Democrats Call on Administration to Enforce “Rights to Walk” to Combat High Drug Prices

A trio of lawmakers who speak as Democrats are calling on the Biden administration to strengthen and finalize a federal rule using the government’s legal authority to seize taxpayer-funded patents in order to combat high drug prices, despite Republicans arguing that the Recent Supreme Court decisions supersede such powers.

Representative Lloyd Doggett (D-Texas) and Senators Angus King (I-Maine) and Elizabeth Warren (D-Mass.) signed a letter to Secretary of Health and Human Services (HHS) Xavier Becerra and Secretary of Commerce , Gina Raimondo, urging them to quickly finalize guidance on exercising federal “rights of entry.”

The Biden administration last year launched a framework for exercising its marching rights granted under the Bayh-Dole Act of 1980. Marching rights have never been exercised before, but the administration warned last year that it would make use of these authorities if pharmaceutical companies do not sell their products at reasonable prices.

“We write to urge you to carry out the will of Congress, as specified in the Bayh-Dole Act, by strengthening and quickly finalizing the Draft Interagency Guidance Framework for Considering the Exercise of Marching Rights,” the lawmakers wrote. “Specifically, we urge you to follow the text and legislative history of the statute, which clearly authorizes specialized federal agencies to consider price as a factor in determining whether a given invention is available to the public on reasonable terms.

Under Bayh-Dole, the federal government has certain rights to any products produced through a federally funded public-private partnership. The corresponding federal agency that provided the funding for such a product has the right to compel companies to provide a “non-exclusive, partially exclusive, or exclusive” license to a “responsible applicant.”

If the company refuses, the government itself may grant the license.

However, after the Supreme Court struck down the Chevron doctrine in June, Republicans called for the authority of federal agencies to be reexamined and redistributed. Chevron was created by a 1984 Supreme Court decision, providing federal agencies with the freedom to interpret ambiguous legislation and holding that federal courts should defer to those agencies’ interpretations.

Senator Bill Cassidy (R-La.), ranking member of the Senate Health, Education, Labor and Pensions Committee, wrote to Becerra shortly after this ruling to challenge some of HHS’s interpretations, including its approach to marching rights.

“HHS has been an active participant in an interagency working group led by the National Institute of Standards and Technology that seeks to reinterpret the Bayh-Dole Act criteria for the use of marching rights to apply to drug pricing,” Cassidy wrote, citing this as “another egregious example” of “unfettered agency power.”

Warren, King and Doggett argued that Republicans are trying to “radically and incorrectly broaden the scope” of the Supreme Court ruling. They noted that the court’s decision recognized that the “unequivocal meaning of a statute may well be that the agency is authorized to exercise a certain degree of discretion.”

“The Bayh-Dole Act is replete with clear and lawful delegations of regulatory authority. Specifically, this law delegates discretionary authority to its agencies to ‘walk in’ and recover a patent covered by the Act, to establish recovery procedures through rulemaking, and to determine whether legal criteria apply to a specific scenario,” they wrote.

Under the Bayh-Dole Act, a federal agency may issue its own license for a taxpayer-funded product if four criteria are met: the current exclusive licensee has not made or is not expected to make “practical application” of the invention, it is necessary to “alleviate health or safety needs,” this is necessary to meet “public use requirements” under federal regulations and the product is not being “substantially manufactured” in the U.S.

Democratic lawmakers wrote to Becerra and Raimondo that their agencies held the authority to relicense a drug patent if the drug “is not available to the public on reasonable terms.”

“We urge you not to be deterred by congressional Republicans who seek to restrict your authority to reduce drug costs for Americans, and we reiterate the need for your agencies to immediately strengthen and finalize the proposed guidance issued under this statute so that Americans can receive the benefits Congress intended,” they wrote.

The Hill reached out to HHS and the Department of Commerce for a response.

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