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By Nathaniel Weixel
Jan. 11 — Congressional outrage over rising drug prices continued Jan. 11 as more than 50 House Democrats called on the NIH to use its authority to license certain drug company patents to third parties.
In a letter spearheaded by Rep. Lloyd Doggett (D-Texas), the lawmakers said the National Institutes of Health has a congressional mandate to use so-called march-in rights for licensing patents that are based on government funded research. The members in the letter said the NIH should issue guidelines on when march-in rights would apply.
“Reasonable guidelines can discourage price gouging,” the letter said.
But the Biotechnology Innovation Organization (BIO) said the NIH's resources should be better spent elsewhere, and march-in authority wouldn't be in the best interests of patients.
The letter was sent by members of the Affordable Drug Pricing Task Force, formed by House Democrats in November in response to the growing controversy over prescription drug pricing from companies like Valeant Pharmaceuticals International Inc. and Turing Pharmaceuticals AG. It was also sent to the Department of Health and Human Services.
The lawmakers said the NIH has the authority to exercise march-in rights under a 1980 law. According to the lawmakers, the law empowers a federal agency funding private research to “march in” and issue patent licenses on its own when the holder of a patent that resulted from the research is not “reasonably” satisfying U.S. health or safety needs, or when the benefits of the patented product are “not available to the public on reasonable terms.”
“While NIH has appropriately referred to march-in rights as an ‘extraordinary remedy,’ too many families and providers are facing an extraordinary challenge from unreasonably priced pharmaceuticals,” the letter said. “In short, too many drugs are not ‘available to the public on reasonable terms.'”
“When drugs are developed with taxpayer funds, the government can and should act to bring relief from out-of-control drug pricing,” Doggett said in a statement. “Soaring drug costs are a widespread problem, not limited to one disease or treatment. There is a difference between earning a profit and profiteering. The administration should use every tool it has to rein in the practice of pricing a drug at whatever the sick, suffering, or dying will pay.”
According to the lawmakers, specialty drugs will account for only 2 percent of all prescriptions by 2020, but 30 percent of all federal drug spending. Specialty drugs are generally used to treat complex, chronic health conditions, such as rheumatoid arthritis, multiple sclerosis and cancer.
The lawmakers said march-in rights should only be used “when wrongdoing occurs” so “innovation should not be threatened.”
Lawmakers also criticized the NIH for declining to act in past situations where march-in rights were called for.
“The failure to act in the past has undoubtedly sent an unfortunate signal that prices for federally funded inventions can be set as high as a sick or dying customer will pay,” the lawmakers wrote.
The NIH told Bloomberg BNA Jan. 11 that it would respond directly to the lawmakers. The Pharmaceutical Research and Manufacturers of America declined to comment.
Trade group BIO said if the NIH acted, it would “disrupt the biopharmaceutical innovation ecosystem with intrusive government intervention.” Jeanne Haggerty, senior vice president of federal government relations, noted in a statement that NIH Director Francis Collins has in the past said march-in rights aren't an appropriate means of controlling prices of drugs broadly available to physicians and patients.
“Forcing the NIH to promulgate guidelines to police drug pricing by exercising its march-in authority would require NIH to divert resources into tasks it is not designed to do, and would also create tremendous uncertainty in the technology transfer process. This would significantly discourage private investment into federally federally-funded inventions, and fewer government inventions would become real-life products,” Haggerty said.
A representative of the Pharmaceutical Research and Manufacturers of America said that the “issues raised in the letter have been addressed before and NIH has concluded that the march-in rights approach would be inappropriate way to address health care costs.”
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