December 7, 2023, President Biden introduced new actions to advertise competitors in well being care and to decrease prescription drug prices. Of explicit 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, out there 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 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 Steering lists quite a few elements 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 value of pharmaceuticals:

• “Has the contractor or licensee made the product out there solely to a slender set of shoppers or clients 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 improve 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 out there to the general public?”

It’s also fascinating to notice that the Draft Steering seems to acknowledge that the FDA’s regulatory exclusivity will not be topic to the “march-in” rights. The Draft Steering asks companies to contemplate if “the services or products [is] topic to regulatory exclusivity, equivalent to these offered 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 present open to public remark for 60 days. At Sheppard Mullin we’re carefully monitoring the rulemaking course of, and can present our purchasers with probably the most up-to-date evaluation and recommendation.