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June 21 — The NIH's decision not to use its authority to allow generics of Astellas's prostate cancer drug Xtandi ignores evidence that high prices in effect can make a drug unavailable, a nonprofit group said.
The National Institutes of Health June 20 denied a petition from Knowledge Ecology International (KEI) and another nonprofit that the agency exercise its “march-in” rights under the Bayh-Dole Act, which would let companies other than the patent owner make and sell copies of a patented drug.
The decision shows continued government reluctance to exert this authority and that, so far, filing such petitions in an effort to control drug prices has been unsuccessful.
KEI and the Union for Affordable Cancer Treatment (UACT) petitioned the NIH and the Department of Defense (DOD) on Jan. 14 to use their royalty-free rights in the patents covering Xtandi (enzalutamide), which costs $129,000 a year in the U.S., or to exercise their march-in rights under Bayh-Dole (10 LSLR 02, 1/22/16).
But NIH Director Francis S. Collins wrote KEI that it had provided “no information and no information was available from public sources to suggest that enzalutamide is currently or will be in short supply,” which could justify government intervention.
The Biotechnology Innovation Organization told Bloomberg BNA in a June 21 e-mail that if the NIH were to exercise its march-in authority to control the price of a drug, it would chill innovation and divert resources.
Zack Struver, KEI communications and research associate, told Bloomberg BNA in a June 20 e-mail that Collins's letter ignored “evidence we provided that Xtandi was not ‘available to the public on reasonable terms' because of its excessive price, which led to restricted access for U.S. patients.”
The letter also ignored the fact that a shortage “is not the only justification for the NIH to use march-in rights under federal law. Director Collins' letter didn't address the use of the royalty-free license, which can be used without justification,” Struver said.
He also reported that KEI plans to appeal the NIH ruling to the Department of Health and Human Services, of which the NIH is a part, and to re-file the petition with the next administration if the HHS declines to act.
Astellas said in a June 20 statement that it is pleased the NIH has concluded that Xtandi is broadly available to patients and that it is focused on providing affordable access for innovative medicines that address the unmet medical needs of patients around the world.
The nonprofits' Jan. 14 petition came amid a growing concern among insurers, hospitals, physicians and patients about the high cost of drugs.
KEI and UACT filed their petition three days after House Democrats had similarly urged the NIH to use its march-in rights to make Xtandi more widely available (10 LSLR 02, 1/22/16).
The Bayh-Dole Act (Pub. L. No. 96-517) allowed universities, small businesses and nonprofit institutions to elect to pursue ownership of an invention developed using federal government funding. The law has been credited with helping to fuel the growth of biotechnology.
Xtandi was developed at the University of California, Los Angeles, with grants from the NIH and the DOD. UCLA exercised its rights under Bayh-Dole and then licensed the drug to Medivation, which licensed it to Astellas.
Bayh-Dole 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 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.
To date, the NIH and HHS have denied all six of the petitions they've received to exercise their “march-in” rights.
A BIO spokesman told Bloomberg BNA that BIO was pleased that the NIH once again reiterated its long-held position that attempting to control the price of a drug isn't an appropriate use of march-in authority.
“To do so would chill the university-industry technology transfer system that has been so successful in advancing innovation and benefiting patients and consumers. Companies and investors will not risk taking licenses to federally-funded inventions if, after successful development, approval, and commercialization of products, a federal agency can ‘second-guess' their pricing decisions and allow competitors to free-ride on their substantial investment of time and resources,” he said.
In response to the Jan. 11 request from House Democrats that the NIH exercise its march-in rights, a BIO spokeswoman said in a statement that, if the NIH acted, it would “disrupt the biopharmaceutical innovation ecosystem with intrusive government intervention,” “would require NIH to divert resources into tasks it is not designed to do, and would also create tremendous uncertainty in the technology transfer process.”
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The NIH's letter is at http://keionline.org/sites/default/files/Final-Response-Goldman-6.20.2016.pdf.
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