[Ip-health] March-In Rights Could Ensure Patient Access By Keeping Drug Prices In Check. They’re Under Attack

Peter Pitts ppitts at cmpi.org
Sun May 2 16:52:42 PDT 2021

Health Affairs Blog
Remdesivir And Federal March-In Rights

  *   Peter J. Pitts <https://www.healthaffairs.org/do/10.1377/hauthor20180817.540439/full/>

April 30, 2021 10.1377/hblog20210421.570435<https://www.healthaffairs.org/do/10.1377/hblog20210421.570435/full>

The recently released Government Accountability Office (GAO) report, Information on Federal Contributions to Remdesivir<https://www.gao.gov/assets/gao-21-272.pdf>, considered whether federal patent rights were appropriate, given the federal government’s contributions in researching and developing the drug. The report concluded: Gilead’s collaborations with government scientists with respect to remdesivir generated no intellectual property rights for federally funded researchers or government agencies.

This wasn’t what those who called for the GAO report wanted or expected to hear. It is relevant to note that one of the loudest voices calling for this study was former California attorney general, now secretary of Health and Human Services, Xavier Becerra<https://www.oag.ca.gov/system/files/attachments/press-docs/Remdesivir%20Letter%2020200804.pdf>.

The GAO report was requested by Congress to provide an independent review of the role the federal government played into researching uses for remdesivir as a treatment for COVID-19. Now known as Veklury, the medicine was the first COVID-19 treatment given an Emergency Use Authorization (EUA) by the Food and Drug Administration (FDA) for treating those at risk for serious manifestations of the virus.

The GAO report came in the face of stiff political headwinds. In August 2020, citing concerns over pricing and availability of remdesivir, 34 state attorneys general asked federal officials to exercise the government’s “march-in” rights<https://www.bizjournals.com/sanfrancisco/news/2020/08/05/covid-19-coronavirus-gilead-remdesivir-march-in.html> over the COVID-19 treatment. The attorneys general said Gilead has been “unable to assure a “supply of remdesivir sufficient to alleviate the health and safety needs of the country” amid the COVID-19 pandemic. However, for politicians and pundits who regularly paint the innovative biopharmaceutical industry as getting a free ride off the back of government research grants, the GAO report should serve as a wake-up call. When the health care ecosystem works together, we can achieve remarkable results at warp speed.

Who “Invents” New Drugs? The Roles Of Industry And The NIH

A study by Bhaven N. Sampat and Frank R. Lichtenberg entitled “What Are The Respective Roles Of The Public And Private Sectors In Pharmaceutical Innovation?<https://www.healthaffairs.org/doi/10.1377/hlthaff.2009.0917>” provides a data-driven analysis that gives the National Institutes of Health (NIH) its due—but in the proper frame of reference. Sampat and Lichtenberg studied 478 drugs that were associated with $132.7 billion in prescription drug sales in 2006. Less than 10 percent of these drugs had a public-sector patent. Drugs with public-sector patents accounted for just 2.5 percent of sales, although the indirect impact was higher for drugs granted priority review by the FDA. (Priority review<https://www.fda.gov/ForPatients/Approvals/Fast/ucm405405.htm> is given to drugs that offer major advances in treatment or provide a treatment where no adequate therapy exists.) Drugs whose applications cited federally funded research and development or government publications accounted for 27 percent of sales.

The NIH does play a vital role in basic research and early discovery, but is robbing Productive Peter to pay Government Paul through the ill-considered use of march-in rights the best bang for the buck when it comes to advancing public health? The answer is a clear “no,” and the new GAO report on remdesivir reinforces this conclusion.

A Look At The Record

Between 2009 and 2013, Gilead Sciences, Inc. (Gilead) had synthesized the remdesivir compound, conducted and funded preclinical research that first identified and confirmed the antiviral activity of remdesivir and its parent compound against coronaviruses and other viruses, and had begun patenting the compounds.

Between 2013 and 2020, the Centers for Disease Control and Prevention (CDC), the Department of Defense (DOD), and the NIH conducted and funded preclinical research collaborations that helped to demonstrate remdesivir’s antiviral properties against multiple viruses, and the three NIH-funded clinical trials supplemented but did not replace Gilead’s ongoing research activities. (See exhibit 1 for examples of federal support.)

As of December 2020, federal funding for preclinical studies and clinical trials involving remdesivir totaled about $162 million, as follows: $109.2 million for NIH-funded clinical trials<https://www.gao.gov/assets/gao-21-272.pdf>; $39.7 million for DOD’s preclinical research; $11.9 million for preclinical research conducted by the NIH and NIH-funded universities; and; $0.7 million for the CDC’s preclinical research.

Exhibit 1: Examples of federal involvement in the development of remdesivir, 2013–20


Source: Government Accountability Office analysis of information from the Centers for Disease Control and Prevention, Department of Defense, Gilead Sciences, and the National Institutes of Health, Report No. GAO-21-272<https://www.gao.gov/assets/gao-21-272.pdf>, 2021 Mar.

The straightforward, unambiguous, and politically inconvenient conclusion of the independent GAO report found that “Federally supported remdesivir research conducted by CDC, DOD, NIH, and NIH-funded universities has not resulted in government patent rights, because, according to agency and university officials, federal contributions to the research did not generate new inventions.” The principal investigators at the NIH, who were working on coronavirus research projects, told the GAO they did not consider filing invention disclosures because their work did not involve modifying remdesivir or its parent compound.

In addition, Gilead entered research collaborations with federal agencies and universities with a portfolio of existing patents and patent applications, including for the remdesivir compound, which would have left little room for the federal agencies to generate their own patents. For example, the GAO report cites that DOD officials told them that when DOD scientists performed antiviral testing of remdesivir against Ebola virus, they used standard tests and screening methods and did not come up with either new tests or methods.

The GAO noted that NIH scientists did not submit invention disclosures from their remdesivir research, and invention disclosures were unlikely to be filed, because Gilead had already determined remdesivir was useful in treating coronaviruses before the NIH began its research. NIH officials told the GAO that, given these circumstances, the NIH did not conduct an inventorship analysis<https://agsci.oregonstate.edu/sites/agsci/files/main/research/vrc_release_inventorship-gattari.pdf>.

The majority of federally funded research supported a clinical trial of remdesivir for the treatment of COVID-19 after the emergence of SARS-CoV-2 (nearly a decade after Gilead invented remdesivir), which proceeded in parallel with Gilead’s sponsored COVID-19 clinical trials.

The Urgency Of Collaborative Science

The GAO report is clear, and it will make many people unhappy. But this doesn’t mean that public/private partnerships serve no use. On the contrary, they are more important now than ever before.

It was President Franklin Roosevelt who recognized the vital role of the federal government partnering with “Good old American know-how” to win the Second World War and propel the American Century forward. Decades before Operation Warp Speed forged a partnership to defeat a natural foe, an earlier public/private partnership of industry, academia, and government, the Manhattan Project, proved the value of collaboration in the face of a deadly human enemy.

On Nov. 17, 1944, President Roosevelt wrote to Vannevar Bush, the director of the three-year-old Office of Scientific Research and Development, “New frontiers of the mind are before us, and if they are pioneered with the same vision, boldness, and drive with which we have waged this war we can create a fuller and more fruitful employment and a fuller and more fruitful life.” As Bush responded to the president in his 1945 report, “Science: The Endless Frontier”: “Science can be effective in the national welfare only as a member of a team, whether the conditions be peace or war. But without scientific progress no amount of achievement in other directions can insure our health, prosperity, and security as a nation in the modern world.”

When it comes to regulated health care technologies specifically, and the anti-COVID-19 armamentarium explicitly, collaboration is a sine qua non. Politics is a distraction. Science must be collegial, intramural, and transnational.

The remarkable speed with which we developed diagnostics, therapeutics, and vaccines to combat COVID-19 points to the need for more collaboration, not less. Just because those who called for the federal government to exercise march-in rights for remdesivir didn’t get their way, doesn’t mean they should pick up their marbles and go home. One of the most important lessons of the pandemic is that when the health care ecosystem works together, we can achieve amazing things. We are all in this together. The two-dimensional “Good Guys/Bad Guys” approach is simplistic and deleterious to advancing the public health. There are rarely simple answers to complex questions. As H.L. Mencken reminds us, “For every complex problem there is an answer that is clear, simple, and wrong.” Remdesivir march-in rights fall into this category.

The Devil Is In The Details

The government report demonstrates that Gilead’s significant investment in the drug, which exceeded $1 billion in 2020 alone, far outweighs the federal funding associated with remdesivir-related research identified by the GAO.

Footnote 35 on page 15 details Gilead’s investment of more than $930 million in remdesivir-related research and development, including $786 million in Gilead-funded research and development and $147 million to supply remdesivir at no cost for use in clinical and research settings. For those who demand that march-in rights “follow the money,” it’s important to recognize what that means and where is leads. As Oscar Wilde quipped, “the truth is seldom pure and never simple.” If “science is back,” let’s all of us follow the science.

More information about the Ip-health mailing list