[Ip-health] Eric Sagonowsky: A new measure would limit pricing on all DOD-funded medication

Kim Treanor kim.treanor at keionline.org
Thu Jul 6 12:27:32 PDT 2017


Forget Sanofi's Zika shot. A new measure would limit pricing on all
DOD-funded medication
Eric Sagonowsky on 6 July 2017

The controversy over Sanofi's eventual pricing for an in-development Zika
vaccine might just spawn pricing constraints for all treatments developed
with the help of Defense Department funding.

Under an amendment to the military spending authorization now working
through Congress, the Department of Defense would have the power to invite
in new competition to certain drugs and vaccines it helped research.

Proposed by Sen. Angus King, I-Maine, the measure would apply to products
whose prices are markedly higher in the U.S. than in other high-income
countries. The amendment passed the Senate Armed Services Committee
unanimously on June 28.

If the proposal makes its way into law, it could affect Pfizer and
Astellas’ prostate cancer med Xtandi and other projects that have received
government R&D support, such as Sanofi’s in-development Zika vaccine. King
is one of the senators who has called for pricing guarantees on a Zika
vaccine Sanofi is developing with the U.S. Army.

Though the Zika vaccine controversy is freshest, Xtandi—and its roots in
federally funded research—has been at the center of its own pricing
brouhaha. The cancer med was developed at the University of California at
Los Angeles, with support from the National Institutes of Health and the
Department of Defense, Knowledge Ecology International (KEI) said.

The Japanese drugmaker charges $129,000 per year for the med in the U.S., a
figure multiples higher than in other high-income countries, according to
the nonprofit. KEI has argued since early last year that generics to the
prostate cancer med should be made available in the U.S. under a never-used
provision of federal law that allows the government to usher in generics of
on-patent drugs.

The NIH refused to exercise those “march-in” rights and break Xtandi
patents last June. Writing on the decision, Director Francis Collins said
the med is “broadly available as a prescription drug.” KEI director Jamie
Love called the move “an appalling dereliction of his duty to protect the
public from unreasonable use of inventions funded by U.S. taxpayers.”

On Wednesday, Love said in a statement that Sen. King's amendment will do
"something concrete to curb excessive prices on drugs, and it would have an
immediate impact, in particular, lowering Medicare outlays by hundreds of
millions of dollars annually, and lowering patient co-payments

KEI estimated the amendment could save Medicare $500 million each year on
Xtandi alone.

"If the amendment becomes law, it will be the first time in more than 25
years that U.S. residents get any type of protection on the pricing of
taxpayer-funded drugs or vaccines," Love continued.

Pfizer representatives declined to comment on the amendment. An Astellas
spokesperson said it'd be premature to comment as the amendment text isn't
public. A spokesperson for the drug industry's lobby group, PhRMA, said the
proposal "ignores the subsequent substantial R&D investments and risks
undertaken by the private sector in developing and bringing a new medicine
to patients."

"This amendment would undermine critical intellectual property rights and
incentives, create substantial uncertainty for companies, and establish
completely arbitrary criteria for taking intellectual property," according
to PhRMA's representative. "This could chill critically needed
collaborations and investment by the private sector to address some of our
most serious unmet medical needs."

Though it’s not close to hitting the market, another high-profile project
that’s received DOD support is Sanofi’s Zika vaccine, which uses technology
initially developed by Army scientists. The partnership, which includes
options for ongoing funding, has been under intense scrutiny since late
last year, when the U.S. government said it was negotiating an exclusive
license with the French drugmaker. Nonprofit groups called for assurances
that the vaccine would be affordable for U.S. citizens.

An Army official has said his group can’t enforce future vaccine prices,
and Sanofi said it’s too early to talk about pricing for a vaccine that's
still in early-stage testing and may never make it to market. So far, the
project has received $43 million in U.S. government funding, with another
$130 million potentially available if the shot advances.

Sen. King was among a group of senators who last month called for a public
hearing on the proposed Zika vaccine license. Writing to Sanofi CEO Olivier
Brandicourt, the lawmakers noted that 95% of the National Institutes of
Health's licensing agreements with industry aren't exclusive, and argued
that Sanofi stands to gain considerably from the project whether or not the
license is exclusive. Sanofi declined to comment on the amendment.


Kim Treanor
Knowledge Ecology International
kim.treanor at keionline.org
tel.: +1.202.332.2670

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