WEBVTT - Biden’s Drug Pricing March-in Proposal 0:00:11.880 --> 0:00:15.880 Hello, and welcome to the Boats and Verdicts podcast, hosted 0:00:15.880 --> 0:00:20.560 by the policy and Litigation team at Bloomberg Intelligence, investment 0:00:20.600 --> 0:00:25.439 research platform at Bloomberg LP. This podcast series examines the 0:00:25.560 --> 0:00:30.440 intersection of business policy and law. I'm Doing Right, an 0:00:30.480 --> 0:00:34.840 analyst with Bloomberg Intelligence covering government healthcare policy. 0:00:34.920 --> 0:00:38.519 And I'm Tish Walker, an analyst with Bloomberg Intelligence covering 0:00:38.640 --> 0:00:40.239 pharma patent litigation. 0:00:41.200 --> 0:00:45.080 So our topic for today is the Biden Administration's proposal 0:00:45.680 --> 0:00:48.879 to update marching rights under the Buy Dole Act to 0:00:48.920 --> 0:00:52.479 include a specification that price can be a factor in 0:00:52.560 --> 0:00:55.640 determining that a drug is not accessible to the public. 0:00:56.480 --> 0:01:01.040 While BIDOLE applies to any taxpayer funded invention, our focus 0:01:01.080 --> 0:01:04.720 will be on drugs and drug prices. This action is 0:01:04.760 --> 0:01:09.200 in stark contrast with the Trump administration's efforts to frankly 0:01:09.280 --> 0:01:12.679 do the opposite, which is to prohibit the exercise of 0:01:12.840 --> 0:01:17.080 marching rights on the basis of price alone. Stepping back. 0:01:17.840 --> 0:01:21.119 This is part of a broader effort by the Buying 0:01:21.200 --> 0:01:24.400 administration to keep the focus on its policies to lower 0:01:24.480 --> 0:01:29.440 healthcare costs, specifically drug prices, after passage of the Inflation 0:01:29.720 --> 0:01:34.480 Reduction Act. So, what is the Bidual Act. What are 0:01:34.560 --> 0:01:38.480 marching rights? How have marching rights been used in the past, 0:01:39.120 --> 0:01:44.440 How could expansion as proposed under the framework impact manufacturers 0:01:44.480 --> 0:01:50.200 and research institutes, institutions that accept federal funding, and if applied, 0:01:50.280 --> 0:01:53.920 will it ly to lower prices? Today we have doctor 0:01:53.960 --> 0:01:57.280 Aaron Kesselheim, a professor of medicine at the Harvard Medical 0:01:57.280 --> 0:02:00.640 School and faculty member in the Department of Medicine at 0:02:00.640 --> 0:02:05.160 Brigham and Williams and Women's Hospital. He's also the director 0:02:05.200 --> 0:02:09.880 of Portal the Program on Regulation Therapeutics and Law, based 0:02:09.880 --> 0:02:14.040 out of the Brigham and Women's Hospital. Doctor Kesselheim, Welcome 0:02:14.080 --> 0:02:16.680 to the Boats and Verdicts podcast. 0:02:17.560 --> 0:02:19.920 Thank you very much. It's a pleasure to be here. 0:02:21.120 --> 0:02:23.720 Now, just to kick things off, can you tell us 0:02:23.720 --> 0:02:26.120 a bit about your work at Harvard Medical School. 0:02:27.000 --> 0:02:31.560 Sure. I'm a primary care doctor and a professor of 0:02:31.600 --> 0:02:34.880 medicine at Harvard Medical School, and I run a research 0:02:34.919 --> 0:02:38.919 center called the Program on Regulation Therapeutics in Law, which 0:02:38.960 --> 0:02:43.760 is an interdisciplinary research center that accepts no funding from 0:02:43.800 --> 0:02:48.680 the pharmaceutical industry and studies issues related to prescription drug 0:02:48.840 --> 0:02:52.600 development and regulation and use and pricing. 0:02:54.800 --> 0:02:58.799 Now, setting the stage a bit, what is the Bidole Act. 0:03:01.200 --> 0:03:04.280 Sure The by Dole Act was a piece of legislation 0:03:04.560 --> 0:03:11.640 passed in nineteen eighty that allowed it basically set a 0:03:11.760 --> 0:03:19.960 ground rule that institutions that received government funding and created 0:03:20.600 --> 0:03:27.560 patentable inventions from that government funding would retain title to 0:03:27.800 --> 0:03:32.959 that invention and be able to exclusively license it to 0:03:34.320 --> 0:03:41.760 organizations or companies that could then commercialize the innovation. 0:03:43.520 --> 0:03:48.560 Now, it seems like there's four key pillars that open 0:03:48.640 --> 0:03:51.440 the door for the government to exercise marchin rights. Can 0:03:51.480 --> 0:03:53.160 you go over those briefly? 0:03:55.040 --> 0:04:00.120 Right? So, in setting up this default that would allow 0:04:00.240 --> 0:04:06.000 the institutions to exclusively license inventions or discoveries made with 0:04:06.040 --> 0:04:12.360 government funding, the Congress also created what's called marching rights 0:04:12.480 --> 0:04:18.680 to allow the government, in extreme cases where those exclusive 0:04:18.760 --> 0:04:23.599 rights were not being used in the way that the 0:04:23.680 --> 0:04:26.359 government might want them to be used to then be 0:04:26.440 --> 0:04:30.800 able to step back in and say, you know, no way. 0:04:31.279 --> 0:04:33.520 You know, we're going to try to find other folks 0:04:33.600 --> 0:04:36.360 to be able to license those rights to as well, 0:04:36.400 --> 0:04:40.240 because ultimately the goal here is to turn government in 0:04:41.920 --> 0:04:47.640 funded inventions into commercialized items that could benefit the public. 0:04:47.760 --> 0:04:53.760 And so there was this this part of the statute 0:04:54.520 --> 0:04:58.120 called marching rights that said that, you know, if the 0:04:58.640 --> 0:05:01.279 if there if one of four different circumstances were met, 0:05:02.279 --> 0:05:07.640 the government could relicense that exclusively licensed product to another 0:05:08.360 --> 0:05:12.560 another entity. And those four circumstances were if the licensee 0:05:12.560 --> 0:05:17.440 hadn't taken effective steps to achieve practical application of the invention, 0:05:17.960 --> 0:05:20.760 if health or safety needs exist that are not reasonably 0:05:20.839 --> 0:05:25.760 satisfied by the licensee, If the government funded invention was 0:05:27.160 --> 0:05:30.120 is required for public use and that use is not 0:05:31.120 --> 0:05:35.279 satisfied by the licensee, Or if the licensee violated its 0:05:35.320 --> 0:05:38.360 agreement to manufacture the product the United States. Those are 0:05:38.360 --> 0:05:41.880 the four circumstances that you're talking about now. 0:05:42.000 --> 0:05:46.080 Tish and I have a number of podcasts focus on 0:05:46.760 --> 0:05:52.960 drug pricing, specifically around the Equation Reduction Act, but we're 0:05:53.000 --> 0:05:57.679 now seeing this conversation about trick prices applied to marching. 0:05:58.240 --> 0:06:02.960 So how does marching fit in with the current effort 0:06:03.040 --> 0:06:06.880 on reducing drug prices and increasing access. 0:06:07.920 --> 0:06:10.920 Well, there's been apart from the Inflation Reduction Act, which 0:06:11.000 --> 0:06:15.839 is you know, relatively novel, there's been a forty year 0:06:16.720 --> 0:06:22.040 debate over whether or not the phrase practical application in 0:06:22.080 --> 0:06:26.760 the first of those four categories, practical application is defined 0:06:26.800 --> 0:06:30.440 in the Statute as making the product available such that 0:06:30.520 --> 0:06:33.800 its benefits are available to the public on reasonable terms. 0:06:34.320 --> 0:06:37.120 That's the phrase used in the statute, and there's been 0:06:37.120 --> 0:06:41.760 a discussion over whether reasonable terms includes the price that 0:06:41.839 --> 0:06:46.720 the drug is made available at. And so if there's 0:06:46.800 --> 0:06:51.440 some you know, piece of a discovery, you know, either 0:06:51.480 --> 0:06:54.000 a drug or a you know, a medical device or 0:06:54.040 --> 0:06:57.040 something like that, that is discovered with government funding and 0:06:57.080 --> 0:07:00.520 then licensed to a commercial entity, and that commercial entity 0:07:00.960 --> 0:07:05.000 makes the product available at such a high price that 0:07:05.120 --> 0:07:10.520 people can't access it, that, you know, is that grounds 0:07:10.560 --> 0:07:15.320 for the government to exercise marching rights under the under 0:07:15.320 --> 0:07:17.960 the bi Dole Act. That's been the sort of ongoing 0:07:18.000 --> 0:07:21.920 discussion over the last over the last forty years. Now, 0:07:23.520 --> 0:07:26.920 you know, obviously the link with the Inflation Reduction Act 0:07:26.960 --> 0:07:30.200 is that the Inflation Reduction Act also is intended to 0:07:30.240 --> 0:07:33.840 try to ensure that the government, in this case Medicare, 0:07:34.360 --> 0:07:39.760 pays a fair price for certain very expensive drugs. But 0:07:39.800 --> 0:07:43.000 there's sort of you know, they're different. They're intended to 0:07:43.320 --> 0:07:47.200 you know, focus on different as different products and address 0:07:47.280 --> 0:07:50.520 different address different problems, but they're you know, they're both 0:07:50.600 --> 0:07:54.280 kind of under this sort of broader umbrella of issues 0:07:54.280 --> 0:07:57.160 that may or may not affect high drug prices. 0:07:57.520 --> 0:08:03.080 And so has this administration or even prior administrations been 0:08:03.120 --> 0:08:08.320 asked to apply march in with certain drugs based on price. 0:08:09.920 --> 0:08:11.040 What's the history here? 0:08:12.240 --> 0:08:14.360 So the history is that there have been about a 0:08:14.400 --> 0:08:17.440 half a dozen times over the last forty years, in 0:08:17.520 --> 0:08:21.200 the case of the of the healthcare, prescription drug and 0:08:21.280 --> 0:08:26.560 device market, where marching rights have been invoked as a 0:08:26.600 --> 0:08:31.720 potential solution to try to address high prices. There was 0:08:31.760 --> 0:08:35.880 a or or lack of availability of a product. There 0:08:35.920 --> 0:08:41.520 was a case of an HIV medication, and a there 0:08:41.559 --> 0:08:45.480 was another case of an eye drop medication, you know, 0:08:46.040 --> 0:08:50.520 in in the early two thousands, where marching rights was invoked. 0:08:50.520 --> 0:08:51.800 And as they said, there have been about half a 0:08:51.840 --> 0:08:55.120 dozen times where marching rights have been invoked. And of 0:08:55.120 --> 0:08:59.839 those half a dozen times, really two of them or 0:09:00.040 --> 0:09:05.040 three of them were related to the drug being priced 0:09:05.040 --> 0:09:08.800 at a very high level and whether that was enough 0:09:08.840 --> 0:09:11.760 to sustain marching rights. And in none of those cases, 0:09:11.800 --> 0:09:15.040 including cases where the drug was priced at a really 0:09:15.120 --> 0:09:20.480 high level, did did the ni H ever even begin 0:09:20.679 --> 0:09:25.080 to take up marching rights as a as a potential consideration. 0:09:25.280 --> 0:09:30.160 So no times has it ever been invoked. And it 0:09:30.280 --> 0:09:33.720 in particular, you know, of those six or so times, 0:09:34.440 --> 0:09:37.199 the three of them that in that's that explicitly involved 0:09:37.240 --> 0:09:41.800 high prices, where whereas not it was not, you know, 0:09:41.840 --> 0:09:44.800 the the ni H declined to invoke marching rights and 0:09:44.800 --> 0:09:49.040 and and imply that that pricing alone is not enough 0:09:49.040 --> 0:09:53.840 of a consideration too to make a claim for marching rights. 0:09:54.800 --> 0:10:00.679 Now, this seems to be their reading of the statute. Uh. 0:10:00.720 --> 0:10:05.200 What's your take on what the legislative intent was of 0:10:05.240 --> 0:10:08.440 the by Dole Acts, specifically the marching requirements, because we 0:10:08.480 --> 0:10:13.600 are seeing some pushback by former staff who worked on 0:10:13.880 --> 0:10:17.720 this law that price was never meant to be a 0:10:17.760 --> 0:10:23.560 factor when applying or exercising march in what's your take 0:10:23.600 --> 0:10:27.280 on the intent going into developing this law. 0:10:28.400 --> 0:10:30.280 Well, I mean, I think it's pretty clear if you 0:10:30.360 --> 0:10:33.319 look back in the late nineteen seventies, because the Bidole 0:10:33.440 --> 0:10:36.920 Act wasn't just introduced and passed in a single legislative session. 0:10:36.960 --> 0:10:40.480 It evolved over the course of the you know, the 0:10:40.600 --> 0:10:43.480 end of the nineteen seventies, and I think it's I 0:10:43.520 --> 0:10:45.199 think it's very clear that if you look at the 0:10:45.280 --> 0:10:48.920 legislative history of the Act that that that price was 0:10:49.080 --> 0:10:54.880 considered as part of this reasonable terms catch all phrase, 0:10:55.040 --> 0:10:58.280 and that what the people in Congress were very concerned 0:10:58.280 --> 0:11:01.640 about was this idea that there would be this public 0:11:01.760 --> 0:11:05.800 investment in developing a product and then a company would 0:11:05.840 --> 0:11:09.319 make it available at a you know, at an unreasonably 0:11:09.440 --> 0:11:13.079 high price and uh and people wouldn't be able to 0:11:13.120 --> 0:11:15.360 access it. And so I think it is I think 0:11:15.360 --> 0:11:17.440 it is clear that if you look at the detailed 0:11:17.520 --> 0:11:20.640 legislative history of the bill, that that most of the 0:11:20.640 --> 0:11:24.600 people when they were talking about this this safety net 0:11:24.760 --> 0:11:28.240 in the bill, that they were thinking about price as 0:11:28.280 --> 0:11:31.680 part of it. And indeed, when Congress around that same 0:11:31.760 --> 0:11:35.480 time and in the later years, uses the phrase reasonable 0:11:35.559 --> 0:11:39.600 terms in other statutes, they very explicitly mean price as well. 0:11:39.720 --> 0:11:43.800 So it's a phrase that oftentimes that Congress intends to 0:11:43.880 --> 0:11:46.800 encompass price. Now, part of the controversy that you point 0:11:46.800 --> 0:11:50.800 out and comes from the fact that many years later, 0:11:52.440 --> 0:11:56.400 Buy and Dole wrote a an op ed in The 0:11:56.520 --> 0:12:01.680 Washington Post in which they explicitly said that, oh, we 0:12:01.840 --> 0:12:06.480 never meant for marchin rights to encompass price. But you know, 0:12:06.559 --> 0:12:09.240 by that time both Buy and Dole were working for 0:12:09.360 --> 0:12:14.520 consulting firms that had a financial vested interest in in 0:12:14.559 --> 0:12:17.480 them making that claim. And and you know, legislative history 0:12:17.600 --> 0:12:21.360 isn't is really should be based on a read of 0:12:21.400 --> 0:12:24.959 the of the record leading up to a bill rather 0:12:25.040 --> 0:12:27.960 than you know, these sort of post hawk statements made 0:12:28.040 --> 0:12:28.800 decades later. 0:12:31.120 --> 0:12:33.440 And you know, just you know, bringing it back to 0:12:33.800 --> 0:12:36.040 you know, we're talking about, you know, the focus on 0:12:36.160 --> 0:12:39.040 drugs here and one of the sort of the threshold 0:12:39.200 --> 0:12:42.320 issues being you know, it needs to be a subject invention. 0:12:42.559 --> 0:12:44.679 So we're looking at something that's going to have some 0:12:44.920 --> 0:12:48.480 level right of federal funding for us to even be here, 0:12:48.720 --> 0:12:52.440 you know, seeing if marchin rights, you know, would even 0:12:52.480 --> 0:12:55.440 be a possibility related to a certain drug. So, so 0:12:55.480 --> 0:12:59.800 what percent of FDA approvals include some level of federal funding? 0:13:00.080 --> 0:13:03.040 And are there certain therapeutic areas that maybe are more 0:13:03.240 --> 0:13:07.040 likely to have government investment or government funding as compared 0:13:07.080 --> 0:13:11.600 to other therapeutic areas well. 0:13:11.640 --> 0:13:15.400 I think it's important to recognize that every single drug 0:13:15.559 --> 0:13:19.440 approved by the FDA has is based on federal funding. 0:13:19.800 --> 0:13:22.960 One hundred percent. There are all drugs are based on 0:13:23.040 --> 0:13:28.640 federal funding. To NIH that leads to incredibly important discoveries 0:13:28.679 --> 0:13:33.960 in basic and translational science. And in some cases sometimes 0:13:33.960 --> 0:13:37.440 that federal funding even occurs later in later stages, you know, 0:13:37.520 --> 0:13:40.960 leading to you know, proof of proof of design and 0:13:41.000 --> 0:13:44.800 stuff like that. But the Bidole Act and Marchin Rights 0:13:44.840 --> 0:13:48.600 only applies when there is a patent that has government 0:13:48.720 --> 0:13:52.720 rights as part of the patent. And there is a 0:13:52.880 --> 0:13:58.560 very small number of FDA approved drugs that have patents 0:13:58.720 --> 0:14:04.559 that can be explicitly linked to government sponsored funding. To 0:14:04.640 --> 0:14:08.600 government funding, We're talking on the order of, you know, 0:14:08.679 --> 0:14:13.160 a few dozen drugs over the last forty years, whereas 0:14:13.240 --> 0:14:16.120 you know, the FDA approves forty or fifty new drugs 0:14:16.160 --> 0:14:19.440 every year, you know, so we're talking that, you know, 0:14:19.480 --> 0:14:24.080 of all the drugs that have federal funding. The Bidole 0:14:24.160 --> 0:14:26.920 Act and Marching Rights only applies when there's a patent, 0:14:27.480 --> 0:14:30.360 and you know, the number of drugs that have that 0:14:31.240 --> 0:14:33.800 is actually very, you know, really quite small. 0:14:38.400 --> 0:14:43.960 Okay. So with that background, we have a sense of 0:14:44.600 --> 0:14:50.320 what the administration wants to do and expanding the ability 0:14:50.320 --> 0:14:54.280 to exercise march In with the focus on direct prices 0:14:54.320 --> 0:14:59.560 and whether that invention is available on reasonable terms. I 0:14:59.600 --> 0:15:05.800 think I look at the document that's for comment, I 0:15:05.880 --> 0:15:12.080 see words like reasonable, extreme, and unjustified which is a 0:15:12.120 --> 0:15:18.600 caveat to actually exercising marchin rights. What's your sense of 0:15:19.240 --> 0:15:22.240 where that bar should be set in terms of what 0:15:22.440 --> 0:15:26.240 is reasonable? But then also when you think about some 0:15:26.280 --> 0:15:31.240 of the other language, as I mentioned earlier, extreme and unjustified, 0:15:32.400 --> 0:15:35.200 is that kind of a way for the administration to 0:15:35.600 --> 0:15:40.400 back out of exercising marchin rights. Help me kind of 0:15:40.440 --> 0:15:45.480 wrap my head around how these terms can be defined 0:15:45.640 --> 0:15:48.600 so that this would be something that is a bit 0:15:48.640 --> 0:15:49.680 more predictable. 0:15:51.040 --> 0:15:54.400 Yeah, I think that's a really important issue because you 0:15:54.440 --> 0:15:59.640 know predictability and you know ex anti understanding what the 0:15:59.680 --> 0:16:05.240 response onsibilities are for you know, government uh inventions that 0:16:05.280 --> 0:16:08.560 have government sponsored patents associated with them is a really 0:16:08.600 --> 0:16:13.480 important issue. And so you know, I think that it 0:16:13.560 --> 0:16:17.120 would be more useful to have a clear definition of 0:16:17.160 --> 0:16:22.440 what reasonable terms are. So, for example, one definition could 0:16:22.440 --> 0:16:26.040 be that you know a product is made available on 0:16:26.120 --> 0:16:32.440 reasonable terms when that product's price is you know, on 0:16:32.680 --> 0:16:35.720 par with the price that the product is made available 0:16:35.760 --> 0:16:41.080 to other industrialized countries in Europe or Canada or Australia 0:16:41.120 --> 0:16:45.600 or Japan. And so you know, if other countries are 0:16:45.600 --> 0:16:48.480 getting a drug at a certain price, you know there's 0:16:48.480 --> 0:16:51.080 no reason that the that the US should be spending 0:16:51.600 --> 0:16:55.200 two to four times higher than you know, for its 0:16:55.280 --> 0:16:57.600 for the product in the in for American patients. But 0:16:57.640 --> 0:17:01.000 in fact, that is what often happens for brand name drugs, 0:17:01.040 --> 0:17:03.520 is that in the US we spend two to four 0:17:03.560 --> 0:17:06.560 times more than is spent in other countries. So that 0:17:06.640 --> 0:17:10.320 might be a uh, you know, a clear ex anti 0:17:10.520 --> 0:17:14.840 rule for how to define what reasonable terms are in 0:17:14.920 --> 0:17:19.800 terms of price. And the Biden administration proposed guidance. As 0:17:19.840 --> 0:17:24.080 you said, you know, you see phrases like extreme and unjustified, 0:17:25.200 --> 0:17:28.520 you know, at which you know, are a lot more 0:17:29.600 --> 0:17:32.360 vague in terms of how they would be applied. And 0:17:32.400 --> 0:17:37.359 so you know, ultimately the application of marching rights is 0:17:37.359 --> 0:17:41.639 going to be up to you know, the the executive 0:17:41.640 --> 0:17:44.120 agencies n I H and the other agencies that are 0:17:44.480 --> 0:17:48.200 tasked with implementing this, and so you know, it's gonna 0:17:48.280 --> 0:17:52.320 it's gonna be you know it. You know, those kinds 0:17:52.320 --> 0:17:56.600 of of phrases that that aren't clearly defined, you know, 0:17:56.720 --> 0:18:02.280 may may be subject to some you know, variable interpretations 0:18:02.320 --> 0:18:05.639 over the years depending on who's in charge. So and 0:18:05.680 --> 0:18:08.520 I think it's also important to recognize that that it 0:18:08.600 --> 0:18:14.360 is very challenging administratively, you know, and judicially to implement 0:18:14.440 --> 0:18:17.400 marchin rights in the first place. So you know, it's 0:18:17.440 --> 0:18:23.960 a it's really a safety net for circumstances where you know, 0:18:24.080 --> 0:18:29.359 products are really you know, manufacturers or or entities that 0:18:29.359 --> 0:18:33.159 are commercializing a government funded project product, you know, really 0:18:33.200 --> 0:18:37.879 are taking advantage in ways that that are unfair to 0:18:38.080 --> 0:18:41.679 US patients, you know. 0:18:41.880 --> 0:18:44.359 So you know, I think we just talked about how 0:18:44.400 --> 0:18:47.640 the terms you know, reasonable and extreme and unjustified, they 0:18:47.680 --> 0:18:50.159 can be a little bit subjective and maybe you know, 0:18:50.320 --> 0:18:55.200 subject to variation depending on different administrations. But you did 0:18:55.240 --> 0:18:57.399 give at least, you know, one example of maybe of 0:18:57.400 --> 0:19:01.879 a potential way to you know, consistently apply you know, 0:19:02.000 --> 0:19:05.640 marchin rights, which is perhaps looking at pricing in other 0:19:05.760 --> 0:19:09.439 jurisdictions compared to the US. So if you were at NIS, 0:19:09.520 --> 0:19:11.960 or if you were advising the White House here, what 0:19:12.040 --> 0:19:15.480 are some factors you think that could be applied in 0:19:15.560 --> 0:19:18.840 this sort of in a consistent manner that could trigger 0:19:18.920 --> 0:19:21.480 marchin rights to maybe get away from some of that 0:19:21.600 --> 0:19:24.679 you know, subjective language. 0:19:26.000 --> 0:19:28.040 So I agree, I think that I think that that 0:19:28.080 --> 0:19:31.560 would be one way of trying to implement you know 0:19:31.680 --> 0:19:35.560 that in a in a more predictable fashion. And in fact, 0:19:36.080 --> 0:19:39.000 you saw recently that there there was some news about 0:19:39.040 --> 0:19:45.520 a government license for a COVID nineteen monoclonal antibody development 0:19:45.640 --> 0:19:49.440 with a private company, where you know that that kind 0:19:49.480 --> 0:19:52.359 of language of you know, the US price should be 0:19:52.359 --> 0:19:56.679 on par with other industrialized countries prices was part of 0:19:56.720 --> 0:20:01.320 that was part of that U the license for that 0:20:01.400 --> 0:20:04.960 particular product. So that's one example. I mean, you could 0:20:04.960 --> 0:20:08.520 imagine other formulations as well. You can imagine that you know, 0:20:08.600 --> 0:20:13.800 maybe maybe it's defined as a value based price according 0:20:13.840 --> 0:20:20.520 to some you know, independent valuation organization, or you could 0:20:20.560 --> 0:20:24.000 imagine that a reasonable price is defined as the cost 0:20:24.040 --> 0:20:28.440 of production plus a certain percentage that would allow for 0:20:28.560 --> 0:20:31.919 a reasonable royalty to the manufacturer, you know, cost of 0:20:31.960 --> 0:20:34.879 production plus one hundred percent or two hundred percent or 0:20:34.880 --> 0:20:39.720 whatever people decide is a fair royalty for for the 0:20:39.880 --> 0:20:45.560 entity that's taking on the the responsibility of commercializing the product. 0:20:46.160 --> 0:20:49.959 Yeah, and you know, it'll be interesting to see if 0:20:50.000 --> 0:20:52.520 we see more of that in some of these you 0:20:52.520 --> 0:20:56.520 know contracts that are are being you know developed between 0:20:57.240 --> 0:21:01.399 the government and you know third parties. But you know, 0:21:01.440 --> 0:21:04.159 going back to when we were setting the considerations and 0:21:04.200 --> 0:21:06.479 sort of setting the stage for a vidol. You know, 0:21:06.520 --> 0:21:09.639 you mentioned that a subject invention and a patent that 0:21:09.760 --> 0:21:14.520 is a subject invention is a threshold right for exercising 0:21:14.560 --> 0:21:19.600 Marchin rights. And you know, there's multiple patents that can 0:21:19.680 --> 0:21:22.160 cover let's say a drug product. You can have patents 0:21:22.160 --> 0:21:26.600 that cover the compound itself, could cover salt forms, formulations, 0:21:26.760 --> 0:21:29.840 method of using, and usually you see some sort of 0:21:29.880 --> 0:21:32.879 combination of all of these different types of patents that 0:21:32.960 --> 0:21:36.960 might be protecting a certain product. So, in your view, 0:21:37.119 --> 0:21:39.280 is it going to be a rare case where all 0:21:39.320 --> 0:21:41.960 the patents that cover a drug would be subject to 0:21:42.040 --> 0:21:47.159 Marchin rights? And you know, how would compulsory licensing of 0:21:47.359 --> 0:21:50.679 some but not all of those patents affect access. So 0:21:50.760 --> 0:21:54.760 for example, maybe one of those six patents or three 0:21:54.840 --> 0:21:57.760 of those six patents might be subject inventions, but there 0:21:57.800 --> 0:22:01.240 could be other patents that protect the drug that aren't 0:22:01.280 --> 0:22:04.240 necessarily subject inventions. 0:22:05.200 --> 0:22:06.760 I do think it is going to be the rare 0:22:06.840 --> 0:22:09.120 case that all of the patents on a drug are 0:22:09.359 --> 0:22:13.119 connected to government funding. And one of those rare cases 0:22:13.160 --> 0:22:17.679 actually exists. There's a drug called ensoludamide or extandy where 0:22:17.720 --> 0:22:21.280 all the FDA listed patents are. It's a cancer drug 0:22:21.640 --> 0:22:27.080 used in prostate cancer, very effective drug developed entirely at 0:22:27.160 --> 0:22:33.320 UCLA before being licensed out for manufacturing and commercialization, and 0:22:33.600 --> 0:22:36.159 all of the patents are linked to government funding. And 0:22:36.240 --> 0:22:40.480 so that's a pretty clear case where marching rights could 0:22:40.480 --> 0:22:43.679 be available. In other cases, as you point out, it 0:22:43.800 --> 0:22:47.119 might only be one out of you know, six or 0:22:47.160 --> 0:22:51.879 twelve or you know, even more patents that relate to 0:22:52.000 --> 0:22:55.439 marchin rights. What we've found actually in our research is 0:22:55.480 --> 0:22:58.840 that of the drugs that are linked to government funded patents, 0:22:58.880 --> 0:23:01.640 a lot of those government funded patents are the are 0:23:01.760 --> 0:23:05.160 on the active ingredient and are like the central most 0:23:05.200 --> 0:23:10.240 important patents. And so I think that you know, the 0:23:10.359 --> 0:23:14.680 process of exercising marching rights on some of these very 0:23:14.720 --> 0:23:18.919 important patents, even if there are other patents available, you know, 0:23:19.000 --> 0:23:22.320 that might lead a company that's commercializing the product to 0:23:23.560 --> 0:23:27.719 consider what whether or not its price is fair and 0:23:27.800 --> 0:23:32.320 consider adjusting it if it seems like there's a possibility 0:23:32.400 --> 0:23:36.919 that another company could get access to its you know, 0:23:37.119 --> 0:23:42.280 sort of most important intellectual property. It's also the case, 0:23:42.359 --> 0:23:46.520 by the way, that the government has the authority under 0:23:46.560 --> 0:23:51.600 a different section of the of the Federal Statute of 0:23:51.680 --> 0:23:56.080 the Federal Code called section fourteen ninety eight, in which 0:23:56.080 --> 0:24:01.000 the government is allowed to use patented innss for its 0:24:01.040 --> 0:24:05.080 own use. So you could imagine marching rights applying to 0:24:05.160 --> 0:24:10.760 the one patent that is the central, you know, active 0:24:10.880 --> 0:24:15.040 ingredient patent, and then the government relying on section fourteen 0:24:15.119 --> 0:24:18.840 ninety eight to allow the use of the other five 0:24:18.960 --> 0:24:22.760 or nine or fifteen patents on the drug, you know, 0:24:22.840 --> 0:24:26.879 to allow the other manufacturer to supply the product to 0:24:28.080 --> 0:24:32.520 Medicare and Medicaid or other other government payers. So there 0:24:32.560 --> 0:24:37.119 are there are ways around this, this pro this issue 0:24:37.119 --> 0:24:39.879 that you're talking about, where marching rights might only apply 0:24:40.000 --> 0:24:42.959 to one out of the huge thicket of patents that 0:24:43.040 --> 0:24:45.680 a manufacturer builds around its brand name drug. 0:24:46.800 --> 0:24:46.960 Yeah. 0:24:47.040 --> 0:24:50.240 No, it's interesting that you mentioned section fourteen ninety eight, 0:24:50.840 --> 0:24:53.439 and maybe this could be a whole other podcast, but 0:24:53.720 --> 0:24:56.800 I know certainly that that's something that I don't know 0:24:56.840 --> 0:25:00.000 if you followed the COVID vaccine litigation, but I've done 0:25:00.040 --> 0:25:02.520 and some research on these, and that's certainly a defense 0:25:02.600 --> 0:25:07.560 that Maderna has put forth in terms of some of 0:25:07.600 --> 0:25:11.040 the patent infringement actions that have been filed against them 0:25:11.320 --> 0:25:16.160 for their COVID vaccine, basically saying that the government authorized 0:25:16.240 --> 0:25:21.159 via Section fourteen ninety eight for them to you know, 0:25:21.320 --> 0:25:25.600 basically use a third party's IP. So I think it'll 0:25:25.640 --> 0:25:28.480 be interesting to see how that. I think the case 0:25:28.760 --> 0:25:32.280 where you're seeing it right now is the arbutus being Madernist. 0:25:32.280 --> 0:25:34.720 So it'll be interesting to see how that sort of 0:25:34.760 --> 0:25:38.080 plays out. But I think what's also interesting there is 0:25:38.119 --> 0:25:41.520 while it might alleviate that third party from infringement, I 0:25:41.560 --> 0:25:45.840 do think it also provides the patent owner could always 0:25:45.840 --> 0:25:48.000 go after the government I think through the Court of 0:25:48.080 --> 0:25:51.960 Claims for patent infringement, but then could be limited potentially 0:25:52.200 --> 0:25:57.000 on damages that they could get back there. But you know, 0:25:57.200 --> 0:25:59.919 it's interesting, you know, we're talking about needing the patent 0:26:00.280 --> 0:26:03.760 and maybe not having all the patents, but you know, 0:26:03.880 --> 0:26:06.760 can you discuss a little as well about how compulsory 0:26:06.800 --> 0:26:11.000 licensing isn't necessarily the same as tech transfer. So you know, 0:26:11.040 --> 0:26:15.040 for example, it would be one thing to potentially license 0:26:15.080 --> 0:26:19.080 a patent to a third party for them to develop it, 0:26:19.400 --> 0:26:22.840 but you're not necessarily transferring the know how, right, Like, 0:26:22.920 --> 0:26:25.360 how do you make that drug? How do you manufacture 0:26:25.400 --> 0:26:28.919 that drug. So you know, with that in mind, what 0:26:28.960 --> 0:26:30.840 do you think the process would look like for the 0:26:30.880 --> 0:26:33.399 government to use the license and to contract with a 0:26:33.480 --> 0:26:36.959 generic manufacturer to make you know, a particular drug at 0:26:37.000 --> 0:26:39.919 a lower price, you know, And do you think, you know, 0:26:40.160 --> 0:26:42.280 would that impact how long it would take for the 0:26:42.359 --> 0:26:43.840 drugs to be produced. 0:26:45.359 --> 0:26:48.600 I think it's a very important point, and I absolutely 0:26:48.640 --> 0:26:52.080 agree that it is not as simple as just transferring 0:26:52.080 --> 0:26:55.280 a patent to another manufacturer and then you know you're 0:26:55.320 --> 0:26:57.199 going to be able to have a product. You know, 0:26:57.320 --> 0:26:59.639 not only do you have to, you know, deal with 0:26:59.680 --> 0:27:02.600 the issue is that you're talking about about know how 0:27:02.720 --> 0:27:06.160 and manufacturing capacity, you know, you also have to deal 0:27:06.160 --> 0:27:09.320 with FDA approval of the manufacture of the product from 0:27:09.320 --> 0:27:14.600 that manufacturer. So you know, this is again all of 0:27:14.600 --> 0:27:17.399 this points to the fact that marching rights is not 0:27:17.960 --> 0:27:22.760 a large scale solution to issues related to prescription drug prices. 0:27:22.760 --> 0:27:28.960