[Ip-health] Stat News: US taxpayers are funding a Zika vaccine. Let’s make sure US patients can afford it

Zack Struver zack.struver at keionline.org
Mon May 29 02:20:46 PDT 2017



US taxpayers are funding a Zika vaccine. Let’s make sure US patients can
afford it

By ED SILVERMAN @Pharmalot MAY 29, 2017

Dear Acting Secretary Speer,

As you know, the United States must prepare for future outbreaks of the
Zika virus, but a high-stakes debate has erupted over a deal the federal
government may strike with a private company to develop a vaccine. As
acting secretary of the US Army, you have an opportunity ― and
responsibility ― to find a workable solution.

The issue is whether the company ― in this case, Sanofi Pasteur ―should be
required to make the vaccine, which is based on technology discovered with
US taxpayer funds, affordable for Americans in return for an exclusive
license to develop it into a commercial product.

I understand there are risks, but you should find a way to ensure that
Americans do not overpay.

Here’s the back story: Last year, the government gave Sanofi, which is one
of the world’s largest vaccine makers, a $43 million grant. Another $130
million may follow as research continues. The Army also disclosed plans to
award Sanofi an exclusive license to a pair of patents that are crucial to
the vaccine.

But this move upset some lawmakers and patient advocates, who fear the deal
will give the company  a monopoly to exploit ― and might lead Sanofi to
jack up prices for American consumers, assuming the virus spreads and
vaccines actually become a big market.

The backdrop to such concerns is the larger controversy over the rising
cost of prescription medicines, a problem that has upset many Americans,
prompted a flurry of legislation, and put the pharmaceutical industry on
the defensive.

​Sanofi, which is already under fire over its insulin pricing, is well
aware of the problem. Earlier this month, the company sought to deflect
criticism ― and mounting negative publicity ― by vowing to limit price
hikes for its medicines to a level at or below the rate of medical
inflation in the US.

But an advocacy group, Knowledge Ecology International, argued Sanofi
cannot be trusted and pointed to pricing for its Aubagio multiple sclerosis
drug. Americans using a coupon can pay about $6,100 for a month’s supply ―
which is seven times more than patients pay in France and at least four
times the price in the UK, Ireland, and Australia. A Sanofi spokeswoman
says prices vary due to circumstances in each country.

This is why Senator Bernie Sanders and others maintain the Army should push
Sanofi for fair pricing on the Zika vaccine. They want a guarantee that
Americans would pay a price comparable to what other countries are charged.
But as you know, Secretary Speer, Sanofi rejected such a request from your
staff last month.

Drug makers generally avoid discussing pricing decisions in advance and
Sanofi is no exception. In this case, the company has noted the vaccine
doesn’t even exist yet.

A Sanofi executive offered further insight in a letter to a House
subcommittee last week. “Given the high risk nature of vaccine development
and unpredictability for diseases like Zika, if the US government changes
its historic approach to licensing terms, it could undermine the intent of
these types of collaborations,” wrote Adam Gluck, who heads US government
relations for the drug maker.

In other words, if a company is forced to agree to certain pricing
constraints in advance, it may not bother working with the government to
develop such vaccines in the first place.​

Indeed, this risk that companies might respond in this way has long worried
government officials. In 1995, in fact, the National Institutes of Health
removed what was called a “reasonable pricing” clause from research
agreements with companies. At the time, former NIH director Dr. Harold
Varmus described such clauses as a “restraint” on new product development.

“What companies don’t like is additional uncertainty for commercial
considerations piled on top of the inherent risk of doing drug
development,” said Genia Long, a senior advisor at Analysis Group, an
economic and strategic consulting firm. “If the federal government is going
to insert pricing considerations, it might affect their willingness to
enter into such agreements.”

I understand that such notions may give your negotiating team second
thoughts. Playing hardball in a situation where public health is at stake
is not easy.

But while you may be worried that Sanofi could walk away if pressed too
hard on pricing, consider that the company also has something to lose ― it
would be turning its back on a potentially money-making vaccine that can be
sold in numerous markets around the world.

In an era of rising drug costs ― an issue that your boss has insisted must
be solved ― you have an opportunity to ensure that tax dollars spent
subsidizing research provide a return on investment that benefits all

Zack Struver, Communications and Research Associate
Knowledge Ecology International
zack.struver at keionline.org
Twitter: @zstruver <https://twitter.com/zstruver>
Office: +1 (202) 332-2670 Cell: +1 (914) 582-1428

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