Can the FDA just use 'march-in rights' to make its own Wegovy?

The “takings clause” in the Fifth Amendment to the U.S. Constitution might keep the federal government from creating competition for Wegovy and other popular, expensive anti-obesity drugs, but it might not.

Hannah Alise Rogers, a legislative attorney at the Congressional Research Service, gives that assessment in a new analysis of the collision between drug patent law and constitutional law.

The backdrop: High prices for Wegovy and other relatively new, patented GLP-1 agonist anti-obesity drugs are driving up employer plan costs.

Some in Congress have suggested taking a shortcut to lower prices: The U.S. Food and Drug Administration could simply use the authority created by the Bayh Dole Act to “march in,” let other companies make the drugs covered by the Wegovy patent, and provide reasonable compensation for Novo Nordisk, the company that owns the Wegovy patents, for use of the technology.

Related: Medicare’s 1st-ever drug price negotiations are about to begin, as legal battles persist

Drugmakers and their supporters, including the U.S. Chamber of Commerce, have argued that the government’s exercise of “march-in rights” would be a shocking breach of the patent holders’ property rights.

That kind of seizure of private property would violate the takings clause, which forbids the government from taking people’s property for public use without just compensation.

Rogers’ analysis: One legal question raised by the debate about the GLP-1 agonist march-in rights controversy is whether the Fifth Amendment’s taking clause applies to patents and other intangible property, Rogers writes.

“Personal property (such as pills or vials of a drug) is protected, but the Supreme Court has never directly held that patents are property protected by the takings clause,” Rogers says.

The Supreme Court has recognized a “per se taking” when the federal government “took title to a share of a farm’s agricultural crop and when an owner was deprived of all his property’s economic use or value,” Rogers says.

Sometimes, she says, the court recognizes a “regulatory taking” when an action “goes too far.”

The court has established general principles for determining whether a regulatory taking has occurred but has not created a set formula for determining “where a regulation ends and a taking begins.”