President Joe Biden speaks about protecting Social Security, Medicare, and lowering prescription drug costs, during a visit to OB Johnson Park and Community Center, in Hallandale Beach, Florida, on Nov. 1, 2022.
Kevin Lamarque | Reuters
The Biden administration on Thursday opened the door to seizing the patents of certain costly medications from drugmakers in a latest push to slash high drug prices and promote more pharmaceutical competition.
The administration unveiled a framework outlining the aspects federal agencies should consider in deciding whether to use a controversial policy, referred to as march-in rights, to take patents for drugs developed with taxpayer funds and share them with other pharmaceutical firms if the general public cannot “reasonably” access the medications. Doing so may lead to the event of lower-priced generic alternatives, which could cut into key drug firms’ profits and reduce costs for patients.
For the primary time, officials can now think about a drugs’s price in deciding to break a patent.
It’s unclear whether and the way federal agencies will use march-in rights under the brand new framework. Notably, “no agency to date” has exercised the policy, which got here about under the Bayh-Dole Act of 1980, a senior administration official said during a call with reporters Wednesday.
However the administration will “make it clear that when drug firms won’t sell taxpayer-funded drugs at reasonable prices, we will probably be prepared to allow other firms to provide those drugs for less,” Lael Brainard, White House national economic advisor, told reporters.
The framework will probably be open to public comment for 60 days.
The administration’s announcement follows a nearly nine-month review of the federal government’s march-in rights, which aimed to update the framework for using the policy.
It also comes as President Joe Biden makes lowering U.S. drug prices a key pillar of his health-care agenda and reelection platform for 2024.
Political pressure has pushed health-care firms to launch their very own efforts to lower drug prices. CVS on Tuesday unveiled a latest prescription drug pricing model, which could potentially cut costs for patients on the pharmacy counter.
Nearly 3 in 10 Americans struggle to pay for the drugs they need, according to a July survey from health policy research organization KFF. And a few research suggests that U.S. patients spend about $1,200 more per person on prescription medications than those in some other nation.
Yet taxpayers have spent tens of billions of dollars to fund a whole lot of medication within the last decade — which the Biden administration believes could justify more government motion to cut prices.
The administration’s latest push to use march-in rights could eventually have major ramifications for the pharmaceutical industry, which has long argued that the policy discourages research and development of recent drugs.
Activists protest the worth of prescription drug costs in front of the U.S. Department of Health and Human Services (HHS) constructing on October 06, 2022 in Washington, DC.
Anna Moneymaker | Getty Images
Drugmakers have argued that seizing the patent for a medicine makes that treatment vulnerable to competition, which may reduce an organization’s revenue and limit how much it could possibly reinvest into drug development.
That pushback has made the federal government reluctant to use march-in rights previously, which has frustrated progressives on Capitol Hill.
On Thursday, Sen. Elizabeth Warren told CNBC that the Biden administration’s latest framework “is using the proper approach overall, which is use every tool within the toolbox to bring down drug prices.”
“When there is no competition in a market, then that falls hard on individuals who need that drug,” the Massachusetts Democrat said. “It also falls hard on taxpayers who find yourself paying for it through other government programs.”
She added that march-in rights have existed within the law for a very long time. But that power hasn’t been “picked up and used very aggressively,” so she is glad to see the administration “move on this direction.”
Meanwhile, the pharmaceutical industry’s largest lobbying group slammed the Biden administration’s push to exercise march-in rights in an announcement.
“This could be one more loss for American patients who depend on public-private sector collaboration to advance latest treatments and cures,” said a spokesperson for the Pharmaceutical Research and Manufacturers of America, which represents drugmakers corresponding to Pfizer, Eli Lilly and Johnson & Johnson. “The Administration is sending us back to a time when government research sat on a shelf, not benefitting anyone.”
The White House feigned disappointment concerning the lobbying group’s stance in a post on X, formerly referred to as Twitter.
“Oh no. We have upset Big Pharma again,” the White House said.
Each the Obama and Trump administrations had rejected march-in requests from lawmakers and patient advocates. The Trump administration even proposed a rule that would prevent the federal government from exercising the policy based on the high price of a drug alone.
The Biden administration selected not to finalize that proposal earlier this 12 months, according to a release from the White House on Thursday.
However the Biden administration has also shied away from using march-in rights up until now. In March, the administration declined to break the patent of the costly prostate cancer drug Xtandi from Astellas Pharma and Pfizer.
The drugmakers charge greater than $150,000 a 12 months for Xtandi within the U.S. before insurance and other rebates, but charge a fraction of that price in other developed countries.
The Biden administration has attempted to lower drug prices in other ways, corresponding to giving Medicare the power to negotiate drug prices for the primary time within the federal program’s 60-year history as a part of the Inflation Reduction Act.
But Xtandi was excluded from the primary 10 medications the federal government chosen for negotiations, which prompted Astellas Pharma to drop a lawsuit it filed to halt the worth talks.
Also on Thursday, the Biden administration unveiled efforts that aim to counter allegedly anti-competitive practices by big health-care firms.
Some goal private equity firms, which have been buying up physician practices, nursing homes and other health-care providers. Private equity ownership within the health-care industry has ballooned, with roughly $750 billion in deals between 2010 and 2020, according to a report from the American Antitrust Institute.
The administration is anxious that corporate owners are “maximizing their profits on the expense of patients’ health and safety, while increasing costs for patients and taxpayers alike,” according to a White House fact sheet.
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