Could the Government Purchase Drug Patents to Lower Costs? | Simplefill
While the U.S. government could theoretically buy drug patents to lower costs, current and more realistic tools include march-in rights, Section 1498, and government-negotiated licensing. These mechanisms can force lower prices or enable cheaper generic versions of expensive medications. In this blog, we’ll break down how these policies work, their potential impact on drug affordability in the U.S., and what they could mean for patients facing rising prescription costs.
If you’re trying to keep up with rising national drug spending, you can also read How Health Spending Will Grow by 2026.
What Would Happen if the Government Bought Drug Patents?
Buying a drug patent outright would give the federal government full control over price and distribution. The medication could be sold at near-generic prices because the developer has already been paid for the innovation upfront.
But here’s the catch, right now, the U.S. does not have an active policy for routine patent buyouts, and creating such a system would require new legislation and large federal budgets.
What Tools Does the Government Already Have to Lower Drug Prices?
March-In Rights
March-in rights come from the Bayh-Dole Act, which lets the government license a patented drug to another manufacturer if the product was developed using taxpayer funding, and the price or availability is not reasonable.
This means that if a drug developed with public dollars becomes unaffordable, the government can “march in” and authorize other manufacturers to produce it, instantly reducing costs through competition.
Section 1498
Section 1498 is one of the strongest existing tools the government has. It allows the government to use any patented invention, including drugs, or hire another manufacturer to produce it without permission from the patent holder. The only requirement is that the government pays the patent owner “reasonable compensation,” typically far below monopoly pricing.
Historically, Section 1498 has been used to:
- Obtain antibiotics during supply shortages
- Secure access to essential medications for federal programs
- Negotiate lower prices by creating credible competitive pressure
Could These Policies Hurt Pharmaceutical Innovation?
Pharma companies argue that tools like march-in rights and Section 1498 reduce the incentive to invest in new treatments. The concern is that R&D is expensive, profit margins fund future drug development, and forced competition could reduce returns.
On the other hand, many of the drugs eligible for government intervention receive extensive public funding during early research phases. Advocates argue taxpayers shouldn’t pay twice, once for development, and again through high prices.
Would Patent Buyouts Lower Drug Prices for Patients?
Yes, if they are implemented correctly, a patent buyout system could allow:
- Immediate generic-level pricing
- Removal of long exclusivity periods
- Faster access to affordable medications
- Reduced spending for Medicare, Medicaid, and employer plans
How Would These Policies Affect Patients Facing High Drug Costs?
If the government used march-in rights, Section 1498, or patent buyouts more aggressively, patients could benefit from, lower brand-name drug prices, and more generic alternatives. Plus they would see reduced insurance premiums and out-of-pocket spending or even increased availability of essential medications.
For patients struggling today, especially those with chronic conditions requiring high-cost medications, this could make lifesaving treatments far more accessible.
In the meantime, Prescription Assistance Programs like Simplefill help bridge the gap for real people navigating rising health spending and shifting policy landscapes.
Get Affordable Access to Prescription Medications
Simplefill is a full-service prescription assistance company that researches, qualifies, and maintains patients’ enrollment in all sources of assistance available to them.
Apply today by calling 877-386-0206. A caring Simplefill representative will contact you within 24 hours to discuss your application and, if qualified, enroll you in the program.
Frequently Asked Questions
Could the government force lower prices on expensive medications?
Yes. Through march-in rights or Section 1498, the government can authorize generic production or use the patent itself with reasonable compensation.
Would patent buyouts work for all medications?
They could, but the government would need a pricing formula to avoid overpaying. Buyouts are not currently in use.
Are these policies likely to lower drug prices in the near future?
March-in rights are the most immediate possibility, depending on the final federal framework. Section 1498 could also be used now if the government chooses.
Do these policies apply to drugs developed in specific states?
Yes. These are federal mechanisms, so they apply nationwide, including in Florida, California, Texas, and all other states.
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