[Ip-health] American taxpayers will be Alex Azars shareholders, let's hope he can serve them

Kim Treanor kim.treanor at keionline.org
Tue Dec 5 11:07:42 PST 2017


American taxpayers will be Alex Azar’s shareholders — let's hope he can
serve them
Kim Treanor in The Hill on 5 December 2017

As the Senate considers Alex Azar, former drug company executive and
lobbyist, to lead the Department of Health and Human Services, the crucial
question will be whether Azar is able to advocate for the interests of the
public in the same way that he advocated for the interests of Eli Lilly’s

In the public outrage and debate over high drug prices, policymakers often
fail to acknowledge the fact that U.S. taxpayers are the largest investors
into biomedical research and development. From discoveries in the labs of
the National Institutes of Health to university research financed by
federal grants, the public has an extensive financial interest in a wide
range of medical technologies.

Laws exist which are intended to protect the public’s investment. After an
initial discovery is made, the federal agency, university, or biotech firm
which owns the patent may decide to license it to a larger manufacturer who
will be responsible for clinical development and bringing the drug to

When the research which led to this patent was publicly funded, however,
the law stipulates that the licensee is responsible for making the
“benefits of the invention”, or the drug created, “available to the public
on reasonable terms.”

In practice, HHS has consistently failed to enforce this rule. The result
is not only that United States citizens pay the highest prices in the world
for medicines, but that they’re going bankrupt to pay for medicines they
technically already own.

Take the case of Zinbryta, an MS drug marketed by Biogen and AbbVie. The
patent on Zinbryta is owned by the federal government, but licensed out to
the private companies. These pharmaceutical companies charge Americans
$7,390 for a one month supply, a price two to four times higher than every
other high income country.

The government maintains rights in any drug developed with federal funds,
even when it does not own the patent. Probuphine, a highly effective
medication assisted treatment for opioid dependence, is protected by one
patent for a discovery made in the course of research financed by the
National Institute of Mental Health.

Despite the fact that the government has rights in this treatment, the cost
to patients can be $4,000 to $6,000 for a six month supply. The result is
that the medication remains inaccessible to patients without insurance,
while many insurance companies fail to cover Probuphine as a first line

The case is similar for Spinraza, the $750,000 treatment for spinal
muscular atrophy, Kymerah, the $475,000 treatment for B-cell acute
lymphoblastic leukemia, and Xtandi, a medicine for prostate cancer which
costs more than $380 a day in the US but only $80 to $144 a day in other
wealthy countries. For all of these drugs, U.S. taxpayers have invested in
their development and have rights in the patents on these treatments. Will
Alex Azar use his authority as the Secretary of HHS to protect the
interests of U.S. taxpayers and lower drug prices?

The requirement in the Bayh-Dole Act is that the prices be “reasonable.”
Senators should ask Azar if it is “reasonable” to charge Americans the
highest prices in the world for drugs which were developed with public

High drug prices benefited Eli Lilly’s investors while Alex Azar was an
executive with the company. We can only hope that if confirmed, Azar will
work for the benefit of taxpayers that have invested in these drugs as
effectively as he worked for wealthy shareholders.

American taxpayers will be Azar’s shareholders now, and it is now up to
their elected representatives to determine whether he is able to serve this

Kim Treanor
Knowledge Ecology International
kim.treanor at keionline.org
tel.: +1.202.332.2670 <(202)%20332-2670>

More information about the Ip-health mailing list