Biden Threatens to Break Patents over Drug Prices

The Biden administration said Thursday that it will attempt to strip drugmakers of patents if government officials deem their prices to be too high.

Under a plan announced Thursday, the government would claim the right to control prices on drugs developed with the help of taxpayer money. The administration claims, without evidence, that drugmakers are “gouging” consumers with high prices and that the seizure plan would lower prices.

“Today, we’re taking a very important step toward ending price gouging so you don’t have to pay more for the medicine you need,” Biden said in a video posted online on Thursday.

The controversial seizure scheme, which is sure to be challenged in court, would permit the federal government to snatch the patents for high-priced drugs developed in part with public funds. Once seized—in a process known as “march-in rights”—the government would then be able to license competitors to manufacture and sell the drugs.

The details and the legal justification for the expanded power remained vague on Thursday morning. The process of how officials will deem a drug price as too high remains unclear. White House officials have refused to name which drugs might be targeted.

The Biden administration has been in a frenzy to distract public attention away from the widely perceived failures of its management of the U.S. economy. According to several recent polls, less than a third of the public says they approve of the job President Biden has done on the economy.

Polls also suggest that inflation, which hit four-decade highs under President Biden, is seen as the number one issue facing the country for many voters. The Biden administration’s efforts to convince the public that it has succeeded in reducing inflation have fallen flat, prompting many Democrats to implore the White Hosue to drop the term “Bidenomics” from its official statements.

The patent-break plan announced Thursday would do little to reduce inflation, in part because prescription drugs have not been a major source of inflation during the post-pandemic period. The government’s index tracking retail prices of prescription drugs showed that drug prices were down 7.2 percent in October compared with a year earlier. Drug prices have been below their year-ago levels since October of 2022.  Prices have declined in four out of the last six months.

Nonetheless, the Biden administration pitched it as part of its “Bidenomics” agenda, claiming that the plan showed “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.”

The Biden administration’s proposal would grant unprecedented power to officials to use price as a factor when determining whether to implement so-called “march-in rights.” The authority to break patents developed with government money has been on the books for more than 40 years but price has not been a factor in determining their use.

March-in rights were created by a 1980 law known as the Bayh-Dole Act, which was intended to boost the private sector’s participation in government research and encourage the commercialization of products developed with government funds. The act also gave the government the authority to strip a patent if its holders were not making reasonable efforts to bring an invention to the market.

“For the first time, ever, the high price of that taxpayer-funded drug is a factor in determining that the drug is not accessible to the public on reasonable terms,” said Biden domestic policy adviser Neera Tanden, according to the Associated Press.

Critics say that expanding march-in authority so that it could be triggered by prices deemed “unreasonable” would stifle innovation in drug development and may make investors hesitant to accept government funds meant to accelerate the invention process.

From the Associated Press:

The plan could threaten future drugs, according to the pharmaceutical lobbying firm Pharmaceutical Research and Manufacturers of America, or PhRMA.Pharmaceutical companies have long relied on government research to develop new drugs. The most recent major breakthrough was the development of COVID-19 vaccines. U.S. taxpayers invested billions of dollars in the effort and were able, until recently, to access treatments and preventions for the virus without paying out-of-pocket for them.

“This would be yet another loss for American patients who rely on public-private sector collaboration to advance new treatments and cures,” PhRMA spokesperson Megan Van Etten said.

Critics of the plan say that the Biden administration knows the unprecedented expansion of the 1980 march-in authority faces an uphill battle in the courts but that it expects to reap political benefits from proposing it. It is being likened to the Biden administration’s plan to forgive student loans, which was deemed illegal by the Supreme Court.