The federal government has several mechanisms at its disposal to break up drug patents, and many presidential contenders have pledged that if elected, they will use them, while also pushing to create new ones.
Growing public concern about the cost of prescription drugs appears to have emboldened Democratic candidates to consider taking dramatic steps that public health advocates have called for in the past but that have been viewed as political nonstarters.
"It is beyond my comprehension that today in United States, people are dying because they cannot afford their medication," Sen. Bernie Sanders, I-Vt., said in a statement Nov. 15. "The greed of the pharmaceutical industry has gone unchecked for too long."
Sanders' statement came as he and two other presidential contenders, Sens. Cory Booker, D-N.J., and Kamala Harris, D-Calif., joined forces to introduce one of the most wide-ranging proposals yet to rescind drug patents in order to control prices. The Prescription Drug Affordability and Access Act would create an independent agency to review drug prices and set what it considers an appropriate list price for all drugs.
If companies refuse to sell their products at the set price, the agency, known as the Bureau of Prescription Drug Affordability and Access, would have the authority to void their patents and authorize other companies to use them to make and sell their own cheaper versions of drugs.
"We need systemic change that will meaningfully address the exorbitant, rising cost of prescription drugs and put the focus back on patients, not profits," Booker said in a statement, calling it "downright shameful that people have to choose between taking their medicine or paying for other basic necessities."
Harris said the bill will "crack down on pharmaceutical industry greed and lower the price of prescription drugs" because "for too long, drug companies have been free to charge exorbitant prices for lifesaving medicine."
The trio's plan for an agency dedicated to seizing patents on pharmaceuticals viewed as excessively priced would be a new step, but they and their fellow candidates have made other statements this year pledging to use the government's existing powers to take similar actions.
One of those powers, in the 1980 Bayh-Dole Act, permits the government to "march in" under certain circumstances and require the owner of patents created with the help of federal funding to grant a license to others, essentially seizing the patent and allowing it to be used by generics makers.
March-in rights can be exercised when "health or safety needs" are not being "reasonably satisfied," and public health advocates have frequently urged the government to use them to lower drug prices. Every request to date has been denied, but many Democratic contenders have signaled they are open to bucking that trend.
The government has another mechanism at its disposal, a part of federal law known as Section 1498, which allows it to make or use an invention without the patent owner's permission if it gives the owner "reasonable" compensation. The patent does not need to be the result of government-funded research for that tactic to be used.
The government has not done that as a way of obtaining less-expensive drugs since the 1960s and '70s, but it could happen again if some of the 2020 candidates get their way.
A spokesperson for Sen. Elizabeth Warren, D-Mass., said earlier this year that "as president, Elizabeth is prepared to use authority under Bayh-Dole to assert 'march-in-rights' when a manufacturer has made clear that they have no intent to take effective steps to make the drug more accessible or there is an obvious health need."
Law360 contacted 10 Democratic campaigns for further comment on their candidates' plans for drug patents, and only one current candidate, entrepreneur Andrew Yang, responded. The statements in this story come from the other candidates' websites or public comments.
Yang's campaign said that as president, he would "allow for forced licensing of medications if companies can't come to a reasonable agreement with the federal government on cost in line with international prices."
The campaign website for South Bend, Indiana, Mayor Pete Buttigeig says he would use "the government's 'eminent domain' rights to tame high drug prices." The site says "patents are a privilege" and that pharmaceutical companies "found abusing that privilege through irresponsible pricing should face real consequences."
The government has the authority to acquire patents from drugmakers in some circumstances, the site says, and when "worst offender" companies harm patients by making drugs unaffordable, Buttigeig "will judiciously exercise these rights to take away patents."
It gives specific situations where he would consider taking action, including when companies rebuff attempts at direct negotiation or in cases of natural disasters or national public health emergencies.
Before introducing the drug-pricing bill with Booker and Sanders, Harris said earlier this year that she would exercise the government's march-in rights on drugs based on taxpayer-funded research and development. She specifically cited the example of Gilead Sciences' HIV prevention drug Truvada, which can cost $20,000 a year in the U.S., and which the government says is based in part on federally funded research.
"Harris will issue official guidelines for using 'march-in' rights and other intellectual property laws that incorporate considerations of access, safety, affordability, and innovation — and she'll invoke the authority to save lives and hold pharmaceutical companies accountable," her campaign website says.
The site criticizes the Trump administration for not using march-in rights to lower the cost of Truvada. While that hasn't happened, the administration's U.S. Department of Health and Human Services sued Gilead this month, alleging that Truvada infringes government patents. That move is seen as a bid to force a settlement that would reduce the cost of the drug or make it more widely available.
Harris' co-sponsors on the new bill have also previously talked about seizing drug patents. Booker's website has a brief section saying that he plans to "take patents away from drug companies that sell the same medication for less in other countries." Sanders pledged in a statement earlier this year to use march-in rights to break drug patents and license them to generics makers.
"The greed and corruption of the pharmaceutical industry is killing Americans," he said. "When I am president, starting on my first day in office, that greed and corruption will come to an end."
Former Vice President Joe Biden does not mention seizing drug patents on his campaign website, but it does say branded drug companies use "strategies to help them delay the entrance of a generic into the market even after the patent has expired" and that Biden supports "numerous proposals to accelerate the development of safe generics."
The campaign website for Sen. Amy Klobuchar, D-Minn., also does not mention government seizure of patents as a way to control drug prices. However, she has sponsored other patent-related bills aimed at drug prices, including a measure that would outlaw most allegedly anti-competitive "pay-for-delay" deals that end patent suits over generic drugs.
Former Housing and Urban Development Secretary Julián Castro says on his campaign website only that he will "reform intellectual property laws to promote generic drugs."
One candidate who has left the race also endorsed the concept of seizing patents to control drug prices. A spokesperson for the campaign of former Rep. Beto O'Rourke, D-Texas, told Law360 before he dropped out Nov. 1 that if a drugmaker "refuses to set a reasonable price," he would respond by "giving the license to a different manufacturer, and compensating the patent holder for research and risk."
--Editing by Kelly Duncan and Brian Baresch.
For a reprint of this article, please contact reprints@law360.com.
