[Ip-health] Statnews: US Army license being awarded to Sanofi for a Zika vaccine raises questions

Jamie Love james.love at keionline.org
Thu Dec 22 15:03:03 PST 2016

This is Ed Silverman's story in Statnews on the Army's proposed license to
Sanofi of patents for a Zika virus vaccine.  As always, best to read the
​ story​
from the original web site, to support the authors and the publications.


I will make a couple of points
​ on the Statnews story. ​

​Ed reports that ​
 "A Sanofi Pasteur spokeswoman tells us that the vaccine maker has not yet
created a commercial plan and could not say what price may eventually be
charged or when the vaccine might become available."

Note that 35 USC 209(f) reads as follows:

(f) No Federal agency shall grant any license under a patent or patent
application on a federally owned invention unless the person requesting the
license has supplied the agency with a plan for development or marketing of
the invention, except that any such plan shall be treated by the Federal
agency as commercial and financial information obtained from a person and
privileged and confidential and not subject to disclosure under section 552
of title 5.

​So, if ​Sanofi has "not yet created a commercial plan" then the use of a
commercial license would appear to be in violation of 35 USC 209(f).

Second, Sanofi says "the company expects to ask BARDA for more funding​"
for the development of the vaccine.  So if BARDA is in fact financing the
trials and other development costs, then it is hard to see how an exclusive
license can pass this test, in 35 USC 209(a), for federally owned patents,
since "calling forth the investment capital" seems to involve asking BARDA
to fund the development of the vaccine.

​35 USC 209( ​
)Authority.—A Federal agency may grant an exclusive or partially exclusive
license on a federally owned invention under section 207(a)(2) only i

(1)granting the license is a reasonable and necessary incentive to

call forth the investment capital and expenditures needed to bring the
invention to practical application; or
otherwise promote the invention’s utilization by the public;
the Federal agency finds that the public will be served by the granting of
the license, as indicated by the applicant’s intentions, plans, and ability
to bring the invention to practical application or otherwise promote the
invention’s utilization by the public, and that the proposed scope of
exclusivity is not greater than reasonably necessary to provide the
incentive for bringing the invention to practical application, as proposed
by the applicant, or otherwise to promote the invention’s utilization by
the public;

Third, the vaccine will probably also be protected by the rights in the
test data, to which Sanofi may claim rights to under the CRADA, although we
are still waiting for the Army to confirm some of these issues.


----------- here is the story from Statnews---------------------


US Army license being awarded to Sanofi for a Zika vaccine raises questions
By ED SILVERMAN @Pharmalot

DECEMBER 22, 2016

​A license that the Department of Defense plans to issue to Sanofi Pasteur
for a Zika virus vaccine is being questioned by an advocacy group over
concerns the product may be priced too high for many Americans, even though
it was developed with taxpayer funds. And the issue is being raised as
vaccine makers chase what some believe may become a lucrative market.

Here’s the backstory: On Dec. 9, the Army placed a brief notice in the
Federal Register indicating its intent to give an exclusive license to
Sanofi Pasteur, one of the world’s biggest vaccine makers and a unit of the
French pharmaceutical company. The move followed months of mounting alarm
among public health officials over the spread of Zika, the mosquito-borne
virus that can cause birth defects.

But the government has not disclosed specifics about the license. In fact,
there is little publicly available information about the budding
relationship between the government and the company, other than a recently
awarded $43.2 million grant from the Biomedical Advanced Research and
Development Authority and a co-development deal with the Walter Reed Army
Institute of Research.

And so, Knowledge Ecology International, a group that tracks access to
medicines, asked the Army Medical Research and Materiel Command for
information about the terms, such as how long the license would run, how
much the government has spent, royalty rates, and pricing. The advocacy
group made a point of citing federal law indicating exclusive licensing
should be made only to serve a public benefit.

“The federal government came up with the invention and did some trials and
gave money to the company,” said Jamie Love, who heads KEI, which suggested
the license should require pricing to be in line with other high-income
countries, limit exclusivity and disclose costs. “If it works and it turns
out there’s a huge need, people will want this vaccine, but you want it
available at an affordable price. And we think if the taxpayer pays for it,
the taxpayer shouldn’t get screwed.”

A Sanofi Pasteur spokeswoman tells us that the vaccine maker has not yet
created a commercial plan and could not say what price may eventually be
charged or when the vaccine might become available. Late-stage testing has
not begun. She did say the company expects to ask BARDA for more funding. A
spokeswoman for the Army Medical Research and Materiel Command declined to

This is only the latest example of concern over partnerships between
government agencies and the pharmaceutical industry in which Americans may
pay twice — as taxpayers and as patients — while a drug maker racks up
profits. KEI, in fact, has previously filed objections over such
arrangements, most recently involving a cancer treatment being developed —
with taxpayer funds — by Kite Pharma.

“The experience, so far, is that many licenses worked out with
government-owned intellectual property have not paid sufficient attention
to issues related to access and affordability of the eventual products,
either in the US or abroad,” said Aaron Kesselheim, an associate professor
of medicine at Harvard Medical School, who also heads the regulation,
therapeutics, and law program at Brigham & Women’s Hospital.

“A truly effective and safe Zika vaccine is a very important public health
need and would, I imagine, have a massive market both in the US and abroad.
Given that there should be a lot of demand for the government’s work, and
given their intent to execute an exclusive license, I would hope they’re
negotiating a license that keeps in mind the interests of taxpayers in
terms of ensuring widespread access and affordability,” he continued.

Indeed, the market potential could be huge — assuming widespread demand for
a vaccine emerges. Beyond the military, travelers from the US and other
high-income countries — whether tourists or those taking business trips —
would be expected to get vaccinated before visiting places where they may
contract the virus.

Yet it remains unclear the extent to which Zika has circulated in other
parts of the world.

“We have models that suggest there is no profitability for this vaccine,
and we have models that suggest it could be profitable,” Jon Heinrich,
associate vice president and project lead for Sanofi Pasteur, told STAT.
“Time will tell.”

Of course, Sanofi is not the only company pursuing such a vaccine.

The prospect of a blockbuster product has also tempted GlaxoSmithKline and
Takeda Pharmaceuticals, among others. But as Thomas Monath, chief
operations officer at NewLink Genetics, which is developing two Zika
vaccines, told The Wall Street Journal:  Zika “is the biggest opportunity
for a new vaccine that’s come along in my career, and I’ve been in vaccines
for 40 years.”

Ed Silverman can be reached at ed.silverman at statnews.com
Follow Ed on Twitter @Pharmalot ​

James Love.  Knowledge Ecology International
KEI DC tel: +1.202.332.2670 <(202)%20332-2670>, US Mobile: +1.202.361.3040
<(202)%20361-3040>, Geneva Mobile: +41.76.413.6584
<+41%2076%20413%2065%2084>, twitter.com/jamie_love

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