March-In Rights Alone Won’t Solve Our Drug Pricing Problems

By Rachel Sachs

On Monday, a group of over 50 members of Congress sent a letter urging the Department of Health and Human Services (HHS) and the National Institutes of Health (NIH) to use a little-known statutory provision to take action against high drug prices.  Their goal is laudable, and HHS and the NIH should certainly offer guidance in this area – but the existing law offers only a partial solution to the problem as the legislators describe it.

The members of Congress wrote to remind HHS and the NIH of a provision in the 1980 Bayh-Dole Act giving the government “march-in rights” to patents resulting from government-funded research.  More specifically, the statute spells out a range of conditions under which the government may require a patentholder to grant licenses on reasonable terms to others to practice the patent.  The government may require such a license where “action is necessary to alleviate health or safety needs which are not reasonably satisfied,” 35 U.S.C. § 203(a)(2), or where the benefits of the invention are not being made “available to the public on reasonable terms,” 35 U.S.C. § 201(f).  The legislators argue that many drugs today violate these conditions, as even many insured Americans cannot access prescription drugs without incurring significant financial harm.

Although the “march-in rights” provision has existed in the statute since 1980, it has never been exercised by the federal government, even when it has been specifically asked.  And some of these cases have been paradigmatic examples where “health or safety needs” are not being satisfied.  A December 2015 study notes that in Bayh-Dole’s history, there have only been five petitions requesting that the NIH exercise its march-in rights.  Three of those requests were based on high prices for drugs for HIV/AIDS and glaucoma, and one was based on a persistent drug shortage which may have caused the deaths of people with Fabry disease, a rare condition.  (The fifth petition involved a medical device under patent litigation at the time.)  The NIH denied each request.  Some scholars argued that if the NIH denied the Fabry disease petition, where Genzyme’s drug shortages lasted for multiple years and caused great suffering, possibly including death, there may be no circumstances under which the NIH would grant such a petition.

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Medicaid and Access to Health Care Services

Centers for Medicare and Medicaid Services Washington Headquarters

Centers for Medicare and Medicaid Services Washington Headquarters, Hubert H. Humphrey Building

Last week Health Affairs released a new article that surveyed low-income individuals in Kentucky and Arkansas, two states that expanded Medicaid coverage to all people under 138 percent of the federal poverty level in 2014. They survey, led by Harvard professors, Robert Blendon and Ben Sommers, found that people in these states reported lower rates of problems paying medical bills and forgoing care or prescriptions due to cost. Additionally, the number of people that reported seeing a physician for a checkup and management of chronic conditions increased in Kentucky and Arkansas. All of these responses are indicators of having access to health care.

The results seen in Kentucky and Arkansas are in stark contrast to the survey results in Texas, which has elected not to expand Medicaid coverage. Texas has seen no change in an individual’s ability to pay for medical services and an increase in people forgoing health care coverage. This comparison indicates that expanded Medicaid coverage improves a person’s access to medical care.

But this isn’t the first time Medicaid has been shown to score well in measures of access to health care services for low-income individuals. Contrary to the rhetoric of politicians and the logic that Medicaid’s low reimbursement rates mean people have fewer choices of physicians, evidence to date has suggested that some of these arguments may be exaggerated.

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