The Biden administration is sending a warning to pharmaceutical companies, stating that if they set prices for specific drugs at an unreasonable level, the government reserves the right to revoke their patent protection and permit competitors to produce their own versions.

According to a proposal revealed on Thursday, the government would potentially supersede the patent for expensive medications that were created using public funds, allowing other companies to produce them and potentially lowering the price.

President Joe Biden announced in a 15-second YouTube video on Wednesday evening that the decision would result in reduced prices.

“Today, we are making a significant move to combat price gouging and ensure that you do not have to pay inflated prices for necessary medication,” he stated.

White House officials would not name drugs that might potentially be targeted. The government would consider seizing a patent if a drug is only available to a “narrow set of consumers,” according to the proposal that will be open to public comment for 60 days. Drugmakers are almost certain to challenge the plan in court if it is enacted.

The most recent proposal on health policy comes from the White House, which is focused on making their efforts to address the issue of high drug prices a major aspect of their reelection campaign next year. In addition, the administration issued a warning to private equity firms on Thursday, cautioning them against purchasing and dismantling hospitals and medical practices for financial gain.

Biden has been proudly promoting his achievement of implementing a $35 limit on insulin costs for those enrolled in Medicare, which was passed into law last year. He also introduced a proposal for government officials to negotiate drug prices paid by Medicare, which is a first-time occurrence.

The government of Washington has recently taken a bold action against the patenting of drugs, known as “march-in rights.” This measure allows federal agencies to intervene if the government has provided funding for the research or development of the drug.

Pharmaceutical companies have long relied on government research to develop drugs, with the most recent major breakthrough being the COVID-19 vaccines and treatments. U.S. taxpayers spent billions on the effort and were able, until recently, to access treatments and preventions for the virus without paying out-of-pocket for them.

According to Jing Luo, a professor at the University of Pittsburgh, although only a small number of medications heavily relied on funding from taxpayers, the possibility of the government intervening on patents may cause pharmaceutical companies to reconsider their actions.

Luo stated that as a pharmaceutical company seeking to obtain a license for a product that had received significant funding from taxpayers, they would be cautious in determining its price. They would not want their product to be taken away from them.

The pharmaceutical industry quickly opposed Biden’s statement, stating that the White House’s understanding of the law is incorrect and their proposal will hinder the progress of drug research and development.

Megan Van Etten, a representative of the Pharmaceutical Research and Manufacturers of America (PhRMA), stated that this would be a further detriment to American patients who heavily depend on the partnership between the public and private sectors to progress in developing new remedies and remedies.

There has been ongoing discussion about the potential use of “march-in rights” by the government, with some Democratic politicians such as Senators Elizabeth Warren and Amy Klobuchar urging the Health and Human Services Department to take control of patents for expensive medications. However, the National Institutes of Health recently declined to do so for the drug Xtandi, used for treating prostate cancer.

Klobuchar stated that Americans should not be burdened with exorbitant medication costs while pharmaceutical companies reap significant profits, particularly when those medications were created using taxpayer funds.

According to William Pierce, a former official at the Department of Health and Human Services during President George W. Bush’s administration, the proposal poses a valid question: What compensation should be given to taxpayers who contribute to funding this product?

The White House plans to prioritize monitoring of private equity firms that acquire hospitals and health systems, often resulting in downsizing and rapid resale for financial gain. The Department of Justice, Department of Health and Human Services, and the Federal Trade Commission will collaborate to exchange information on health system ownership.

According to Yashaswini Singh, a professor of health care economics at Brown University in Providence, Rhode Island, private equity firms are involved in all aspects of health care, including fertility care, primary care, and nursing homes. This widespread presence has not been fully reported or disclosed to antitrust authorities.