[Ip-health] James Love - First Opinion - Stat News - Why didn't nonprofits and the NIH require 'reasonable' pricing for Zolgensma? That may happen in France

Thiru Balasubramaniam thiru at keionline.org
Wed Sep 18 05:08:17 PDT 2019


Why didn’t nonprofits and the NIH require ‘reasonable’ pricing for
Zolgensma? That may happen in France
SEPTEMBER 18, 2019

When a new drug emerges from research largely funded by grants from
charities and government agencies, who gets to set the price? In the U.S.,
that question seems to have been answered — the drug company that makes it.
As I’ve learned from a poorly redacted filing with the Securities and
Exchange Commission, the answer may be different in France.

In May, the FDA approved Zolgensma, a gene therapy for young children with
spinal muscular atrophy (SMA). Its maker, Novartis (NVS), set the price at
$2.1 million, roughly nine times the median sale price for a home in the
U.S. and 33 times the national per capita income.

One explanation for the high price is, why not? Novartis can charge
whatever it wants for this therapy, and justifies the high price based on
the emotional appeal of treating children with a terrible disease and a
carefully nurtured narrative that new treatments are very expensive to

But there’s more to the story. The early development of Zolgensma was
financed by the National Institutes of Health, which funded more than $450
million in grants citing “spinal muscular atrophy,” and also by a plethora
of charities such as Sophia’s Cure, Cure SMA, Getty Owl Foundation,
Fighting SMA, Jadon’s Hope Foundation, the Gwendolyn Strong Foundation, and
Miracle for Madison — and those are just the ones in the U.S. — that are
devoted to finding treatments for SMA. These charities called upon patient
families and friends to subsidize the early research and clinical trials.

Sophia’s Cure at one point sued Nationwide Children’s Hospital for failing
to provide the recognition it had been promised for its role as a sponsor
of the investigational therapy.

None of the U.S. charities placed conditions on their grants about pricing
if a drug did eventually make it to the market.

The NIH, however, has statutory responsibility under the Bayh-Dole Act to
require that funded inventions be “available to the public on reasonable
terms,” though NIH Director Francis Collins has decided to leave pricing
decisions to drug companies, without any limits.

Things may work out differently in France.

As a recombinant gene therapy, Zolgensma uses the adeno-associated virus 9
(AAV9) as a vehicle to deliver copies of the gene encoding the human
survival motor neuron protein to an individual’s cells. Généthon, a French
charity focused on designing gene therapies for rare diseases, funded
essential work on SMA and the AAV9 vectors used by Zolgensma. The company
holds several key patents that were licensed to AveXis, a company created
to commercialize Zolgensma.

In a March 31, 2018, submission to the U.S. Securities and Exchange
Commission, AveXis included a highly redacted copy of the license from

When I looked at the file, I noticed that the redactions were flawed, and
that only the background color of the redacted parts had been changed. It
was simple to load the document into a word processor, change the
background colors, and create a completely unredacted version.

I had heard a rumor that Généthon included a reasonable pricing clause in
the contract, and there it was, as paragraph 4.5, titled “French Patient
Access.” Here’s what it says (“Licensee” refers to AveXis):

“Following the appropriate regulatory approvals, Licensee will use
Reasonable Efforts to make available within France all the Licensed
Products indicated for SMA at prices that would allow appropriate
reimbursement scheme and that would not constitute an obstacle for patients
to have access to the therapy. Licensee shall be solely responsible for
designing and conducting all Commercialization activities necessary to
fulfill its obligations under this Section.”

In the U.S., government, private, and public health insurance providers are
limiting coverage for Zolgensma because of its record-breaking and
access-blocking price. It could be a different story in France, depending
upon what Généthon is prepared to do with the leverage it has in its

This raises a huge question for U.S. charities and government funding
agencies: Why don’t our tax-exempt charities insist on reasonable pricing
agreements to protect access to the medicines they help make, and why does
the NIH refuse to enforce the contractual obligations in funding agreements
to make the benefits of government inventions “available to the public on
reasonable terms?”

James Love is director of Knowledge Ecology International, a not-for-profit
organization that advocates for access to medical treatments at affordable
prices, and is currently a member of the board of directors of the Union
for Affordable Cancer Treatment. Knowledge Ecology International and the
Union for Affordable Cancer Treatment have both petitioned the NIH and
other federal agencies to use their rights regarding federally funded
inventions to curb excessive prices. Both organizations are funded by
private donations and do not accept funding from the pharmaceutical

About the Author

James Love
james.love at keionline.org

Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International
41 22 791 6727
thiru at keionline.org

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