[Ip-health] Pharmalot/Stat: NIH rejects petition to override patent on pricey prostate cancer drug

Zack Struver zack.struver at keionline.org
Mon Jun 20 13:19:18 PDT 2016


​NIH rejects petition to override patent on pricey prostate cancer drug

By ED SILVERMAN @Pharmalot
JUNE 20, 2016

After five months of deliberation, the US National Institutes of Health on
Monday rejected a request by several consumer groups to override the patent
on a prostate cancer drug, because the medicine is more expensive in the
United States than elsewhere. And one of the consumer groups plans to seek
an appeal.

Last January, the groups petitioned the NIH to take this step, which is
known as a march-in right, to help US patients because federally funded
research was used to create Xtandi. The drug is sold by Astellas Pharma and
has an average wholesale price in the United States of more than $129,000,
about two to four times more than what other high-income countries are
paying, according to the consumer groups.

Under federal law, a march-in right allows an agency that funds private
research to require a drug maker to license its patent to another party in
order to “alleviate health and safety needs which are not being reasonably
satisfied” or when the benefits of a drug are not available on “reasonable
terms.” The drug was developed at the University of California, Los
Angeles, with grants from NIH and the US Department of Defense. The school
licensed the drug to Medivation, which struck a marketing deal with

However, the NIH denied the petition because there was no information to
suggest that Xtandi is or will be in short supply, according to a letter
sent on Monday by NIH Director Dr. Francis Collins to Knowledge Ecology
International, one of the consumer groups. The agency, which has rarely
granted such petitions, noted that the litmus test used in one previous
case was whether there were sufficient supplies of the medicine for which a
petition was sought.

In a statement, the consumer groups argued the NIH “did not evaluate
evidence provided that Astellas charges US residents prices that are far
higher than those available to non-US consumers, and that price
discrimination against US residents is not consistent with making the
product ‘available to the public on reasonable terms,’” as required by
federal law.

They also maintained the NIH failed to address evidence that “the
unreasonably high price for Xtandi limits patient access, places the drugs
on restrictive formularies, causes strain to health care budgets, and
requires patients to pay unreasonably high coinsurance and copayments,” all
of which justify the use of march-in rights.

They added that the NIH ignored its ability to issue a nonexclusive,
royalty-free license to allow Xtandi to be manufactured for use by the
federal government. Knowledge Ecology legal and policy counselor Andrew
Goldman said there is no precondition about supplies and that the
requirement for granting a march-in right does not include a limitation on
“excessive” prices.

“This is contrary to the legislative intent of the law, and sends a
terrible signal about the government’s willingness to confront the high
drug prices through available legal mechanisms,” he said.

The consumer group plans to submit an appeal to US Secretary of Health and
Human Services Sylvia Burwell and said it will base its appeal on the NIH’s
“flawed legal rationale” about the use of march-in rights and “its lack of
analysis concerning its refusal to use a royalty-free license.” The group
added that it plans to refile this case after a new president takes office
next year if the HHS declines its appeal.

As part of its effort, Knowledge Ecology two months ago solicited a
Biolyse, small Canadian drug company, to make Xtandi. The drug maker
maintained it could supply a version for $3 per 40-milligram tablet,
compared with the $69.41 that Medicare paid in 2014. Biolyse hoped to be
able to supply its version in three years. We left word with a company
spokesman and will pass along any reply.

An Astellas spokesman wrote us to say that the company is “pleased that the
NIH has concluded that Xtandi is broadly available to patients, and we are
committed to continuing our work with our diverse stakeholders to provide
patients with affordable access to our medicines.”

The rejection is not a surprise, though.

Two months ago, the Obama administration rejected a request from dozens of
congressional Democrats, who call themselves the Affordable Drug Pricing
Task Force, to develop guidelines that would require drug makers to license
their patents and put a lid on “price gouging.” They argued the NIH should
be more aggressively granting march-in rights in light of high medicines

At the time, Burwell noted such decisions are made on a case-by-case basis.
The NIH previously considered using its march-in authority concerning drug
pricing in 2004 and 2013, but determined statutory requirements were not
met. Two of those instances involved the Norvir AIDS medicine that was
marketed by Abbott Laboratories — now owned by AbbVie — and the Xalatan
glaucoma treatment sold by Pfizer.

In response, several lawmakers, including presidential aspirant Bernie
Sanders, said they would seek a hearing about NIH use of march-in rights,
but that never took place.​

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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