US sets policy to seize government-funded drug patents if price deemed too high

By Patrick Wingrove

(Reuters) – The Biden Administration on Thursday announced it is setting new policy that will allow it to seize patents for medicines developed with government funding if it believes their prices are too high.

The policy creates a roadmap for the government’s so-called march-in rights, which have never been used before. They would allow the government to grant additional licenses to third parties for products developed using federal funds if the original patent holder does not make them available to the public on reasonable terms.

White House advisers said on a press call that cost to consumers is a factor government agencies may consider when thinking of using march-in rights.

“We’ll make it clear that when drug companies won’t sell taxpayer funded drugs at reasonable prices, we will be prepared to allow other companies to provide those drugs for less,” White House adviser Lael Brainard said on the call.

The U.S. government has previously resisted calls to seize the patents of costly drugs, declining in March to force Pfizer and Astellas Pharma to lower the price of their prostate cancer drug Xtandi.

The government will give the public 60 days to comment on the new proposal before attempting to finalize it.

Megan Van Etten, a spokesperson for the leading pharmaceutical industry group PhRMA, said allowing the government to use march-in rights based on price would stunt innovation and harm patients.

“The Administration is sending us back to a time when government research sat on a shelf, not benefiting anyone,” she said.

March-in rights were introduced as a safeguard in the Bayh-Dole Act of 1980, which allows the inventors to retain ownership of inventions or products developed with public funds and hold patents.

Progressive lawmakers in the Democratic Party have this year heaped criticism on drugmakers that developed therapies with government funding, and called on President Joe Biden’s administration to use its march-in authority to lower drug prices.

In March, Moderna CEO Stephane Bancel was called to testify in Congress after the company flagged plans to raise the price of its COVID-19 vaccine to as much as $130 per dose, drawing the ire of Democratic U.S. Senator Bernie Sanders. The U.S. vaccine maker’s Spikevax shot was developed with the help of government funding.

(Reporting by Patrick Wingrove; Editing by Bill Berkrot)