[Olivier Le Moal/Adobe Stock]
While the government has had these rights for decades thanks to the 1980 Bayh-Dole Act, it has not used them previously. Before the Bayh-Dole Act, the federal government owned inventions resulting from federally funded research.
In making the decision to potentially seize patents for federally-funded therapies, officials argued that Americans often pay two to three times more than other countries for the same drugs, despite taxpayers investing billions in relevant research through agencies such as the NIH. Federal officials highlighted COVID-19 vaccines as a prominent example, balking at recent price hikes by Moderna and Pfizer despite public funds to aid development.
The government’s proposed framework states that high costs for federally-backed therapies would be a factor in determining if a medication is reasonably available. If companies refuse to lower prices, the government is prepared to authorize generic versions.
Federal officials will accept public comment for 60 days before finalizing the rules. Officials declined to specify which drugs it would initially target.
The introduction of march-in rights would be “a significant shift” in drug pricing regulations for medications developed with federal funding, said Brandon Newman, CEO of Xevant, a data analytics platform company. “This move could lead to more accessible pricing for essential drugs, directly benefiting patients and potentially leading to overall healthcare cost reductions in our country,” Newman said.
Unintended consequences of “march-in” rights
Newman also notes that the program could potentially “create a number of unintended consequences that, without proper impact analysis, may cause more harm than good.”
For instance, Newman notes that this proposed action could lead drug developers to re-evaluate investment strategies, particularly in research and development. “While the aim is to make drugs more affordable, there is a risk that it could inadvertently slow down innovation and advancements within the industry,” he noted.
Pharmaceutical groups such as PhRMA have similarly condemned the policy, arguing it would undermine public-private collaboration on new treatments.
Further elaborating on the potential downsides of the proposal, Newman underscores the broader implications for healthcare costs. “Most of the new, innovative specialty drugs coming to market are solving long-standing medical conditions that incur hospital and provider costs that are often ten times that of the medications used to address the conditions,” he noted. Eliminating patent protection could potentially put a stranglehold on the development of pioneering medicines. In the case that pharma firms churn out fewer new specialty medications and drug costs overall go down, this could paradoxically lead to higher overall healthcare costs.
Risks and opportunities for healthcare and affordability
Ultimately, implementation of march-in rights could spell both risks and opportunities for healthcare writ large. On one hand, the implementation could stifle pharma innovation. But on the other, the rights could lead to a more transparent and rational approach to drug pricing. “Instead of abrupt and potentially harmful patent elimination, we could seek action where pharmaceutical companies adopt more transparency and justifiable pricing models,” he said. That could bring pricing closer in line with the actual R&D costs and the tangible benefits of the medications.
“From a healthcare analytics perspective, modifying the policy to include more data-driven approaches to decision-making reduces inefficiencies and waste while delivering real-time performance and cost savings,” Newman added. “As government and industry stakeholders navigate these changes, the role of data in understanding drug pricing, patient access, and overall healthcare impact will become even more critical and apparent as a viable option for navigating pricing challenges.”
Filed Under: Drug Discovery and Development
