Congressional lawmakers strike back at Biden admin's 'march-in' proposal to corral drug costs

As the Biden administration’s exploration of “march-in rights" draws support from powerful entities like the Federal Trade Commission (FTC), a group of lawmakers on both sides of the aisle have warned the approach could “hamstring” U.S. innovation.

This week, 28 Democratic and Republican members of Congress sent a letter to President Joe Biden cautioning against the use of march-in rights under the Bayh-Dole Act of 1980—a law they referred to as the “foundation of public-private partnerships” in the U.S.

March-in rights on government-funded research have long been debated as a potential measure to reduce drug prices, though they’ve never been used in practice.

The authority, carved out in the Bayh-Dole Act, permits the government to grant patent licenses to other parties—or obtain the licenses for themselves—if the patent owner’s research and development process was fueled by taxpayer funding and is not readily available to the public.

Late last year, the Biden administration declared it had the power to take back patents of certain high-priced drugs, but it stopped short of endorsing the widespread use of march-in rights. Instead, the government laid out a framework on when the process could be deployed.

The Department of Commerce’s National Institute of Standards and Technology (NIST) published the draft march-in framework for public comment Dec. 8, 2023.

Despite attempts to use march-in rights to fight high drug prices in the past, the authors of the Bayh-Dole Act have previously argued that the plan misinterprets the law, which would need to be amended to include “reasonable price” as a triggering factor for the march-in process to occur, the lawmakers argued in their letter.

What’s more, the lawmakers contend march-in rights wouldn’t be effective in the first place. Of the 361 medications approved by the FDA between 2011 and 2020, just five—or fewer than 2%—could be subject to full march-in rights because they were developed with government funding, according to the lawmakers.

NIST’s draft framework would also have “serious unintended consequences,” subjecting companies across industries to pricing challenges by “rival businesses and even our foreign competitors and adversaries,” they wrote.

Further, the loss of control over patents could deter private investment needed to commercialize products developed with federally funded research, the lawmakers suggested.

The Biden administration has already spurned march-in rights once before.

Last March, the National Institutes of Health rejected a petition to exercise march-in authority around Pfizer and Astellas’ pricey prostate cancer med Xtandi, echoing a similar decision made back in 2016.

Xtandi was developed at the University of California, Los Angeles (UCLA) thanks to a sizable investment from the Pentagon. UCLA sold its rights to the med in 2016.

Meanwhile, NIST’s draft guidance has already won some powerful backers. Earlier this month, the FTC said it supports an “expansive and flexible” approach to march-in rights in a comment on the Commerce Department’s guidance.

The argument over march-in rights comes at a critical time for drug pricing in the U.S., thanks to the passage of the Inflation Reduction Act (IRA) in 2022. The law, which is being challenged by drugmakers and trade groups alike in court, will allow Medicare to negotiate prices for certain drugs starting in 2026, among other measures.

Besides the IRA, the Biden administration has been pushing other measures to fight high drug costs, including the FTC's recent patent crackdown.