[Ip-health] KEI asks HHS to use Bayh-Dole rights in Zinbryta patent (drug for multiple sclerosis)

Claire Cassedy claire.cassedy at keionline.org
Thu Sep 14 11:54:38 PDT 2017


KEI asks HHS to use Bayh-Dole rights in Zinbryta patent (drug for multiple

Submitted by KEI Staff on 14. September 2017 - 12:30

Attached is a letter sent on September 14, 2017 to Andrew Bremberg, an
Assistant to the President and the Director of the Domestic Policy Council
at the White House, and Keagan Lenihan, a Senior Adviser to HHS Secretary
Tom Price, regarding Zinbrytra (INN: daclizumab), a drug to approved by the
FDA to treat multiple sclerosis. (PDF version here [1])

This is an older drug, and the NIH obtained a patent on its use to treat
multiple sclerosis, and licensed the patent on a exclusive basis to Biogen.
Biogen and Abbvie market the drug around the world. The price in the United
States is more than $96,000 per year ($7390 every 4 weeks), but far lower
in every high income country where KEI obtained prices.

The letter asks DHHS to use one or more of three federal rights in the NIH
licensed patent to "authorize affordable competition, or to force Biogen to
lower its price." The three actions include using the royalty free right in
the patent, exercising march-in rights, or terminating the license. The
option to terminate the license is featured in the letter, and it is an
action that KEI had not focused on previously.

The termination clause is something the U.S. government can do with
government owned patents, including any owned by the NIH.

Below is an excerpt from the beginning and another excerpt from the end of
the letter.

"We write to you today with regard to the excessive price of an important
drug for multiple sclerosis called daclizumab, co-marketed by Biogen and
AbbVie as Zinbryta at prices roughly 3 to 4 times higher in the United
States than in other high income countries. The patent for Zinbryta was
licensed from the NIH, and under the Bayh-Dole Act there are three specific
actions the United States government can and should utilize to authorize
affordable competition, or to force Biogen to lower its price. These
include: (1) making use of the government’s royalty-free rights in the
patent; (2) utilizing the “march-in” right to license the patent to a third
party; and/or (3) terminating the exclusive license.

Amidst a crisis of out-of-control drug prices, this is an instance where
the federal government has the power to act without the need for any
additional statutory authority."


"The United States prices are 2.8 to 4.3 times higher than any of the
reference countries. The U.S. price is 2.8 times higher than Norway and
Denmark and 3.8 times higher than Switzerland, even though all three of
these countries have higher per capita incomes than the United States, and
the U.S. taxpayers funded the relevant discovery and own the patent.

There is no reason to accept a foreign price, even from a country of a
similar per capita income, as reasonable. But in our opinion, it is
unreasonable for Biogen/Abbvie to charge higher prices in the United States
than in other large economies with a per capita income at least 50 percent
of the United States.

In this case, prices in the U.S. are not only higher — they are 180 to 330
percent higher than every high income country where KEI could obtain
pricing data. The pricing of Zinbryta is contrary to statutory requirement
of the Bayh-Dole Act to make the inventions available to the public on
reasonable terms.

A failure by HHS to address the discrimination against U.S. residents in
pricing harms everyone who buys or reimburses the drugs, including all U.S.
taxpayers, all employers who pay for health benefits, and many persons
living with multiple sclerosis who face daunting co-payments, who are
underinsured, or who never get the drug because of its high cost.


We request that the Department of Health and Human Services use one or more
of the three options at its disposal under the Bayh Dole Act to lower
prices of this important MS drug, including:

(1) under 35 U.S.C. § 209(d)(1), utilizing the royalty-free license in the
government-owned patent to authorize generic competition;

(2) under 35 U.S.C. § 203(a), utilizing the “march-in” rights to license
the drug to a third party; or

(3) 35 U.S.C. § 209(d)(3), terminating the exclusive NIH license to
Abbott/Biogen on the ground that the company is failing to abide by its
obligation to make to invention “available to the public on reasonable

Specifically, this letter should be seen as request to exercise march-in
rights under 35 U.S.C. § 203(a), and/or to terminate the license under 35
U.S.C. § 209(d)(3), on the grounds that charging U.S. residents 2.8 to 4.3
times more than residents in other high income countries is on its face
unreasonable, and in violation of the requirement in 35 U.S.C. § 201(f) to
make the invention covered by the license “available to the public on
reasonable terms.” We also urge DHHS to use the royalty-free right in the
patents to exercise leverage and freedom to operate whenever it faces
challenges in implementing its section 203 or 209 rights.

We believe that terminating the exclusive license may be the best option,
because it will provide the most leverage and the most flexibility in terms
of obtaining alternative supplies of the product. But a credible threat to
use any of these three options will be sufficient to force Biogen and
AbbVie to lower its price of Zinbryta, at least to the prices that the
companies already charge in other countries with incomes similar to the
United States.

The Trump Administration has made numerous public pronouncements regarding
the need to fight high drug prices, a policy point supported by
overwhelming public opinion. In this instance, the government has all of
the leverage it needs to take strong, decisive action to benefit multiple
sclerosis patients, consumers, and taxpayers.

We request a meeting at your earliest convenience to discuss this matter


More information about the Ip-health mailing list