December 7, 2023, President Biden introduced new actions to advertise competitors in well being care and to decrease prescription drug prices. Of specific observe 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 Steerage Framework for Contemplating the Train of March-In Rights, obtainable right here (“Draft Steerage”).

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 get together, even when the patent proprietor disagrees. The controversial “march-in” rights have hardly ever, if ever, been exercised since its preliminary creation by the Bayh-Dole Act of 1980.

The newly introduced Draft Steerage lists quite a few components and concerns for evaluating whether or not the Authorities ought to train the “march in” rights. Lots of them seem to direct authorities companies to contemplate particularly the worth of pharmaceuticals:

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

It’s also attention-grabbing to notice that the Draft Steerage seems to acknowledge that the FDA’s regulatory exclusivity will not be topic to the “march-in” rights. The Draft Steerage asks companies to contemplate if “the services or products [is] topic to regulatory exclusivity, akin 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 Steerage 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 probably the most up-to-date evaluation and recommendation.