[Ip-health] Washington Post: Taxpayers helped fund this $129, 000 cancer drug. Should the government help cut the price?

Elizabeth Rajasingh elizabeth.rajasingh at keionline.org
Thu Jan 14 10:07:36 PST 2016


https://www.washingtonpost.com/news/wonk/wp/2016/01/14/
taxpayers-helped-fund-this-129000-cancer-drug-should-the-
government-help-cut-the-price/

Taxpayers helped fund this $129,000 cancer drug. Should the government help
cut the price?

By Carolyn Y. Johnson January 14 at 12:02 PM

Two nonprofit groups have petitioned the federal government to take actions
to increase the competition for a cancer drug that costs $129,269 a year by
exercising its right to step in if the fruits of taxpayer-funded research
are not "available to the public on reasonable terms," according to U.S.
law.

The "march-in" rights are a last-ditch loophole that allows the government
to intervene when inventions it helped create become inaccessible -- if
"action is necessary to alleviate health and safety needs which are not
being reasonably satisfied," the law states. The government essentially
reserves the right to license patents that were made possible by federal
funds to other companies in extreme circumstances -- potentially disrupting
a lucrative monopoly.

The letter sent Thursday by Knowledge Ecology International and the Union
for Affordable Cancer Treatment argues that the government should
"march-in" on Astellas Pharma prostate cancer drug, Xtandi. Three key
patents that cover the drug were granted to the University of California
and were made possible by grants from the National Institutes of Health and
the Department of Defense.

"In our opinion, it is unreasonable, and indeed outrageous, that prices are
higher in the United States than in foreign countries, for a drug invented
at UCLA using federal government grants," the petition states, furnishing
its own analysis of the difference in prices in the U.S. and other
developed countries.

The letter notes that while the U.S. average wholesale price of the drug --
a list price that doesn't take into account discounts or rebates that
manufacturers provide -- is $88.48 per 40 milligram capsule. In Japan, that
same pill costs $26.37, and in Norway it is $32.43.

Despite its considerable power, the National Institutes of Health has
declined five petitions requesting its march-in rights be used as an
antidote to high drug prices or shortage problems since the mid-1990s.

"Drug pricing and patient access are broad and challenging issues in the
United States," Francis Collins, the director of the NIH wrote in  November
2013 in deciding not to march-in on the patents underlying the HIV drug
Norvir, made by AbbVie. "The extraordinary remedy of march-in is not an
appropriate means of controlling prices of drugs broadly available to
physicians and patients."

Astellas' spokesman Tyler J. Marciniak said in an e-mail that the company
believes the price should reflect the innovation and benefit that drugs
provide to patients. He noted that the company is committed to preserving
access to drugs as well, using patient assistance programs to alleviate the
cost. He noted that Astellas and Medivation, the company that jointly
developed and commercialized the drug, had also made a "significant
investment and have taken significant risk" in bringing Xtandi to market.

"Every country has its own public health policies and medicine pricing
structures, and these can vary greatly. As a result, price differences do
exist across countries," Marciniak said. "Unlike many other countries,
pricing in the United States reflects diverse types of purchasers, health
insurance plans and funding systems."

The request comes days after members of Congress sent a letter to federal
health officials requesting that the federal government exercise its
"march-in" rights to deal with the general problem of high drug prices.

"While NIH has appropriately referred to march-in rights as an
'extraordinary remedy,' too many families and providers are facing an
extraordinary challenge from unreasonably priced pharmaceuticals," the
letter, led by Rep. Lloyd Doggett (D--Tex.), a senior member of the Ways
and Means Committee, said. "The failure to act in the past has undoubtedly
sent an unfortunate signal that prices for federally-funded inventions can
be set as high as a sick or dying consumer will pay."

The petition offers one such framework for how such decisions could be
made: when a drug is far more expensive in the U.S. than in other countries
with developed economies and high incomes.

The letter from Congress urges the development of guidelines that could
predictably inform pharmaceutical companies the terms under which they
would exercise their march-in rights.

While high drug prices have gained intense political and news scrutiny over
the past year, Holly Campbell, a spokeswoman for PhRMA, the drug industry's
trade group, said total spending on medicines has been "consistent" for
half a century. She urged greater focus on total health care spending and
specifically on health insurers.

"There also needs to be a greater focus on the critical challenge facing
patients: increasingly high cost sharing and additional restrictions on
access as a result of their health insurance coverage," Campbell said.

NIH spokeswoman Renate Myles said that the agency had received the letter
from Congress and would respond.

----
Elizabeth Rajasingh
Perls Research and Policy Fellow, Knowledge Ecology International
1621 Connecticut Ave. NW, Suite 500
Washington, DC 20009
*elizabeth.rajasingh at keionline.org <elizabeth.rajasingh at keionline.org>* |
 1-202-332-2670



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