President Joe Biden speaks about protecting Social Security, Medicare and lowering prescription drug costs during a visit to the OB Johnson Park and Community Center in Hallandale Beach, Florida on November 1, 2022.
Kevin Lamarque | Reuters
The Biden administration on Thursday opened the door confiscation of patents of certain expensive drugs by pharmacists in a new impetus reduce high drug prices and promote more pharmaceutical competition.
Management disclosed a structure outlining the factors federal agencies must consider in deciding whether to use a controversial policy known as participation rightstake patents on drugs developed with taxpayer funds and share them with other pharmaceutical companies if the public cannot “reasonably” access the drugs. Doing so could lead to the development of cheaper generic alternatives, which could reduce the profits of major drug companies and lower costs for patients.
For the first time, employees can now factor in the price of a drug in the decision to infringe a patent.
It is unclear whether and how federal agencies will use opt-in rights under the new framework. Specifically, “no agency to date” has implemented the policy, which emerged under it Bayh-Dole Act of 1980a senior administration official said during a call with reporters on Wednesday.
But the administration will “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 at less cost,” said Lael Brainard, national economic White House Counsel. reporter.
The framework will be open for public comment for 60 days.
The administration’s announcement follows a almost nine months review of the federal government’s intervention rights, which was intended to inform the framework for the use of policy.
It also comes as President Joe Biden is making lowering US drug prices a key pillar of his health care agenda and 2024 re-election platform.
Political pressure has prompted health care companies to launch their own efforts to lower drug prices. CVS on Tuesday unveiled a new prescription drug pricing model that could potentially lower costs for patients at the pharmacy counter.
Nearly 3 in 10 Americans struggle to pay for the drugs they need, according to a July overview by the health policy research organization KFF. And some research suggests that US patients spend about $1,200 more per person on prescription drugs than in any other country.
However, taxpayers have spent tens billions of dollars to fund hundreds of drugs over the past decade — something the Biden administration believes could justify more government action to lower prices.
The government’s new push to use opt-in rights could ultimately have major consequences for the pharmaceutical industry, which has long argued that the policy discourages research and development of new drugs.
Activists protest the cost of prescription drugs in front of the US Department of Health and Human Services (HHS) building on October 6, 2022 in Washington, DC.
Anna Moneymaker | Getty Images
Pharmacists have argued that confiscating a drug’s patent makes that treatment vulnerable to competition, which can reduce a company’s revenue and limit how much it can reinvest in drug development.
That pushback has made the federal government reluctant to use opt-in rights in the past, which has frustrated progressives on Capitol Hill.
On Thursday, Sen. Elizabeth Warren told CNBC that the Biden administration’s new framework “takes the right approach overall, which is to use every tool in the toolbox to lower drug prices.”
“When there’s no competition in a market, then that hurts the people who need that drug,” the Massachusetts Democrat said. “It also puts a burden on taxpayers who end up paying for it through other government programs.”
He added that the rights to march have been in the law for a long time. But that power wasn’t “collected and used very aggressively,” so he’s glad to see the administration “moving in that direction.”
Meanwhile, the pharmaceutical industry’s largest lobbying group criticized the Biden administration’s push to exercise opt-in rights in a statement.
“This would be yet another loss for American patients who rely on public-private partnerships to advance new treatments and therapies,” said a spokesman for the Pharmaceutical Research and Manufacturers of America, which represents pharmaceutical companies such as Pfizer, Eli Lilly and Johnson & Johnson. “The government is sending us back to a time when government research sat on a shelf, benefiting no one.”
The White House feigned dismay at the lobby group’s stance in a post on X, formerly known as Twitter.
“Oh, no. We upset Big Pharma again,” the White House said.
And the Obama and Trump administrations had turned down requests for participation from legislators and patient advocates. The Trump administration even proposed a rule that it would prevent the government from pursuing the policy based only on the high price of a drug.
The Biden administration chose not to finalize that proposal earlier this year, according to a White House statement Thursday.
But the Biden administration has also avoided using opt-in rights until now. In March the administration denied infringing the patent of the expensive prostate cancer drug Xtandi from Astellas Pharma and Pfizer.
Pharmacists charge more than $150,000 a year for Xtandi in the U.S. before insurance and other discounts, but charge a fraction of that price in other developed countries.
The Biden administration has tried to lower drug prices in other ways, including giving Medicare the power to negotiate drug prices for the first time in the federal program’s 60-year history as part of the Inflation Reduction Act.
But Xtandi was excluded from the first 10 drugs chosen by the government for negotiations, prompting Astellas Pharma to file a lawsuit filed to stop price talks.
Also Thursday, the Biden administration unveiled efforts aimed at addressing alleged anticompetitive practices by major health care companies.
Some are targeting private equity firms, which have bought doctors’ offices, nursing homes and other health care providers. Private equity ownership of the healthcare industry has soared, with about $750 billion in deals between 2010 and 2020, according to report from the American Antitrust Institute.
The administration is concerned that business owners are “maximizing their profits at the expense of patient health and safety, while increasing costs for both patients and taxpayers,” according to the White House briefing.
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