U.S. Lawmakers Request Transparency on Defense Department’s Use of March-in Power to Reduce Drug Prices

WASHINGTON, D.C., United States – United States Senator Elizabeth Warren (D-MA) and Representative Lloyd Doggett (D-TX) have sent a letter to Secretary of Defense Lloyd J Austin III requesting details on the Department of Defense’s (DoD) efforts in reducing the prices of DoD-funded drugs, vaccines, and medical equipment through “march-in” authority.

As directed by the Bayh-Dole Act, the government can make certain products more affordable by retaining “non-exclusive, nontransferable, irrevocable, paid-up” licenses for products developed with government funding, and in certain situations, in order to “alleviate health or safety need,” the government can “march-in” and direct other licensees, or contract with third parties, to produce the products in question.

Under the National Defense Authorization Act for Fiscal Year 2018 Report, the DoD secretary was supposed to use march-in rights to lower the costs of DoD-funded medical products whose prices were higher in the US than elsewhere.

Further, the lawmakers filed the “Make Taxpayer-Funded Department of Defense Medical Interventions Affordable Act” that required the DoD to make public the list of drugs, vaccines, and medical technologies receiving funding from the department, as well the costs of developing them, and use march-in rights on at least 10 interventions per year.

Warren said, “The Senate directed the Department of Defense to use its existing authority to help lower the cost of medical products including prescription drugs, and the Department must update Congress on its steps to comply with the FY18 report.” For Doggett, it’s a matter of increased transparency for taxpayers, who fund pharmaceutical development, including for “miracle cures and treatments,” even those for COVID-19.

In their letter, Warren and Doggett wrote: “It is unclear what steps, if any, DOD has taken to comply with this report language.” The lawmakers are now requesting answers to the following questions no later than August 9, 2021:

• What steps, if any, has DOD taken steps to implement the FY18 NDAA Report language?
• Please provide a complete list of the drugs, vaccines, and medical technologies that have “benefitted from DOD funding” and have a price that “is higher in the United States than the median price charged in the seven largest economies that have a per capita income at least half the per capita income of the United States.”
• For each of the drugs, vaccines, and medical technologies identified in (2):
  • Has DOD considered using its authorities under 35 U.S.C. 209(d)(1) or 203 to authorize a third party to produce a lower-cost product? If not, why not?
  • Does DOD have plans to use its authorities to expand access to a lower-cost product? If not, why not?
• What barriers, if any, has DOD faced in implementing the FY18 NDAA Report language?