A new op-ed in STAT News by Chris Morten, Christian Urrutia, and James Krellenstein explains how an existing legal tool called government patent use could be used by the Department of Health and Human Services (HHS) to increase competition and drive down the price of remdesivir:
A little-known but powerful law could let HHS address these twin problems of supply and pricing in one fell swoop. 28 U.S.C. § 1498 allows federal agencies to take control of industry owned patents using a tool known as government patent use. Essentially, government patent use would let HHS control both the manufacturing and distribution of remdesivir by simply paying compensation to Gilead for the use of its patents.
HHS could license remdesivir manufacturing to multiple competing drug manufacturers, which would provide adequate supply while pushing prices down. Patients and payers would pay low prices for remdesivir, close to its manufacturing costs. HHS’s intervention would increase competition, not hinder it.
Meanwhile, Gilead would still be rewarded for its contributions to the development of remdesivir, as Gilead can go to court to collect the “reasonable and entire compensation” to which it is entitled under law for the government’s use of Gilead’s patents. (The court-awarded “reasonable and entire compensation” is typically a market-rate royalty, which could be worth tens or even hundreds of millions of dollars.) Everybody wins.