The Price Isn’t Right: Sen. Warren’s Antidote to Costly Medicine

When I tell you the cost of many medications in America is prohibitively expensive, you likely aren’t surprised. Access to medicine and drug costs has been a major topic of debate for a long time. Most recently, U.S. politicians and pharma industry leaders have stoked the fiery debate on healthcare costs in response to the National Institute of Health’s (NIH) rejection for a petition to grant march-in rights for a prostate cancer medication called, Xtandi®. To learn more about march-in rights and the recent concern over the drug, Xtandi®, read High Drug Prices: Meet Bayh-Dole.

In the wake of the NIH’s rejection letter, the pharma industry issued a statement, allegedly “setting the record straight” on march-in rights. Meanwhile, worried Congress members issued a letter stating their concern for the NIH’s actions (and inaction!). The spring and summer months of 2023 have seen a remarkable amount of promises to clarify march-in rights paired with pleas by advocates of strong IP rights to use other tools within the government’s power to lower drug costs— let’s hope for action on these issues this fall and winter.   But, before we get into the details, let’s start with some basics.

March-in Rights Denied

The NIH rejected the petition to exercise march-in rights for Xtandi®’s because Xtandi® was readily available for purchase on the market. Although Xtandi® was available for purchase, its high price prohibited a large portion of the American population from purchasing the drug. The NIH’s rejection letter provided little substantive reasoning for their rejection, besides noting that Xtandi® was already available on the market. Consumer advocates demanded more than the vague language, asking for clearer standards for granting march-in rights. The U.S. Department of Health and Human Services (HHS) and Department of Commerce (DOC) agreed to their demands and proposed to reevaluate march-in rights, and to provide a better understanding of the criteria for judging a march-in rights petition.  This agreement emerged as the Interagency Working Group for Bayh-Dole.

Photo by Çaglar Oskay licensed via Unsplash

Sen. Elizabeth Warren Diagnoses the Problem

Since creating the working group in March of this year, the HHS and DOC has failed to address peoples’ concerns, specifically those about the issue of drug prices. In June, U.S. Senators Elizabeth Warren and Angus King and U.S. Representative Lloyd Doggett said enough is enough, and sent a letter to the HHS and DOC. This letter sought to remind the public that the HHS and DOC has made a hollow promise– by creating the working group, but not proving it any power to provide clarity on march-in rights.

Most notably, Sen. Warren and her colleagues submitted their thoughts on prohibitively high drug prices by critiquing the NIH’s lackluster definition of “reasonable terms.” Remember, if a medication enters market without “reasonable terms” the government may exercise its march-in rights.  Sen. Warren noted that Xtandi®, although developed with taxpayer dollars, has an exponentially higher price in the United States than it does in other countries. The average price per capsule in the United States is approximately $100, while the average cost per capsule in Canada and in Europe is around $30. If there ever was an unreasonable presence in the market requiring march-in rights, Xtandi® is it! Prohibitively high medication that costs signifcantly more to Americans than it does to patients in other countries is certainly not reasonable.

Sen. Warren suggested a formula to determine if a drug’s cost is a “reasonable term.” The formula boils down to this: if a list price of a prescription drug is not the lowest available in any of the countries with the highest GDPs and per capita income at least half that of the US, then the price is not a “reasonable term.” Concrete determinations on what price is reasonable will provide pharma companies with an incentive to not charge outrageous prices for their drugs.

Sen. Warren suggested other parameters for the scope and practice of the Working Group including:

  1. Incorporating review of the paid-up licenses provisions in the Bayh-Dole Act,
  2. Ensuring a robust appeals process for march-in right petitioners,
  3. Providing a list of drugs developed with taxpayer dollars,
  4. Ensuring companies disclose if they received government funding for their inventions,
  5. Ensuring Working Group members do not have conflicts of interest,
  6. Ensuring the Work Group is comprised of members from various administrative agencies, and
  7. Ensuring that any Working Group proceedings are open to the public and not just pharma companies are their advocates.

Whether or not HHS and DOC agree with these enumerated responsibilities for the working group, they can agree that a more unambiguous platform or set of objectives is necessary for the working group to… work.

Sen. Warren urged HHS to follow through on their thus far empty promises. HHS claimed they would organize a workshop before the end of 2023 to define the scope, goals, and procedures of the working group. Sen. Warren proposed the working group have a workshop before September 1, 2023 and have a definitive action plan before December 31, 2023.  September 1st has now passed and the HHS and DOC have yet to answer Sen. Warren’s letter.

March-In Forward

Sen. Warren’s letter set the stage for using the Bayh-Dole Act for the benefit of Americans needing affordable medicine. The future of the Bayh-Dole Act has real-world consequences and could be the difference between life or death for people experiencing poor health and poverty. As we enter the final months of 2023, I hope the NIH, HHS, and DOC acknowledge the concerns voiced by Sen. Warren and that the working group uses its resources to provide greater access to medicine for Americans. The road to greater access to affordable medicine will certainly not be an easy one, especially in light of the recent letter sent to Congress by IP leaders against march-in rights and another provision that others have argued the government case use to help reduce drug costs. Nevertheless, advocates like Sen. Warren remind us that affordable medicine is possible.

Bailey Hammond
Associate Blogger
Loyola School of Law, Class of 2025