[Ip-health] 'Government Patent Use': A Legal Approach to Reducing Drug Spending

Jamie Love james.love at keionline.org
Tue May 3 13:29:50 PDT 2016

Our own take on 28 USC 1498 is that it can be useful, but it is not
necessarily well suited for dealing with drug patent cases, given the case
law on compensation to patent holders, which includes uncertainty on what
can be big ticket items.

If 28 USC 1498 is what you have to work with, you use it.  Al Engelberg and
others proposed this in 2001 for Ciprofloxcin, and we supported that effort
then.  (http://www.cptech.org/ip/health/cl/cipro/).  1498 was also used for
drugs earlier by DoD.

When Bernie Sanders proposed that the Department of Veterans Affairs use
1498 for HCV drugs, the issue of compensation to Gilead was a concern.
Sanders offered a still to be considered legislative reform that would have
fixed this.    Zack Struver did an informative video about the issue here:

On Tue, May 3, 2016 at 8:04 PM, Kapczynski, Amy <amy.kapczynski at yale.edu>

> Aaron Kesselheim and I just published this in Health Affairs:
> http://content.healthaffairs.org/content/35/5/791.full
> Abstract:
> The high cost of patent-protected brand-name drugs can strain budgets and
> curb the widespread use of new medicines. An example is the case of
> direct-acting antiviral drugs for the treatment of hepatitis C. While
> prices for these drugs have come down in recent months, they still create
> barriers to treatment. Additionally, prescribing restrictions imposed by
> insurers put patients at increased risk of medical complications and
> contribute to transmission of the hepatitis C virus. We propose that the
> federal government invoke its power under an existing “government patent
> use” law to reduce excessive prices for important patent-protected
> medicines. Using this law would permit the government to procure generic
> versions of patented drugs and in exchange pay the patent-holding companies
> reasonable royalties to compensate them for research and development. This
> would allow patients in federal programs, and perhaps beyond, to be treated
> with inexpensive generic medicines according to clinical need—meaning that
> many more patients could be reached for no more, and perhaps far less,
> money than is currently spent. Another benefit would be a reduction in the
> opportunity for companies to extract monopoly profits that far exceed their
> risk-adjusted costs of research and development.
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James Love.  Knowledge Ecology International
KEI DC tel: +1.202.332.2670, US Mobile: +1.202.361.3040, Geneva Mobile:
+41.76.413.6584, twitter.com/jamie_love

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