[Ip-health] Updated notes from October 15, 2018 hearing on the KEI v NIH lawsuit over the Gilead CAR T patent license

James Love james.love at keionline.org
Tue Oct 16 09:29:06 PDT 2018


I added more to yesterday's blog about  the NIH lawsuit, to provide more
context for persons who have not followed the issue.  The revised blog
concludes with these two paragraphs, highlighting perhaps the most
important element of the dispute.

Jamie

* If KEI ever gets a truly independent review of the NIH decision on the
Gilead license, it will explore, among other issues, if "the proposed scope
of exclusivity is not greater than reasonably necessary to provide the
incentive for bringing the invention to practical application," which is a
requirement of 35 U.S.C. § 209.

* Two CAR T technologies, each originally funded by and in one case
licensed from the NIH, were recently sold for $9 to $12 billion. The fact
that the NIH has funded this CAR T therapy through a 79 patient Phase I
trial (NCT03049449), and the Novartis CAR T treatment Kymriah was approved
on the basis of evidence from 63 patients, suggests to KEI that a term less
than the life of the patent would be required by the statute, given the
plain language of 35 U.S.C. § 209.


https://www.keionline.org/29116

Notes from October 15, 2018 hearing on the KEI v NIH lawsuit over the
Gilead CAR T patent license

On Monday, October 15, 2018, Judge Peter J. Messitte of the United States
District Court, District of Maryland, convened a hearing on a motion by the
NIH to dismiss a lawsuit (Case 8:18-cv-01130-PJM) by KEI regarding the
decision by the NIH to grant an exclusive license on CD30 protean CAR T
patents to Gilead Sciences (via the Kite Pharma subsidiary). The various
pleadings in the case are available here:
https://www.keionline.org/kei-v-nih.

The NIH had decided that KEI did not have the right to an administrative
appeal of the NIH decision to grant the patent licenses to Gilead, and had
asked the judge to dismiss our lawsuit on the the grounds that KEI lacked
standing to sue the NIH over the license to Gilead.

The KEI lawsuit seeks to establish KEI’s right to have the NIH consider our
administrative appeal (it was denied before it was even filed), as well as
to determine if the NIH was subject to 40 USC § 559, which provides that an
“executive agency shall not dispose of property to a private interest until
the agency has received the advice of the Attorney General on whether the
disposal to a private interest would tend to create or maintain a situation
inconsistent with antitrust law.”

At issue is the decision by the NIH to grant an exclusive license on
patented inventions to Gilead, for a development of an “Anti-CD30 Chimeric
Antigen Receptor (CAR) for the treatment of human cancer” including in
particular Hodgkin lymphoma (HL), Non-Hodgkin’s Lymphoma (NHL), diffuse
large B cell lymphoma (DLBCL), peripheral T cell lymphoma not otherwise
specified (PTCL-NOS), anaplastic large cell lymphoma (ALCL), and
angioimmunoblastic T cell lymphoma (AITL). (Federal Register notice here.)

KEI’s original objection to the Gilead license raised the following four
issues:

1. It is premature to grant an exclusive license, given the fact that the
NIH is funding a large Phase 1 trial on the technology the NIH is licensing.

2. If the NIH grants an exclusive license, it should include clear
safeguards in the license to protect U.S. residents from excessive prices
and access barriers. Among the measures proposed to protect U.S. residents
on pricing was a proposed reference pricing cap to ensure U.S. residents
don’t pay more than residents of high income countries with large GDPs, and
that exclusivity is terminated when revenues exceed $300 million for each
approved FDA indication, or $1 billion for all indications.

3. The NIH should protect patients in countries with per capita incomes
that are less than one third of U.S. per capita income.

4. The NIH should require transparency in regards to R&D outlays.

KEI’s administrative appeal, which the NIH refused to consider, addressed
our original concerns and refuted points made by Dr. Lambertson on behalf
of NCI, which included assertions that (1) an exclusive license would not
create a monopoly, (2) the license had to proceed immediately, prior to the
NIH having any results from the Phase 1 trial the NIH is currently funding,
because NIH/NCI did not have the budget to conduct Phase 2 and 3 clinical
trials, (3) that safeguards against excessive pricing and access barriers
would not be included because they have not been used by NIH for years, and
(4) certain regulations prevent the NIH from requiring transparency of R&D
costs.

The KEI administrative appeal raised additional issues regarding the
admitted refusal of NIH to adhere to 40 U.S.C. § 559, which requires that
any federal agency disposing of federal property — including patents — must
seek and obtain the antitrust advice of the Attorney General prior to the
disposal to private interests. The statute is part of the Federal Property
and Administrative Services Act, which governs government procurement,
utilization and disposal of property.

The October 15, 2018 hearing was held by Judge Peter J. Messitte. Judge
Messitte spent considerable time questioning the Department of Justice
lawyer regarding its objections to our standing, but also on the NIH’s own
process for administrative appeals, which are not set out by regulation.

The NIH failed to have our suit dismissed, at least for now, and Judge
Messittee ordered briefing on the following question(s):

(1) as a matter of administrative law (i.e. court decisions reviewing
actions by government agencies in general, not just the statutes and
regulations directly applicable to NIH), was KEI entitled to a hearing on
either or both (a) its objections to the NIH’s decision to issue the
license and (b) the NIH’s refusal to consider KEI’s appeal; and,

(2) if not, does that procedure violate KEI’s constitutional right to due
process?

KEI was represented at the hearing by Daniel Doty.

If KEI ever gets a truly independent review of the NIH decision on the
Gilead license, it will explore, among other issues, if "the proposed scope
of exclusivity is not greater than reasonably necessary to provide the
incentive for bringing the invention to practical application," which is a
requirement of 35 U.S.C. § 209.

Two CAR T technologies, each originally funded by and in one case licensed
from the NIH, were recently sold for $9 to $12 billion. The fact that the
NIH has funded this CAR T therapy through a 79 patient Phase I trial
(NCT03049449), and the Novartis CAR T treatment Kymriah was approved on the
basis of evidence from 63 patients, suggests to KEI that a term less than
the life of the patent would be required by the statute, given the plain
language of 35 U.S.C. § 209.


More information about the Ip-health mailing list