The United States healthcare system is one of the most expensive in the world. Unlike other products, when drug prices skyrocket, people may die. While advocating for various solutions, both the Biden and Trump administrations have recognized the importance of halting the rise of prescription drug prices. Most of the solutions advanced are focused on government-side initiatives, such as allowing Medicare to directly negotiate with pharmaceutical companies. Yet, the “march-in rights” built into the Bayh-Dole Act create an opportunity to set up a mechanism that would invite private actors to sue pharmaceutical companies for unconscionable drug pricing. The Bayh-Dole Act includes march-in rights which allow the government under certain circumstances to force the private parties that own the patents for drugs developed using federal funding to grant a license to an applicant.
This Note analyzes the United States system of ex post law enforcement through private litigation for the healthcare system, including Paragraph IV litigation from the Hatch-Waxman Act, qui tam litigation, and antitrust litigation. Although private enforcement can be ad hoc and uneven, it provides an avenue for redress when regulation has failed and gives the party with the informational advantage control over litigation. Taken together, these private enforcement mechanisms work to moderate drug prices, reduce fraud in healthcare billing, and ensure a healthy, competitive pharmaceutical market.
This Note advocates for an Amendment to the Bayh-Dole Act to clarify the criteria for the march-in rights by listing factors to define when drug prices are unreasonable or unconscionable, and to create a new mechanism for private enforcement where qui tam relators can bring suits to obtain licenses to manufacture and sell drugs at a lower price should a court find the newly set-out criteria have been violated. By housing the march-in rights in a system of private enforcement, Congress can create a system of ex post regulation for drug prices without stifling innovation or creating an unpredictable regulatory regime. This would ultimately create a relatively stable price ceiling for brand drug manufacturers to alter their economic behavior accordingly. The overall effect would be a system of more conscionable drug pricing for those drugs which the federal government funded.