Are "March In Rights" the Answer to the High Cost of Insulin?

On a new 2019 segments of Designated Survivor (Netflix), the problem of high cost insulin was solved by the application of “March in rights”. “March-in rights are rights granted to the federal government. These allow the government to grant patent licenses to other parties or to take licenses for themselves if they helped fund the patent owner's research and development. Such licenses can even be granted to competitors if the government deems it necessary. . . . March-in rights are outlined in detail under the U.S. Code, Title 35, Part II, Chapter 18, Section 203.” March-In Rights: Everything You Need to Know

However, march in rights have previously been used where the patent holder has not pursued the patent or not brought the product to market or otherwise made the benefits of the patent “reasonably accessible” to the public. The law has never been used to force a patent holder to reduce its prices.

But could the law be so used? The courts have not ruled on this issue. Nonetheless, a patent right is a property right. The Fifth Amendment to the Constitution reads:

“.. . nor shall private property be taken for public use, without just compensation.”

One could argue that the government forcing a patent holder to reduce its prices is not taking the patent away, but the ability to price a product and keep competitors from making generic versions of the product to sell at lower prices is one of the key features of a patent. The limits of government established in the U.S. Constitution have been whittled away bit by bit since it adoption. This would be just one more bit of erosion that I cannot support.

But, it may be moot in the case of insulin anyway. “A few years earlier, on March 22, 1922, Banting and his co-discover Charles Best announced the discovery of insulin, described in the Toronto Star as a "diabetes cure." But it wasn't a cure, it is just a replacement for the insulin that diabetics are not producing themselves, and they have to keep taking it forever.

Fortunately, Banting and Best thought it should be available for everyone, so they sold the patent to the University of Toronto for one dollar. . . .

It turns out that in 1972 the University of Toronto sold Connaught Labs, which made insulin, to the Canada Development Corporation, which sold it to Sanofi, which is now one of the big producers. . . .” The inventors of insulin sold their patent for a buck. Why is it so expensive? 

You can see that the United States did not “help fund the patent owner's research and development” for insulin, so march in rights have no application here. But they might have application for other drugs.

The problem is that patent holders, not only pharmaceutical companies, but in the technology areas, continuously attempt to improve their products or services and file patent application after patent application for minor changes and create a thicket of patents that make it very difficult for competitors to enter even after the initial patent expires. “Insulin itself has been modified chemically to make versions that work faster or last longer. The delivery system has changed a lot. Instead of needles and syringes, there are insulin pumps, pens and other methods.” Ibid.

So, like many “solutions” that appear to be simple, this too is very complex. Such solutions make great campaign slogans and sound bites, but slogans and sound bites are no substitute for intensive analysis. Exactly what the best revisions of the complex patent laws are are beyond my current expertise, but this should be one of the tasks of the next Congress.