A stethoscope tied around a pile of cash, with a pill bottle nearby. The pill bottle has cash and pills inside.

Drug Pricing Controls and the Power of Familiar Ideas

Eight in ten Americans think that prescription drug prices are unreasonable, according to a March 2018 Kaiser poll. That same poll found that more Americans considered passing legislation to lower drug pricing to be a top priority than passing legislation to improve infrastructure or to address the prescription painkiller epidemic, among other things.

Effectively addressing drug pricing is a complex task that will require the diligent efforts of many actors. On October 24, the Petrie-Flom Center held a full day’s programming to this important and timely topic. What I want to state here is a simple point—namely, that the very discussion of potential solutions can play a role in turning creative innovations into implementable solutions.

Here’s an example of what I mean: Within the last decade a variety of new hepatitis C treatments have become available. These new treatments are significantly more effective and have much fewer side effects that previous treatments. But access to these drugs has been limited due to the high price tags (e.g. $84,000 for a 12-week daily pill regimen).

And the pricing practices of companies like Gilead resulted in outrage over the pricing practices. While the addition of new, cheaper options eventually helped lower costs in the case of hepatitis C medication, we can’t always guarantee that market forces will successfully apply this kind of pressure.

During a period of years in which the price tag of these drugs meant that even many people with hepatitis C who were on Medicare couldn’t get access to the drugs, law makers, other government workers, and academics were getting creative in their proposed solutions.

One idea put forward was to use a federal patent buyout provision (28 U.S.C. 1498) to buy the rights to make generic versions of the drugs without requiring the consent of the patent-holders.

Described by Yale Law Professor Amy Kapczynski and Harvard Medical School Professor Aaron Kesselheim as making an analogous move to eminent domain over land, the provision would allow the government to gain the rights to produce the drugs at the price of fair compensation to the drug makers for the drug maker’s investment.

This patent buyout provision has been used infrequently, and uses have typically been by the U.S. military. Thus, the move may initially seem extreme. Sparsely-used or unfamiliar moves are easily seen so. But it was a move that some were willing to make given the outrageous price tag that had been attached to such an important, potentially life-saving drug.

For example, Senator Bernie Sanders wrote a letter to the Veterans Affairs Office requesting that they make just this move. Similarly, Louisiana Health Secretary Rebekah Gee expressed a willingness to support a patent buyout to address the hepatitis C drug pricing crisis.

While for the moment it looks like we may not need to use 28 U.S.C. 1498a for hepatitis C drug pricing, the work of those like Kapczynski, Kesselheim, Sanders, Gee, and others to help familiarize policy influencers of the option may play an important role in helping this creation innovation become a successfully implemented solution in future attempts to address extreme drug prices.

Mark Satta is a 2018-2019 Petrie-Flom Center Student Fellow.

Mark Satta

Mark Satta is an Assistant Professor of Philosophy at Wayne State University. He holds a JD from Harvard Law School and a PhD in Philosophy from Purdue University. His research interests include First Amendment law, health law, bioethics, and epistemology. He was a 2018-2019 Student Fellow at the Petrie Flom Center, where he completed a project entitled, "Spitting at Science: HIV Criminalization Laws and the Duty to Legislate in Accordance with Current Scientific Knowledge."

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