December 7, 2023, President Biden introduced new actions to advertise competitors in well being care and to decrease prescription drug prices. Of specific be aware is a newly unveiled framework for deciding whether or not the Authorities might train “march-in” rights and take a pharmaceutical firm’s drug patents developed with federal funds and share them with different firms. See Draft Interagency Steering Framework for Contemplating the Train of March-In Rights, obtainable right here (“Draft Steering”).

When an invention is made with federal help, the federal authorities might train its “march-in” rights to license the patented invention to a different celebration, even when the patent proprietor disagrees. The controversial “march-in” rights have not often, if ever, been exercised since its preliminary creation by the Bayh-Dole Act of 1980.

The newly introduced Draft Steering lists quite a few elements and issues for evaluating whether or not the Authorities ought to train the “march in” rights. A lot of them seem to direct authorities businesses to think about particularly the value of pharmaceuticals:

• “Has the contractor or licensee made the product obtainable solely to a slim set of shoppers or prospects due to excessive pricing or different extenuating elements?”
• “Is the contractor or the licensee exploiting a well being or security want so as to set a product worth that’s excessive and unjustified given the totality of circumstances?”
• “[H]because the contractor or licensee applied a sudden, steep worth enhance in response to a catastrophe that’s placing folks’s well being in danger?”
• “At what worth would one other licensee(s) be capable to make the product obtainable to the general public?”

Additionally it is attention-grabbing to notice that the Draft Steering seems to acknowledge that the FDA’s regulatory exclusivity is just not topic to the “march-in” rights. The Draft Steering asks businesses to think about if “the services or products [is] topic to regulatory exclusivity, corresponding to these supplied by the FDA,” and “how a lot time stays within the interval of exclusivity.”

Pharmaceutical Analysis and Producers of America (PhRMA) warns that misuse of “march-in” rights would chill innovation and undermine collaboration between the private and non-private sectors, and that promising new applied sciences would sit on the shelf benefitting nobody. See right here.

The Draft Steering is at the moment open to public remark for 60 days. At Sheppard Mullin we’re intently monitoring the rulemaking course of, and can present our shoppers with essentially the most up-to-date evaluation and recommendation.