[Ip-health] KEI, UCT Request Obama Administration End Monopoly on Expensive, Federally-Funded Prostate Cancer Drug

Zack Struver zack.struver at keionline.org
Thu Jan 14 10:30:19 PST 2016

Press Release

14 January 2015

CONTACT: Zack Struver
zack.struver at keionline.org

Knowledge Ecology International and Union for Affordable Cancer Treatment
ask Obama Administration to end monopoly on expensive prostate cancer drug
(Xtandi) invented on Government Grants. Petition asked government to use so
called “March­In rights on 3 NIH and DoD funded patented inventions.

The petition is available here:

Washington, DC, Jan. 14, 2015 — Knowledge Ecology International (KEI) and
the Union for Affordable Cancer Treatment (UACT) petitioned United States
government agencies today to protect patients and authorize the generic
production of an expensive prostate cancer drug that is still under patent,
but was developed with federal funds.

The drug, enzalutamide, was developed at UCLA under National Institutes of
Health and Department of Defense grants, and is marketed by the
Japanese-owned company Astellas, under the brand name Xtandi. The drug is
sold in capsules or tablets of 40 mg at an average wholesale price of
$88.48 per capsule, which works out to $129,269 per year ($88.48 x 4 times
per day x 365.25 days).

Astellas charges much lower prices for Xtandi in all other countries. The
petition cites prices from 10 other high income countries. Prices are 2.5
to 4 times higher in the United States on this government funded invention
than in any of those 10 high income countries. Astellas sells Xtandi in
Japan for less than one-third the U.S. price.

Background information, including historical context, statutory analysis,
and information on enzalutamide and prostate cancer, is available at the
end of this press release.

The two patient advocacy groups, both of which advocate for access to
affordable drugs and the reform of intellectual property rules, asked the
Department of Health and Human Services, the National Institutes of Health,
and the Department of Defense to exercise their “march-in” rights on

Under the Bayh-Dole Act of 1980, federal agencies and departments have
“march-in” authority to grant nonexclusive, royalty-free licenses on
patents that were supported with federal grants. Both the National
Institutes of Health and the Department of Defense contributed to the
development of enzalutamide at the University of California, Los Angeles.
Their grants funded two clinical trials that were used to obtain FDA
marketing approval for enzalutamide’s lead indications.

UCLA licensed the drug to Medivation, a small San Francisco
biopharmaceutical company. One of the chief inventors of enzalutamide, Dr.
Eric L. Sawyers, then a Professor at UCLA, had previously worked with the
founder of Medivation at the University of California, San Francisco. Dr.
Sawyers served on the Medivation Scientific Advisory Board and received
stock as compensation for his work. He is a recipient of the prestigious
Lasker Award.

Medivation later entered into a collaboration agreement with Astellas, a
Japanese pharmaceutical firm that markets the drug under the brand name
Xtandi. Medivation and Astellas share costs and revenues for the drug.

Spending on enzalutamide has steadily increased since entering the market;
Medicare spent $447 million on the drug in 2014, 93-percent more than in
2013, and Astellas projects sales of over $1 billion in the United States
for their FY2015 (April 1, 2015 - March 31, 2016). Sales to Medicare
accounted for 49-percent of global sales on enzalutamide in 2014, and
66-percent of U.S. sales. Overall, the United States accounted for
61-percent of the market in 2014.

“Astellas, a Japanese-owned drug company, is exploiting the weak response
of the United States to excessive pricing of drugs, and is charging U.S.
consumers and third-party payers roughly two to four times as much as the
prices in other high income countries,” the petition said.

Last week, over fifty members of Congress sent a letter to the NIH and the
Department of Health and Human Services requesting regulations that would
authorize the exercise of march-in in cases where patent holders set
excessive prices on drugs.

The following quote is attributable to James Love, Director of Knowledge
Ecology International, an expert on issues related to drug pricing,
intellectual property law, and pharmaceutical innovation policy:

“It is one thing for a company from Japan to take U.S. taxpayer-funded
medical research and earns billions in profits, and another to charge U.S.
residents three times as much a residents of Japan, for the same product.
But who can blame Astellas? It is the U.S. federal government who has
turned a blind eye to the abuses of drug pricing, and most inexcusable,
abuses of NIH (and in this case DoD) funded patent rights. We read in the
paper every day about drug pricing abuses, and government officials wishing
they could do something about them. Well, in this case, all the federal
government has to say is that the monopoly will end, if the prices are
excessive, and specifically in this case, if the U.S. is paying more than
everyone else. If U.S. residents continue to pay more than everyone else,
it is because the federal government wants that outcome, and will do
nothing to change it.”

The following quote is attributable to Dr. Ruth Lopert, an adjunct
professor in the Department of Health Policy & Management, Milken Institute
School of Public Health, The George Washington University, a member of the
Union for Affordable Cancer Treatment (UACT), and a former drugs regulator
at the Australian version of the FDA:

“The NIH has referred to the application of march-in rights as an
“extraordinary remedy." This begs the question of how egregious the
circumstances need to be for this federal agency to consider them
extraordinary enough for it to put into effect provisions that have been on
the statute books for over 35 years.”

The following quote is attributable to Professor Michael Davis, a cancer
patient, member of the Union for Affordable Cancer Treatment (UACT), and a
co-author of a paper on Bayh-Dole March-In rights, “Why Don't We Enforce
Existing Drug Price Controls? The Unrecognized and Unenforced Reasonable
Pricing Requirements Imposed upon Patents Deriving in Whole or in Part from
Federally Funded Research,” who teaches intellectual property law at the
Cleveland State University Cleveland-Marshall College of Law:

“For over thirty years my colleague Peter Arno and I have urged various
administrations to use the Bayh-Dole statute to reduce prices in government
funded pharmacological inventions. The NIH has statutory responsibility for
preventing abuses of patent rights in NIH funded inventions, but has
rejected every petition to do so, and for the very same misguided reasons.
First they say the legislature should do it. But the legislature has done
it! With the Bayh-Dole Act, Congress told the funding agency to make sure
drug prices are reasonable.

“The NIH has also tirelessly, and tiresomely, said they are not competent
to set prices. This petition does not ask the NIH to undertake complex
analysis, it asks the NIH to decide if it is reasonable for US residents to
pay more than everyone else, for inventions funded by our own tax dollars.
If the NIH is unwilling to make this call, it should ask for advice from
another agency in the federal government to do so. If the NIH thinks it is
hard to decide when a drug costs too much, consider the pain of paying too
much. And in this case, paying far more than everyone else. Today's
petition simply asks the NIH to do its legislative job, and enough with the
phoney excuses.”

Below is contact information for experts with experience in oncology
research and the Bayh-Dole Act, as well as for Medivation, Astellas, the
NIH, UCLA, and the DoD.

Additional Contact Information:

Astellas US
Tarsis Lopez
tarsis.lopez at astellas.com

info at medivation.com

National Institutes of Health
Office of Communications

Department of Defense
Press Operations Center

Office of Media Relations
media at support.ucla.edu

Professor Aaron Kesselheim
Harvard University
akesselheim at partners.org

Dr. Ruth Lopert
Union for Affordable Cancer Treatment
Department of Health Policy & Management, Milken Institute School of Public
Health, The George Washington University
ruth.lopert at gmail.com

Dr. Gilberto Lopes, MD, MBA, FMAS
Johns Hopkins University School of Medicine
glopes.md at gmail.com

Michael Davis
Cleveland-Marshall College of Law
m.davis at csuohio.edu

Background Information (alphabetical order):

Bayh-Dole Act

Congress passed the Bayh-Dole Act in 1980 (Public Law 96-517), when it was
signed into law by President Jimmy Carter. The law has been amended since
then and is codified at 35 U.S.C. Chapter 18 §§ 200-212, titled “Patent
Rights in Inventions Made With Federal Assistance.” Provisions in Chapter
18 are implemented by 37 CFR 401.14.

Bayh-Dole outlines the objectives of the grant of federal funds to support
commercial research and development, the policy of the United States
government in regards to the commercialization and availability of patented
inventions resulting from federal support, and the rights of the government
to license or manufacture such inventions.

The Act was designed to facilitate the patenting of U.S. government funded
inventions by universities, other non-profit entities, and businesses. It
“permits a university, business, or non-profit institution to elect to
pursue ownership of an invention in preference to the government holding
the title” (KEI, “Notes on the Bayh-Dole Act of 1980”).

KEI has extensive information on the Bayh-Dole Act and march-in requests


This includes links to various march-in requests, as well as:

Notes on the Bayh-Dole Act of 1980, http://keionline.org/bayh-dole-notes

For a regulatory and legislative history: Bayh-Dole Timeline,

Enzalutamide (Xtandi)

Enzalutamide is an androgen receptor-signaling inhibitor used to treat
metastatic castration resistant prostate cancer (mCRPC). It is marketed by
Astellas as Xtandi.

U.S. Statistics on Prostate Cancer[1]

Estimated new cases in 2015: 220,800

Percent of all new cancer cases: 13.3%

Estimated prevalence of cancer in 2012: 2,795,592

Estimated deaths in 2015: 27,540   (compare to 32

Percent of all cancer deaths: 4.7%

Third most common cancer.

Median age at diagnosis: 66 years

Lifetime Risk of Developing Cancer: Approximately 14.0 percent of men (more
than 1 in 7) will be diagnosed with prostate cancer at some point during
their lifetime, based on 2010-2012 data.

Number of New Cases and Deaths per 100,000: The number of new cases of
prostate cancer was 137.9 per 100,000 men per year. The number of deaths
was 21.4 per 100,000 men per year. These rates are age-adjusted and based
on 2008-2012 cases and deaths.

[1] Surveillance, Epidemiology, and End Results (SEER) Program (
www.seer.cancer.gov) Research Data (1973-2012), SEER Stat Fact Sheets:
Prostate Cancer, National Cancer Institute, DCCPS, Surveillance Research
Program, Surveillance Systems Branch, released April 2015, based on the
November 2014 submission. Accessed January 6, 2015.

Recent Press Coverage of Congressional March-In Request to NIH

Bronwyn Mixter, “House Democrats Form Task Force on Rx Drug Prices,”
Bloomberg BNA, Jan. 12, 2016.

Kimberly Leonard, “Can the Government Already Control Drug Prices?,” U.S.
News & World Report, Jan. 11, 2016.

Emily Wasserman, “Congressional reps urge the NIH to 'march in' on rising
drug prices,” FiercePharma, Jan. 11, 2016.

Michael Mezher, “Lawmakers Urge HHS to Exercise 'March-in' Rights to Fight
Higher Drug Costs,” Regulatory Affairs Professionals Society, Jan. 11,

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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