March-In Rights: A Brief History
The development of future COVID-19 vaccines and treatments has given rise to new pricing and supply chain concerns for the pharmaceutical industry, and some governments are considering solutions that would target the intellectual property of these treatments to ensure widespread affordability.
In the United States, there is a long – if sparse – history of breaking (or attempting to break) pharmaceutical company patents:
- 1910: The U.S. government was actually first given the power to sidestep drug patents and issue compulsory licenses to generic makers through a “little-known” law – now codified as UCS 1498 — that gave “government immunity from patent claims in cases where infringement serves the public good,” while also allowing the patent holder to get “reasonable compensation.”
- 1959: Pfizer unsuccessfully fought the Department of Defense over a purchase of antibiotics from an Italian company; the government used USC 1498 as justification.
- 1980: The Bayh-Dole Act passed. The legislation included “march-in” rights, allowing a government agency that funded private research the ability to secure a compulsory license to “alleviate health and safety needs which are not being reasonably satisfied.”
- 1995: The NIH removed “reasonable pricing” clauses from research and development agreements with manufacturers, who had been reluctant to agree to pricing terms.
- 2001: The anthrax scare led Bayer and the federal government to reach an agreement allowing the government to purchase Cipro, an antibiotic used to combat anthrax, at a fraction of its original cost. After Bayer initially refused to lower the price, the federal government threatened to buy generic alternatives of the drug under USC 1498.
- 2004: The NIH – in response to a petition seeking to overturn an Abbott HIV-drug patent – stated that “the extraordinary remedy of march-in is not an appropriate means of controlling prices. The issue of drug pricing has global implications and, thus, is appropriately left for Congress to address legislatively.” The NIH also denied a petition seeking to break the patent on Pfizer’s Xalatan.
- 2013: The NIH denied a second petition requesting the patent on Abbvie’s Norvir be overturned due to high price differences between the U.S. and other countries.
- 2016: In congressional testimony, NIH Director Francis Collins questioned the negative consequences of the Bayh-Dole Act and expressed concerns over using NIH-funded patent to curb high drug prices. A petition that year asking the government to march-in on the Xtandi cancer drug was denied.
- 2019: Several former Democratic presidential candidates embraced the idea during the 2020 campaigns as part of their strategies to lower drug costs.