[Ip-health] Ed Silverman: Sanofi denies rejecting Army request for a fair price on a Zika vaccine

Kim Treanor kim.treanor at keionline.org
Mon Jul 17 11:38:18 PDT 2017


Sanofi denies rejecting Army request for a fair price on a Zika vaccine
Ed Silverman on 17 July 2017

In a series of letters to the U.S. Army and several senators, Sanofi is
denying that it rejected so-called fair pricing for a Zika virus vaccine
that the company is developing with American taxpayer funds.

The missives were sent as a growing number of federal and state lawmakers
push the U.S. Army to negotiate a more favorable agreement with Sanofi,
which is one of the world’s largest vaccine makers and has already received
a $43 million U.S. research grant.

At issue is concern the Army will award Sanofi an exclusive license to the
vaccine technology, which will give the company a monopoly through 2036
and, as a result, the vaccine may not be affordable for many Americans.

The controversy underscores a growing debate about the extent to which drug
makers should be allowed to benefit from products that are developed — at
least in part — with taxpayer funds. The letters also follow a move last
week by the Senate Armed Services committee to address these concerns.

Two months ago, STAT reported that an Army timeline of events indicated on
April 18 that the company rejected “fair price’”terms in connection with
discussions over an exclusive license. STAT reviewed the Army timeline,
which also noted that licensing negotiations were, nonetheless, continuing.
At the time, spokespeople for both Sanofi and the Army noted that contract
details had not been finalized.

“I am writing to you today to clarify an apparent misunderstanding about
Sanofi’s commitment to fair pricing for the Zika vaccine candidate,” wrote
Gavin Zealey, senior director of business development at Sanofi Pasteur,
the vaccine unit, in a July 12 letter to Barry Datlof, the director of
medical technology transfer at the Medical Research and Materiel Command at
the Walter Reed Army Institute of Research.

“Recent media reports have suggested that during the course of our ongoing
confidential negotiations to license intellectual property from WRAIR
related to a Zika vaccine-candidate, we rejected a ‘fair pricing’ proposal
from the US Army. … Sanofi Pasteur did not reject a specific fair-pricing
term proposed by WRAIR as part of the licensing negotiations.”

Over the weekend, similar letters were sent to six U.S. senators who want a
hearing on the licensing talk. Among them was Sen. Bernie Sanders (I-Vt.),
who asked the Army to guarantee that U.S. pricing for a Zika vaccine
developed by Sanofi would be in line with prices the company later charges
in developed nations in Europe, such as France, Germany, and the U.K.
Sanders did not ask for a specific pricing level.

In the letters to the senators, though, Zealey wrote added the drug maker
intends to make a Zika vaccine “accessible and available to anyone who
needs it, no matter where in the world they live. Any reports to the
contrary are simply false and misinformed.” But he reiterated company
remarks that it is premature to set pricing since the vaccine has not yet
been developed.

The lawmakers, however, are concerned Sanofi will have private and public
payers pick up the tab. An advocacy group, Knowledge Ecology International,
has noted pricing disparities for Sanofi’s Aubagio multiple sclerosis drug.
Americans using a coupon can pay about $6,100 for a month’s supply — which
is seven times more than patients pay in France and at least four times the
price in the U.K., Ireland, and Australia. Sanofi has countered that prices
vary due to circumstances in each country.

There may be another reason that Sanofi sent those letters last week. After
all, our report appeared two months ago.

Here’s why:

On July 10, the Senate Armed Services Committee issued a defense spending
bill with a provision that would allow the U.S. Department of Defense to
effectively make an end run around drug makers that price products — that
are developed with taxpayer dollars — higher than what is charged in seven
other countries. The trigger would be determined by per capita income
compared with the U.S. (see page 173).

“I think Sanofi is worried other lawmakers will want to start placing these
kinds of provisions on other bills,” said Jamie Love of KEI, the advocacy
group. “We think Sanofi wants to charge Americans more than other
high-income countries, and this would stop them from doing that.”

He believes the language would allow the Defense Department to use it
authority to issue so-called march-in rights, which refer to overriding a
patent. Under federal law, this 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

As we reported previously, the Pharmaceutical Research & Manufacturers of
America, the industry trade group, believes the provision is detrimental.
The language “ignores the subsequent substantial R&D investments and risks
undertaken by the private sector in developing and bringing a new medicine
to patients. This … would undermine critical intellectual property rights
and incentives, create substantial uncertainty for companies, and establish
completely arbitrary criteria for taking intellectual property. This could
chill critically needed collaborations and investment by the private sector
to address some of our most serious unmet medical needs.”

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