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Patents Do Not Bar Public Pharma Policies

August 03, 2023

Laura Dolbow, Sharswood Fellow, argues that Merck misconstrues patent law in its recent Takings Clause challenge to Medicare’s price negotiation program.

Laura Dolbow, Sharswood Fellow at the University of Pennsylvania Carey Law School, examines a lawsuit filed by Merck, alleging the federal government’s unconstitutional takings of patented medicines.

From the The Regulatory Review:

Last month, the pharmaceutical company Merck filed a lawsuit that alleges that the Medicare price negotiation program created by the Inflation Reduction Act will lead to an unconstitutional taking of its patented medicines. To support that argument, Merck’s complaint seems to misconstrue the rights that patents confer. This misstatement has significant implications for both Merck’s takings claim and policy debates about access to medicines.

Laura Dolbow, Sharswood Fellow Laura Dolbow, Sharswood FellowIn its complaint, Merck states that because it has patents, Medicare “cannot just manufacture its own versions of Merck’s drugs for beneficiaries; it must procure them from Merck.” Patents, however, do not bar Medicare from making its own versions of Merck’s drugs. Merck might be able to use its patents to keep private parties off the market. But that changes when the government gets involved. Patents do not give Merck—or any other patent holder—the power to stop the government from making patented medicines.

It makes sense that patent holders cannot use patents to stop government actions. The government is the entity that gives out patents in the first place. Just as Congress made the decision to allow private parties to obtain patents, it also made the decision to allow the government to make and use any patented inventions it wants.

The Regulatory Review is a daily online publication that provides accessible coverage of regulatory policymaking and enforcement issues across a full range of regulatory topics and from a variety of perspectives.

Launched in 2009 and operating under the guidance of Cary Coglianese, Edward B. Shils Professor of Law and Professor of Political Science, The Review is edited by students at Penn Carey Law. It is part of the overarching teaching, research, and outreach mission of the Penn Program on Regulation (PPR), which draws together more than 60 faculty from across the University of Pennsylvania.

Read the full article at The Regulatory Review.