{ "id": "R44640", "type": "CRS Report", "typeId": "REPORTS", "number": "R44640", "active": true, "source": "EveryCRSReport.com", "versions": [ { "source": "EveryCRSReport.com", "id": 456288, "date": "2016-10-04", "retrieved": "2016-10-17T19:20:51.933783", "title": "Patents and Prescription Drug Importation", "summary": "Prescription drugs often cost far more in the United States than in other countries. Some consumers have attempted to import medications from abroad in order to realize cost savings. The practice of importing prescription drugs outside the distribution channels established by the brand-name drug company is commonly termed \u201cparallel importation\u201d or \u201cre-importation.\u201d Parallel imports are authentic products that are legitimately distributed abroad and then sold to consumers in the United States, without the permission of the authorized U.S. dealer. \nNumerous bills have been introduced in the 114th Congress that would ease the ability of individuals to import lower-cost prescription drugs from foreign jurisdictions. None of these bills has been enacted. Each bill would allow individuals to import drugs from foreign jurisdictions, although the bills differ on the jurisdictions from which imports would be permissible. Some bills are restricted to Canada; some to a set of specifically named jurisdictions; while others potentially apply to any foreign country. \nNone of these bills addresses intellectual property issues that may arise through parallel importation. However, many prescription drugs are subject to patent rights in the United States. In its 2016 decision in Lexmark International v. Impression Products, Inc., the U.S. Court of Appeals for the Federal Circuit confirmed that the owner of a U.S. patent may prevent imports of patented goods, even in circumstances where the patent holder itself sold those goods outside the United States. The Lexmark opinion squarely declined to extend the \u201cexhaustion\u201d doctrine\u2014under which patent rights in a product are spent upon the patent owner\u2019s first sale of the patented product\u2014to sales that occurred in foreign countries. The court\u2019s ruling will in some cases allow brand-name pharmaceutical firms to block the unauthorized parallel importation of prescription drugs through use of their patent rights.\nIn addition to any patent rights they possess, brand-name drug companies may place label licenses on their medications. A label license may be drafted in order to restrict use of a drug to the jurisdiction in which it was sold. As a result, in addition to a charge of patent infringement, an unauthorized parallel importer may potentially face liability for breach of contract.\nIntroduction of an \u201cinternational exhaustion\u201d rule restricted to pharmaceuticals does not appear to be restricted by the provisions of the so-called TRIPS Agreement, which is the component of the World Trade Organization (WTO) agreements concerning intellectual property. Another possible legislative response is the immunization of specific individuals, such as pharmacies or importers, from patent infringement liability. Alternatively, no legislative action need be taken if the current possibility of an infringement action against unauthorized importers of patented pharmaceuticals is deemed satisfactory.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R44640", "sha1": "38774f0703429413d9e62ea85973c8932afcf7af", "filename": "files/20161004_R44640_38774f0703429413d9e62ea85973c8932afcf7af.html", "images": null }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R44640", "sha1": "357be6cf70ca4479d742ab50f3e5b8a1d11ab46a", "filename": "files/20161004_R44640_357be6cf70ca4479d742ab50f3e5b8a1d11ab46a.pdf", "images": null } ], "topics": [] }, { "source": "EveryCRSReport.com", "id": 456021, "date": "2016-09-23", "retrieved": "2016-09-30T17:25:34.620374", "title": "March-In Rights Under the Bayh-Dole Act", "summary": "Congress approved the Bayh-Dole Act, P.L. 96-517, in order to address concerns about the commercialization of technology developed with public funds. This 1980 legislation awards title to inventions made with federal government support if the contractor consists of a small business, a university, or other nonprofit institution. A subsequent presidential memorandum extended this policy to all federal government contractors. As a result, the contractor may obtain a patent on its invention, providing it an exclusive right in the invention during the patent\u2019s term. The Bayh-Dole Act endeavors to use patent ownership as an incentive for private sector development and commercialization of federally funded research and development (R&D).\nThe federal government retains certain rights in inventions produced with its financial assistance under the Bayh-Dole Act. The government retains a \u201cnonexclusive, nontransferable, irrevocable, paid-up license\u201d for its own benefit. The Bayh-Dole Act also provides federal agencies with \u201cmarch-in rights,\u201d codified at 35 U.S.C. \u00a7203. March-in rights allow the government, in specified circumstances, to require the contractor or successors in title to the patent to grant a \u201cnonexclusive, partially exclusive, or exclusive license\u201d to a \u201cresponsible applicant or applicants.\u201d If the patent owner refuses to do so, the government may grant the license itself.\nNo federal agency has ever exercised its power to march in and license patent rights to others. In particular, the National Institutes of Health (NIH) has received six march-in petitions and has denied each one. A 2016 exchange of correspondence between Members of Congress and the Department of Health and Human Services suggests a difference of views related to agency authority under the march-in provision. Supporters of the use of march-in rights assert that they provide an unused mechanism for combatting high drug prices and ensuring that U.S. citizens enjoy the benefits of public R&D funding. Others assert that march-in rights do not provide such a broad authority, but rather are limited to four circumstances identified in the statute. They are also concerned that use of march-in rights might discourage private investment in the often considerable effort needed to bring early-stage technologies to the marketplace.\nCongress possesses a number of options with respect to march-in rights. If the current situation is deemed acceptable, then no action need be taken. Congress could also consider amending the Bayh-Dole Act by specifying in greater detail the precise circumstances in which march-in rights should be exercised. Congress may also take such steps as transferring authority over the administration of march-in rights, requiring government contractors to submit periodic reports regarding the commercialization of inventions achieved through public funding, creating a centralized database of inventions subject to the Bayh-Dole Act, and taking steps to ensure that patents on inventions developed through government funding are licensed to the most capable enterprise.", "type": "CRS Report", "typeId": "REPORTS", "active": true, "formats": [ { "format": "HTML", "encoding": "utf-8", "url": "http://www.crs.gov/Reports/R44640", "sha1": "8ed7bcdc2091d75b23d9579d0a794eb633b5ddc0", "filename": "files/20160923_R44640_8ed7bcdc2091d75b23d9579d0a794eb633b5ddc0.html", "images": null }, { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/R44640", "sha1": "96ad540b07adc3e21016b6939ef1eb06a4efa4ba", "filename": "files/20160923_R44640_96ad540b07adc3e21016b6939ef1eb06a4efa4ba.pdf", "images": null } ], "topics": [] } ], "topics": [ "Economic Policy", "Foreign Affairs", "Health Policy" ] }