August 02, 2021

Warren, Klobuchar, Doggett Urge HHS to Utilize Administrative Authorities to Lower Drug Prices

Text of Letter (PDF)

Washington, D.C. - United States Senators Elizabeth Warren (D-Mass.) and Amy Klobuchar (D-Minn.) and Congressman Lloyd Doggett (D-Texas) requested an update from Department of Health and Human Services (HHS) Secretary Xavier Becerra on the Department’s plans to use administrative tools, including Section 1498 compulsory licensing and Bayh-Dole march-in rights, to reduce the prices of drugs. 

In the past 10 years, spending on retail prescription drugs in the United States increased by over $100 billion—from $244.3 billion in 2009 to $369.7 billion in 2019. Americans pay more for prescription drugs than patients in any comparable country. Each year, people in the United States spend an average of over $1,200 per person on prescription medicines, leaving families unable to afford critical drugs and forcing many to ration medications. In addition to harming individual patients, high drug prices also harm taxpayers

High drug prices should, in theory, be offset by a robust generic drug market. Under our current  system, the federal government awards patents and other statutorily authorized exclusivities to pharmaceutical companies that produce new, brand-name drugs—creating a time-limited  monopoly over parts of the drug market to incentivize innovation. Once those patents and  exclusivities expire, other drug companies can begin producing generic drugs. Pharmaceutical companies, however, have learned to manipulate the nation’s patent and exclusivity system, allowing them to maintain monopolies and keep drug prices high long after generics should have entered the market.

“In recent years, Congress has contemplated legislation that would systemically lower the cost of prescription drugs,” wrote the lawmakers. “Congress should develop and pass drug pricing legislation. But in the interim, HHS must do more to lower prescription drug costs—and it has pre-existing authorities and solutions at its fingertips to do just that.” 

In their letter, the Members of Congress highlight two ways that HHS can use its authoritative tools to lower drug prices, including Section 1498 compulsory licensing and march-in rights. They also request a set of information from HHS, including: 

  • What steps HHS has taken to conduct a review of the tools at HHS’ disposal to reduce the price of drugs and make treatments affordable for the American people;
  • When it utilizes executive branch authorities to lower drug prices, what drugs is HHS planning to target and what factors is HHS using to identify those drugs;
  • When does HHS plan to utilize march-in rights, compulsory licensing, and other executive branch tools to lower the price of drugs; and
  • What administrative tools will HHS be including in its report as directed by President Biden’s recent executive order.

“The Biden Administration has the opportunity to lower the prices of key drugs using these authorities. Americans should not be forced to ration essential drugs because they cannot afford their medical bills, and people should not die of preventable causes because state and local governments cannot afford the drugs they need,” the lawmakers wrote

Senator Warren has been a leading voice in Washington calling for lower prescription drug prices since joining the Senate in 2013. Most recently last month, Senator Warren and her Senate colleagues questioned PhRMA's lobbying efforts to block policies that would lower drug costs for millions of Americans. Also, in the same month, Secretary Becerra told Senator Warren that HHS looks forward to working with Congress on lowering drug prices, expanding coverage to include vision, dental, and hearing services, and ensuring older Americans 60 and over receive Medicare coverage.