NIH asked to fight price gouging by overriding drug patents
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A group of 50 congressional lawmakers wants the Obama administration to develop guidelines that would require drug makers to license their patents to others in a bid to end “price gouging.”

In their letter, they argue that the National Institutes of Health has the ability to issue so-called march-in rights, which refer to overriding a patent. Under federal law, this allows an agency that funds private research to require a drug maker to license its patent to another party in order to “alleviate health and safety needs which are not being reasonably satisfied” or when the benefits of a drug are not available on “reasonable terms.”

In urging the administration to act, the lawmakers argue that “reasonable guidelines can discourage price gouging.” The letter was released on Monday by the Affordable Drug Pricing Task Force, which was formed by several members of Congress last year in response to escalating controversy over the price of prescription medicines. It was also sent to the US Department of Health and Human Services.

Last year, prices for brand-named medicines rose 14.77 percent, and the price tag for specialty drugs increased 9.2 percent. Meanwhile, generic drug prices rose 2.9 percent, according to figures released today by Truveris, a market research firm that tracks pharmaceutical pricing.

About three-quarters of Americans believe the prices of brand-name prescription drugs are unreasonable, while 1 in 4 expressed that view about generics, according to a recent poll by STAT and the Harvard T.H. Chan School of Public Health.

The survey was conducted shortly after Turing Pharmaceuticals, which was run by Martin Shkreli, raised the price of a drug used by people with AIDS from $13.50 to $750 a pill. The drug maker raised the price shortly after buying the product from another company, and then took steps to thwart generic competition to the medicine, which is used to treat a life-threatening parasitic infection.

In explaining their reasoning, the lawmakers emphasized that march-in rights should only be used when “wrongdoing occurs” and that “innovation should not be threatened.” By issuing guidelines, they argue the NIH would help drug makers make “better-informed pricing decisions.”

The lawmakers maintain that as many as one-quarter of the medicines given a priority review by the Food and Drug Administration could be affected. Priority review is granted for drugs that are expected to provide a significant improvement in safety and effectiveness.

The lawmakers also take the NIH to task for failing to take this step previously, which sent “an unfortunate signal that that prices for federally funded inventions can be set as high as a sick or dying consumer is willing to pay.”

We asked the NIH for comment and will update you accordingly.

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