[Ip-health] Modern Heatlhcare editorial by Merrill Goozner: The cost of irresponsible tech transfer
james.love at keionline.org
Fri Apr 19 06:30:05 PDT 2019
I agree with the conclusions, but I'm a bit surprised the Merrill's
reference to previous efforts to use Bayh-Dole public interest rights was
limited to an unnamed mid 1990s request on AIDS drugs. Here are some cites
to previous cases: https://www.keionline.org/cl/march-in-royalty-free.
(It would also have been good to mention the Trump proposal, from NIST, to
eliminate or gut the public's rights in federally funded inventions).
Merrill Goozner's recommendation to Congress is this:
"If Congress actually moves to adopt drug pricing legislation this year, it
should include language requiring there be affordable, value-based prices
whenever therapeutic products are developed with technologies licensed from
the NIH or taxpayer-funded university research."
Opinion & Editorial
April 18, 2019 03:45 PM 18 HOURS AGO
Editorial: The cost of irresponsible tech transfer
The government and academic medical centers need to rethink their
technology transfer policies, which have allowed the price of specialty
drugs to soar to unsustainable heights.
The latest targeted therapies for cancer and genetic diseases are coming to
market with price tags approaching a half-million dollars per patient. What
most have in common are their origins in academic or government labs funded
by the National Institutes of Health.
The most important advance in cancer treatment in decades—chimeric antigen
receptor T-cell therapy, known as CAR-T—has achieved long-term remission in
about two-thirds of children and half of adults with leukemia and lymphoma.
In CAR-T, immune cells are removed from a patient’s body and bioengineered
to fight a patient-specific tumor. More than 400 clinical trials are
testing CAR-T in a wide array of cancers.
There are also new drugs to slow the advance of cystic fibrosis and Leber
congenital amaurosis, or LCA. These are mutation-driven diseases whose
effects begin at birth and lead to debilitating lung disease and blindness,
The CAR-T now marketed by Novartis, Kymriah, was developed at the
University of Pennsylvania by Dr. Carl June and colleagues. The version
marketed by Gilead Sciences is Yescarta, which was invented at the National
Cancer Institute; Gilead purchased the rights from Kite Pharmaceuticals for
$11 billion. The new drugs for cystic fibrosis, Orkambi and Kalydeco, were
developed with grants from the NIH and the Cystic Fibrosis Foundation,
which eventually sold the rights to Vertex Pharmaceuticals for $3.3 billion.
The gene therapy for LCA, Luxturna, was developed at the Children’s
Hospital of Philadelphia. Its lead scientist, Dr. Katherine High, helped
form Spark Therapeutics with a $50 million investment by CHOP, whose CEO at
the time, Dr. Steven Altschuler, sat on its board. When Roche recently
announced plans to purchase the firm for $4.8 billion, Bloomberg News
estimated CHOP would walk away with $456 million from the deal.
In each of these cases (and many more I could cite), the argument that high
prices are needed to repay development costs is laughable. The final
clinical trials needed for Food and Drug Administration approval had
enrollments in the low two-figures with desperate patients or their parents
breaking down doors to get in. Those prices are set on Wall Street, not by
any calculus based on cost.
Nor are they based on value. The prices for many of these drugs far exceed
what the not-for-profit Institute for Clinical and Economic Review
considers the upper limit on what insurers should pay for a medical
technology. For instance, ICER estimated Vertex would have to cut the
prices of Orkambi and Kalydeco, its two cystic fibrosis drugs, by
three-fourths to make them cost-effective.
In the mid-1990s, AIDS activists demanded the NIH use the retained-rights
clause in its licensed patents to lower the cost of the new miracle drugs
it had helped develop. Bowing to industry pressure, the government said no.
University technology transfer offices have also turned their backs on the
price issue, which isn’t surprising since the higher the price, the greater
their royalty stream. Their defense is that the additional revenue is
plowed back into their research labs, which is the same argument made by
the not-for-profit Cystic Fibrosis Foundation.
But this distorts the nation’s research prioritization process. It divorces
funded projects from the public accountability that comes from an
independent review of their medical need and scientific opportunity. “We’re
working against the ethical standards we should be driven by,” said Dr.
Ross McKinney, chief scientific officer for the Association of American
That needs to change. If Congress actually moves to adopt drug pricing
legislation this year, it should include language requiring there be
affordable, value-based prices whenever therapeutic products are developed
with technologies licensed from the NIH or taxpayer-funded university
James Love. Knowledge Ecology International
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