More than 50 House lawmakers are clamoring for a new strategy to combat high drug prices: take away a drug company’s monopoly on a new product.
The lawmakers wrote to the Obama administration calling for federal agencies to use existing authority to force drug makers to license their products to a third party. The letter released Monday aims to increase market competition and comes at a time when Congress has shown little appetite to tackle high prices.
The letter, comprised by mainly Democrats, focuses on the licensing of patents that resulted from federally funded research projects such as clinical trials for a new drug. The National Institutes of Health is a big contributor to such medical research.
A 1980 law authorized federal agencies to retain so-called “march-in” rights to certain patented products. The rare move is only to be used when it is “necessary to alleviate health and safety needs which are not being reasonably satisfied,” according to the 1980 Bayh-Dole Act.
“While NIH has appropriately referred to march-in rights as an ‘extraordinary remedy,’ too many families and providers are facing an extraordinary challenge from unreasonably priced pharmaceuticals,” according to the letter, which was led by Rep. Lloyd Doggett, D-Texas.
NIH has rejected five previous applications to use march-in rights, the last of which was in 2013 for a device marketed by AbbVie.
The letter calls for NIH to publish guidelines on how march-in rights would be used to address price gouging.
Lawmakers say the rights would be used only “when wrongdoing occurs,” and thus wouldn’t threaten pharmaceutical innovation. But it is not clear what the threshold would be for “wrongdoing.”
“With adequate guidance, pharmaceutical companies should be able to make better-informed pricing decisions,” the letter said.
Liberal advocates cheered the idea.
“If a drug company price-gouges, taxpayers should not have to pay twice — once for the research and again for the excessive price,” said the left-leaning Center for American Progress. “In such a case, it’s time to unleash market competition by allowing other companies to market the drug.”
Republicans have called for other means to increase competition, including dealing with a backlog of thousands of generic drug applications before the Food and Drug Administration.
Several polls have shown that the public is more concerned with high drug prices, but a remedy isn’t immediately clear.
Congress has taken some measures to combat high prices, such as requiring rebates for generic drugs reimbursed by Medicaid, but stopped short of wholesale reforms.
