Biden admin threatens to seize taxpayer-funded drug patents if pharmaceutical companies set prices too high

News & Politics

On Thursday, the White House threatened to cancel and seize taxpayer-funded drug patents if the prices for those medications were deemed too high and thereby inaccessible to the public. The Biden administration stated that the move aims to lower the cost of prescription medications.

“As part of the President’s Bidenomics agenda, the Biden-Harris Administration is cracking down on price gouging and taking on special interests to lower costs for consumers and ensure every American has access to high-quality, affordable health care,” a press release from the White House stated.

Biden blamed “corporate special interests and trickle-down economics” for enabling pharmaceutical giants to inflate drug prices.

“Today, the Biden-Harris Administration is announcing new actions to promote competition in health care and support lowering prescription drug costs for American families, including the release of a proposed framework for agencies on the exercise of march-in rights on taxpayer-funded drugs and other inventions, which specifies that price can be a factor in considering whether a drug is accessible to the public,” the White House stated. “The Administration believes taxpayer-funded medications should be reasonably available and affordable.”

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The administration noted that 70% of the pharmaceutical industry’s revenue is generated by 25 companies. Biden blamed the “lack of competition” for driving up prices for consumers.

Pharmaceutical companies have received “hundred of billions of dollars” from American taxpayers to research and develop new prescription drugs.

“When an invention is made using taxpayer funds, under certain circumstances march-in authority under the Bayh-Dole Act enables the federal government to license the invention to another party,” the White House explained.

Drugs that are deemed “not reasonably available to Americans” based on price could be seized by the government and licensed to another manufacturer that “could sell it for less,” Biden said.

The president claimed using the march-in authority would be “good for competition,” the economy, and “the millions of Americans who can’t afford their medications.”

Following a nearly nine-month review, the Department of Commerce and the Department of Health and Human Services issued a proposed framework for executive agencies regarding march-in rights on Thursday, declaring that the federal government can seize drug patents based on high prices.

The proposed framework is open to public comment for 60 days.

HHS Secretary Xavier Becerra called the federal government’s march-in authority “a powerful tool” for increasing the public’s access to taxpayer-funded medications.

People familiar with the matter told Politico that the Biden administration does not support the widespread use of march-in rights and does not currently have plans to seize patents from any pharmaceutical companies.

In August, the Biden administration released a list of 10 Medicare Part D medications now subject to price negotiations. The Inflation Reduction Act gave Medicare the authority to negotiate drug prices with pharmaceutical companies at the threat of up to 95% tax.

Former National Economic Council Deputy Director Bharat Ramamurti applauded Biden for being the first president to consider using the march-in authority.

“What we have essentially is the U.S. taxpayer, in many cases, putting up the money upfront to finance the research and innovation that goes into creating these life-saving drugs,” Ramamurti explained. “And then our reward for that is that we then pay two or three times as much on the back end to actually take advantage of the drugs.”

Critics contend that the Biden administration is using the opportunity to expand the federal government’s control, expressing concerns that the move would suppress innovation.

“So now dictator Biden seizes the intellectual property of hard-working Americans. He is the dictator!” Representative Mark Green (R-Tennessee) wrote on X Thursday.

U.S. Senator Bill Cassidy (R-Louisiana) stated, “The Biden administration does not have the legal authority to use the Bayh-Dole Act to seize drug patents. Prior administrations of both parties have all agreed on this, as have the bipartisan senators who wrote the law. They will lose in court.”

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