Sen. Warren wants HHS to use ‘march-in rights’ to create Wegovy rival
She's once again calling for HHS to exercise "march-in" rights, which let the government create alternatives to patented items.
Sen. Elizabeth Warren is continuing the fight to persuade federal regulators to limit the power of patent protection when patents help drugmakers keep the prices of important medicines high.
The Massachusetts Democratic joined with Rep. Lloyd Doggett, D-Texas and 13 other members of the House and Senate to call on U.S. Health and Human Services Secretary Xavier Becerra to waive the patents Novo Nordisk uses to protect two popular GLP-1 agonist drugs, Ozempic and Wegovy.
The drugs can be used to improve blood sugar control, help people lose weight and help patients deal with other health issues.
Warren and the other members of Congress are backing arguments by Public Citizen and some other advocacy groups, such as Labor Campaign for Single Payer and New Jersey Citizen Action, that the U.S. Department of Health and Human Services should use its ability to “march in,” waive the usual patent protection rights provided by the section 1498 of Title 28 of the U.S. Code, and provide licenses that other manufacturers can use to make drugs that would compete with Ozempic and Wegovy.
“When manufacturers use their monopoly power to extract unfair and unjustified prices at the expense of consumers, the federal government must restrain such abuse,” Warren and the other members of Congress write in their letter.
HHS would have a legal obligation to pay Novo Nordisk reasonable compensation for use of the GLP-1 agonist technology and should do so, Warren and the other lawmakers write.
The lawmakers posted the letter on the web the day before Lars Jørgensen, the chief executive officer of Novo Nordisk, was set to testify before the Senate Health, Education, Labor and Pensions Committee about the cost of the company’s GLP-1 agonist drugs.
GLP-1 agonists and march-in rights
A 30-day supply of Ozempic costs more than $950, and a 30-day supply of Wegovy costs more than $1,300, according to GoodRx.
U.S. employer-sponsored health plans are already spending an average of about $89.37 per enrollee on Ozempic alone, according to Milliman.
David Joyner, the president of CVS Health’s CVS Caremark pharmacy benefit manager unit, has estimated that, if every American with a weight problem took GLP-1 agonists and similar drugs at current prices, spending on those drugs would amount to $1.2 trillion per year, or about 4.7% of U.S. gross domestic product.
The Biden administration proposed a regulatory framework for exercising march-in rights in December 2023, and Warren, Doggett and others pushed for the administration to complete work on the regulations in June.
Related: Senators push Commerce Department to finalize rules on lowering drug prices
“This is a popular framework that will help reduce exorbitant drug costs,” Warren and Doggett wrote then.
Revenue v. costs
The groups supporting a section 1498 waiver say expanding access to drugs like Ozempic and Wegovy would help the 30 million Americans with diabetes and the 100 million Americans who are on the way to getting diabetes, in addition to the many Americans fighting obesity.
Novo Nordisk, the maker of just Ozempic and Wegovy, has generated about $50 billion from the sale of the drugs since they were introduced.
“These revenues are an order of magnitude higher than even the most generous estimates of research and development costs for drugs that take into account failed candidates and a reasonable return on investment,” the groups say in their letter.
The other side
Drugmakers and PBMs themselves say competition, health plan price negotiations and patients’ inability to pay the sky-high prices are already starting to bring the GLP-1 agonist prices down to earth, and that the prices are high partly because pharmaceutical companies spent enormous sums and took enormous risks to develop important, innovative drugs.
Researchers have estimated that the cost of developing and testing a new drug in the United States can range from $161 million to $4.5 billion.
Bradd Watts, a vice president at the U.S. Chamber of Commerce, has argued that efforts by the federal government to lower drug prices by exercising march-in rights are a form of confiscation of private property.
“March-in rights create significant risks for businesses and patent owners, endangering their existing partnerships and intellectual property,” Watts wrote in a commentary posted in August. “Universities and private inventors rely on stable intellectual property arrangements to attract investors and collaborators. The risk of government intervention can disrupt these essential partnerships, which means less funding and fewer resources going into research and development.”