companies to pay rebates to Medicare in case of rapid price hikes, all of which have faced legal challenges from the pharma sector.

Additional initiatives include capping insulin prices for seniors at $35 per month and securing health insurance savings for millions of Americans. This stands in contrast to the prior Trump administration’s proposal, which aimed to restrict the government’s authority to intervene based solely on high prices.

Drug Pricing

US Government Initiatives to Tackle Healthcare Corporate Practices and Drug Pricing

The White House also disclosed plans for a comprehensive inquiry into corporate practices within healthcare and a scrutiny of anti-competitive acquisitions known as ‘roll-ups’ that could lead to market consolidation. Moreover, compulsory licensing of patents emerges as a strategy in the EU to regulate drug pricing, albeit primarily considered for emergency scenarios by the European Commission.

This development signifies a broader attempt by the US government to address the contentious issue of exorbitant drug pricing, aiming to balance innovation incentives with ensuring affordable access to essential medications. The debate continues between government interventions and industry concerns about potential impacts on innovation and collaboration, setting the stage for a crucial period of public commentary and potential policy revisions in the pharmaceutical landscape.


Resource: Pharmaphorum, December 08, 2023

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