Medical Schools Push Back on ‘March-In’ Rights Plan to Lower Drug Prices

Key stakeholders from academia and medicine are pushing back on a Biden administration proposal that would leverage “march-in rights” in an effort to rein in unreasonably priced drugs developed with the support of taxpayer dollars.

In a letter sent last week to the National Institute of Standards and Technology (NIST) — the authors of the framework — the Association of American Medical Colleges (AAMC) and five other nonprofits and university groups pushed for the withdrawal of the proposed framework, arguing that it would have a chilling effect on partnerships between research universities and private industry.

The administration’s proposed framework draws upon a never-before-used provision of the Bayh-Dole Act of 1980, which gives the government the authority, under certain circumstances, to seize control of a drug patent and license it to another company if the drug was developed with government support.

Critically, the administration’s proposed framework clarifies that a drug’s high price on its own is enough of a reason to trigger march-in rights.

The Bayh-Dole Act, as currently written, is working, the groups argued and credited its passage with decades of new inventions, including 850 new commercial products in 2022 alone.

The AAMC further argued in an individual letter to the NIST that by “enabling academic medical centers to negotiate directly with industry in licensing these inventions, Bayh-Dole has been instrumental in moving many discoveries into useful application and has made the United States the world’s leader in medical innovation.”

The proposed framework introduces “uncertainty and ambiguity” around the circumstances under which march-in rights could be used, the joint letter noted. Given that there is “no definition for the highly subjective term ‘reasonable,'” the term — in reference to pricing — is open to multiple interpretations by different agencies.

“Asking agencies to rely on this framework as guidance for their decision-making process creates an untenable expansion of factors that are beyond the scope of the statute, one that may effectively chill future partnerships between universities and the private sector due to the inability to mitigate the risk of being subject to a petition for march-in on the basis of ‘reasonable price,'” the groups wrote.

The groups also raised concerns about the potential for “corporate gaming” and “bad faith” petitions from competitors. Such inquiries can take years and significant resources to adjudicate. Even a petition that is later denied could bankrupt a licensee, the groups argued.

However, the Federal Trade Commission (FTC) and dozens of lawmakers support the proposal.

The FTC backed the new framework wholeheartedly. “In prescription drug markets where pricing is buoyed by a sponsor wielding patent rights over a government-funded invention, exercising march-in rights and enabling additional licensees to access federally funded inventions can foster competition and provide a necessary check on high drug prices that unreasonably limit public access,” the agency wrote in a February 6 letter.

Dozens of mostly Democratic lawmakers expressed their support as well. “We appreciate that the Administration has, for the first time, specified that price is a factor in determining whether a taxpayer-funded invention is accessible to the public,” more than 70 members of Congress wrote in their own letter.

“As the angel investors underwriting the risk of development, taxpayers deserve access to these products on reasonable terms, including fair pricing that accounts for the investment made,” they added.

They urged the NIST to spell out “additional considerations” to help guide determinations for when a price is unjustified, offering as just one example, “if the price in the U.S. exceeded the median price charged in comparable wealthy countries.”

“These considerations must be accompanied by a clear directive that price gouging on a taxpayer-funded product is never justified, and the availability of alternatives should not be a factor in declining to exercise march-in rights,” the lawmakers stressed.

The letter from lawmakers also requested that the framework include “an independent appeals process and timeliness standards” and that any related proceedings be open to the public with “narrow exceptions.” (The proposed guidance suggested such activities would be “closed to the public and confidential.”)

In highlighting the importance of timely decisions, the letter called out the “continued price gouging” on enzalutamide (Xtandi), a prostate cancer drug that costs Medicare and taxpayers more than $2 billion for the program’s beneficiaries in 1 year.

“A primary reason that the NIH gave for its recent rejection of a march-in petition on Xtandi was ‘the remaining patent life and the lengthy administrative process involved for a march-in proceeding,'” the lawmakers wrote.

Such concerns might have been alleviated had the agency responded more quickly to the petition when it was originally filed in 2021, they said.

HHS’s rejection of an earlier march-in petition for enzalutamide was announced on February 5 — shortly before comments closed on the framework.

“We know more must be done as too many Americans, particularly the uninsured, find these therapies to be out of reach,” HHS Secretary Xavier Becerra wrote.

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