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March 8 — A congressman March 7 urged the HHS to exercise its rights to license generic versions of Astellas Pharma Inc.'s prostate cancer drug Xtandi after it rejected a related request by House Democrats.
Rep. Lloyd Doggett (D-Texas) and 50 members of the House Affordable Drug Pricing Task Force had written Department of Health and Human Services Secretary Sylvia M. Burwell on Jan. 14, asking that the National Institutes of Health use its march-in rights under the Bayh-Dole Act, 35 U.S.C. §203, to license certain drugs to third parties and to establish guidelines for use of these rights .
Four days later, Knowledge Ecology International (KEI) and the Union for Affordable Cancer Treatment (UACT) petitioned the NIH and the Department of Defense to use their royalty-free rights in the patents covering Xtandi, which costs $129,000 a year in the U.S., or to exercise “march-in” rights .
Burwell responded on March 2 that “the NIH considers the application of the march-in rights statute on a case-by-case basis.” She added, “After consulting with the NIH, we believe the statutory criteria are specifically clear and additional guidance is not needed.”
Doggett issued a statement in reaction to Burwell's letter, saying, “When Americans pay for research that results in a pharmaceutical, that drug should be available at a reasonable price. While establishing guidance to discourage widespread price gouging is clearly justified, I am pleased that the Administration is prepared to use existing authority on a case-by-case basis to address this problem. It should do so immediately by responding favorably to the pending petition for Xtandi, which taxpayers funded through U.S. Army and NIH grants.”
Doggett added, “An unaffordable drug is 100 percent ineffective. Americans shouldn’t have to choose between their lives and their livelihoods on this and many other outrageously priced pharmaceuticals.”
The odds in favor of the NIH granting KEI and the UACT's petition aren't good. The NIH and/or the HHS have received five march-in petitions since the Bayh-Dole Act became law in 1980 and have rejected all five.
The 1980 Amendments to the Patent and Trademark Act (Pub. L. No. 96-517), commonly referred to as the Bayh-Dole Act after its two main sponsors, lets nonprofit institutions and small businesses acquire patent rights to certain inventions arising out of government-sponsored research and development to encourage the commercialization of new technologies through cooperative ventures. It retains for the federal government the right to license the patents royalty-free for government use.
It also allows any “responsible applicant” to request march-in rights, which empower the federal agency funding the research to “march in” and issue patent licenses on its own when the holder of a patent that resulted from the research isn't “reasonably” satisfying U.S. health or safety needs.
The KEI and UACT petition said that Astellas Pharma, a Japanese company that has a sublicense in the patents owned by the University of California at Los Angeles and licensed to Medivation Inc., “is exploiting the weak response of the United States to excessive pricing of drugs, and is charging U.S. consumers and third party payers roughly two to four times as much as the prices in other high income countries.”
The petitioners further asked the U.S. “to adopt the policy that the federal government will use its royalty free rights, or grant licenses under federal march-in rights, when prices in the United States are excessive, and/or higher than they are in high income foreign countries, and to apply that policy in this case for patents on enzalutamide,” the active ingredient in Xtandi.
KEI and UACT said all three inventions covered by the patents at issue—U.S. Patent Nos. 7,709,517, 8,183,274 and 9,126,941—were developed under grants from the NIH and the Department of Defense, which would allow the government to exercise march-in rights under Bayh-Dole.
Burwell wrote in her March 2 letter that NIH “is prepared to use its authority where the statutory criteria are not met regarding the commercialization and use of any NIH-funded patented invention and where march-in rights could in fact alleviate health and safety needs or address a situation where effective steps are not being taken to achieve practical application of the inventions.”
James Love, KEI's director, noted in response to Burwell's letter, “[R]ight now the price of Xtandi in France, Japan and Sweden is 30-percent of the $129,000 per year U.S. price, and the price in Canada is 23-percent of the U.S. price. The extraordinarily high price of Xtandi in the United States is very costly for Medicare, for patients and for insurers.”
Love added, “There has been a lot of talk from politicians about how they wish they could take action to lower drug prices. This is a case of excessive pricing where the only thing holding back the administration is itself.”
An Astellas spokesman told Bloomberg BNA in a Jan. 14 e-mail that the company believes the price of medicines should reflect the innovation and patient benefit provided and that it offers programs to offset or alleviate costs to eligible patients.
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Doggett's comments can be found at http://keionline.org/node/2442.
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