[Ip-health] 51 members of Congress have asked the NIH to use March-In rights to rein in high drug prices

Zack Struver zack.struver at keionline.org
Mon Jan 11 09:58:45 PST 2016

51 members of Congress have asked the NIH to use March-In rights to rein in
high drug prices


This was the release from Representative Doggett's office:

<----begin quote

January 11, 2016

Leslie Tisdale, (202) 225-4865
Over 50 Members of Congress to Obama Administration:
Help End Drug Price Gouging Now

Washington—Today, over 50 members of Congress led by U.S. Congressman Lloyd
Doggett (D-TX), a senior member of the Ways and Means Committee and founder
of the “Affordable Drug Pricing Task Force,” urged the U.S. Department of
Health and Human Services (HHS) and National Institutes of Health (NIH), to
use their existing authority to bring relief to families suffering from
drug price gouging.

“When drugs are developed with taxpayer funds, the government can and
should act to bring relief from out-of-control drug pricing,” said Rep.
Doggett. “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.”

The letter explains that current law authorizes federal agencies, like the
NIH, that fund private research which results in a new drug patent, to
require the patent holder drug company to license its intellectual property
to third parties. This authority, known as “march-in rights,” was created
by a 1980 statute and exists when “action is necessary to alleviate health
and safety needs which are not being reasonably satisfied” or when the
benefits of the drug are not “available to the public on reasonable terms.”

The Affordable Drug Pricing Task Force aims to promote awareness and
collaboration on drug pricing problems crippling family budgets.


end quote----->

This is the text of the letter

<----begin quote

Secretary Sylvia Mathews Burwell
The U.S. Department of Health & Human Services
Hubert H. Humphrey Building
200 Independence Avenue, S.W.
Washington, D.C. 20201

Director Francis S. Collins
National Institutes of Health
9000 Rockville Pike
Bethesda, Maryland 20892

Dear Secretary Burwell and Director Collins,

We respectfully urge you to utilize your existing statutory authority to
respond to the soaring cost of pharmaceuticals. Under certain
circumstances, when taxpayer-funded federal research results in a new drug
patent, NIH may require the patent holder to license the federally-funded
intellectual property to third parties.

In 1980, the Bayh-Dole Act authorized federal agencies that fund private
research to retain certain rights in patented inventions, including to
assert “march-in rights,” under 35 U.S.C. § 203(a)(2), when “action is
necessary to alleviate health and safety needs which are not being
reasonably satisfied” or, as noted in 35 U.S.C. § 201(f), when the benefits
of the patented product are not “available to the public on reasonable

Since NIH has not previously offered official guidance regarding the
situations in which march-in rights would apply, we believe that reasonable
guidelines can discourage drug price gouging. We urge NIH to issue
guidelines to accomplish this goal.

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. In short,
too many drugs are not “available to the public on reasonable terms.”

High prescription drug prices are not limited to one type of treatment or
one type of disease. For example, the rapidly rising costs of specialty
drugs, like those to treat cancer, which are frequently developed with
taxpayer funds, are keeping those in need from being able to access care. A
recent report found that in 2013, the average annual price of specialty
prescription drugs was 18 times higher than the average annual price for
brand name prescription drugs, and 189 times higher than the average annual
price of generic prescription drugs. By 2020, specialty drugs will account
for only about 2% of prescriptions, but an estimated 30% of drug spending.
Over time, these rising prices could result in higher taxes and/or cuts to
public programs like Medicare and Medicaid, which are already spending $140
billion on prescription drugs annually.

We are confident reasonable guidance can be put in place to address price
gouging while ensuring that march-in rights are exercised with transparency
and fairness. We want pharmaceutical manufacturers to have the certainty of
clear guidelines that indicate when march-in rights apply. Because these
rights would only be used when wrongdoing occurs, innovation should not be
threatened. Establishing strong guidelines protects consumers while
reducing the need for having to actually exercise “march-in” rights. With
adequate guidance, pharmaceutical companies should be able to make
better-informed pricing decisions.

When declining to exercise these march-in rights in response to previous
petitions, NIH has suggested that controlling drug costs is a legislative
duty. While that is accurate, Congress legislated long ago on a bipartisan
basis in delegating authority to federal agencies such as NIH the
responsibility to address one aspect of this problem. We call upon you to
do that job. 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 consumer will pay. In 2013, for example, NIH
rejected a request to issue rules related to pricing disparities between
the United States and other high-income countries. While this may not be
the sole standard considered, it exemplifies the type of standard which
could be set.

While some experts estimate that about one-quarter of priority-reviewed
drugs—drugs deemed especially important by the FDA—could be impacted by NIH
fully exercising its march-in rights, we believe that just the announcement
of reasonable guidelines in response to price gouging would positively
influence pricing across the pharmaceutical industry. The decision how to
best use that conduit is appropriately addressed through your prompt
action. Just beginning that process will have at least a modest salutary
impact on this troubling healthcare problem.

We look forward to prompt response in bringing relief for struggling
patients and families.


Representatives Bass, Becerra, Blumenauer, Cartwright, Chu, Cicilline,
Clarke, Cleaver, Cohen, Conyers, Cummings, DeFazio, DeLauro, DeSaulnier,
Doggett, Ellison, Farr, Fattah, Hahn, Hastings, Huffman, Garamendi, Al
Green, Grijalva, Gutierrez, Kaptur, Lawrence, Lee, Lewis, Lujan Grisham,
McDermott, Moore, Napolitano, Nadler, Nolan, Norton, O’Rourke, Pingree,
Pocan, Rangel, Roybal-Allard, Ruiz, Schakowsky, Serrano, Scott, Slaughter,
Takano, Bennie Thompson, Waters, Welch, and Yarmuth

end quote------>

Zack Struver, Communications and Research Associate
Knowledge Ecology International
zack.struver at keionline.org
Twitter: @zstruver <https://twitter.com/zstruver>
Office: +1 (202) 332-2670 Cell: +1 (914) 582-1428

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