
Director, IP Policy, Global Innovation Policy Center (GIPC), U.S. Chamber of Commerce
Published
October 28, 2024
On September 25th, a small group of Democratic lawmakers penned a letter to Health and Human Services (HHS) Secretary Xavier Becerra urging the Federal Government to use “existing legal authority under 28 U.S.C. § 1498” to issue patent licenses to make generic versions of semaglutide, an innovative medicine used to treat obesity-related issues.
What is Section 1498: 28 U.S.C. §1498(a) allows the government to use any patented invention without the patent holder’s permission, but the patent owner can seek compensation by filing a lawsuit in the United States Court of Federal Claims. March-in rights, on the other hand, let the government force a patent holder to license their invention to others, but only for inventions developed with federal funding.
Why it matters: Section 1498 is not designed for, nor would it be effective in, the purposes the lawmakers suggest. In fact, it was originally enacted in 1910 to ensure wartime readiness in World War I. The Federal Government has never used this law to permit private companies to sell drugs to private consumers in the private healthcare market. [1] [2]
The big picture:
- Innovation at risk: Patents provide the necessary incentive for life science companies to invest in the lengthy, uncertain and costly process of developing new medicines. Weakening these protections could deter investment in new treatments, ultimately slowing the pace of medical advancements.
- Precedent setting: Relying on Section 1498 to control the price of medicines could pave the way for its application in other sectors, threatening the stability of patent protections across multiple innovative industries.
What they’re saying: In September, twenty-five intellectual property experts sent a letter to Congressional leaders warning them not to believe misleading assertions by academics who claim government price controls on medicines will lead to lower costs for consumers.[3]
What’s next: Proponents of intellectual property confiscation are likely to persist in their advocacy, arguing for mechanisms to impose price controls on innovative medicines. However, our leaders must reject these false narratives and instead recognize the enormous role that intellectual property protections play in medical innovation.
[1] https://cip2.gmu.edu/2018/11/05/proposal-for-drug-price-controls-is-legally-unprecedented-and-threatens-medical-innovation/
[2] Section 1498(A) is Not a Rx to Reduce Drug Prices (Open Access) - Food and Drug Law Institute (FDLI)
[3] https://ipwatchdog.com/2023/09/28/ip-vips-send-letter-congress-countering-calls-government-price-controls-drugs/id=167370/
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