How will the US ‘march-in’ rights impact the Australian pharma industry?

Pharma News: The Biden Administration’s pronounced stance on march-in rights and drug pricing has thrust these critical issues into the limelight for life sciences companies. A burning question arises: does Australia share a parallel standpoint with the US Bayh-Dole Act?

Last December, the Biden Administration opened the floor for public discourse by releasing a draft framework designed to amplify march-in rights, ultimately aiming to drive down drug prices. Of notable significance, the framework explicitly introduces the notion that the product’s price can now be a pivotal factor in determining whether statutory criteria have been met. The draft framework outlines specific considerations agencies must weigh before exercising march-in rights, delving into aspects such as the terms of sale and whether the public’s health or safety needs are being exploited for “extreme and unjustified” medicine pricing.

Contrastingly, Australia lacks an equivalent to the Bayh-Dole Act and lacks legislative frameworks outlining march-in rights for the Australian Government concerning drugs, life science inventions, or publicly funded research-derived inventions. Nevertheless, in theory, third parties may be granted march-in rights under the Australian Patents Act 1990 (Cth) through compulsory licensing or invoking Crown use provisions.

According to legal experts from DLA Piper, the criteria for compulsory licensing or unlicensed Crown use under Australian law significantly differ from those required for march-in rights under the Bayh-Dole Act. Despite these provisions existing, both in the US and Australia, practical applications have been scarce. The US has never exercised march-in rights under the Bayh-Dole Act, and Australia has witnessed merely three compulsory license applications since 1903.

Unlike the proactive approach adopted by the Biden Administration, particularly evident in the draft framework, the Australian Government has yet to exhibit any inclination towards leveraging Crown use or compulsory licensing provisions to alleviate drug costs in the country.

As the global debate on drug pricing intensifies, the divergence in approach between the US and Australia adds a layer of complexity to the evolving narrative surrounding government and the pharmaceutical sector.

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