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Favorable Drug Pricing Language In COVID-19 Government Contracts May Backfire for Industry

 
• By Sarah Karlin-Smith

Pharma has won pricing battles during the pandemic, but doesn’t seem to be winning war as senators on both sides of the aisle question how some drug companies were able to skirt controversial intellectual property ownership issues in COVID-19 drug and vaccine agreements with the US government. IP experts say the biggest harm to the government from the contracting language may not be the pricing concerns but the government’s ability to share leanings from the partnerships with other coronavirus development programs.

NIH Director Francis Collins displays a 3D model of the coronavirus during testimony at a US Senate Appropriations Committee hearing on 2 July 2020.
US NIH Director Francis Collins holds a 3D model of coronavirus during a Senate Appropriations Committee hearing on 2 July. The Pharma industry hopes that Collins’ view of ‘march-in’ rights becomes the model for government and public opinion.

Many drug companies partnering with US government on COIVD-19 vaccines and therapeutics landed favorable contracting terms that could insulate them from certain avenues the administration can use to exercise control of the prices or intellectual property of any resulting products.

But given the historical reluctance by key US leaders to use these powers even when they are in contracts, the situation could actually backfire on industry as the mere existence of these

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