In Short:

This cross-sectional study found that, although Bayh-Dole march-in rights could remove patent barriers to generic entry for a few drugs, their overall effect would be limited.

Abstract

In 2023, as part of a suite of initiatives to lower pharmaceutical expenditures, the Biden-Harris Administration released a proposed framework for exercising government rights in taxpayer-funded drugs. In particular, if a drug’s price makes it inaccessible, the framework would allow agencies to exercise march-in rights (effectively granting compulsory licenses for those patents to generic drug makers) on public-sector patents. This proposal is the latest development in long-standing efforts to use march-in rights to improve access to medicines.

We examine the feasibility of using march-in rights to systemically lower drug prices by removing patent barriers to competition using data from the Food and Drug Administration (FDA) Orange Book. We provide separate analyses for (1) NMEs approved by the FDA from 1985 to 2022, (2) the broader set of all new drug applications (NDAs) with patents in the Orange Book from 1985 to 2023, and (3) the subset of NDAs with patents listed in the October 2023 Orange Book. Compared with previous research on the government’s role in pharmaceutical innovation, we analyzed a broader array of drugs using more comprehensive data sources, we distinguished between drugs with any public-sector or all public-sector patents, and we provide separate analyses that excluded public-sector patents covered by the Stevenson-Wydler Act (and thus not subject to march-in rights) rather than the Bayh-Dole Act.

About the author

Bhaven Sampat

Professor, School of Government and Policy and Carey Business School

Bhaven N. Sampat is an economist focusing on the economics, law, history, and political economy of science and technology.