Senator Bernie Sanders and several other Democratic lawmakers are urging the Obama administration to hold a public hearing to determine whether the National Institutes of Health should override the patent on a prostate cancer drug in an effort to drive down prices.
The move comes two months after consumer advocacy groups asked the NIH to override the price of Xtandi, because the medicine is much more expensive in the United States than elsewhere. Their rationale: Federally funded research was used to develop the drug, so federal authorities have a right to intervene.
The medicine, which is sold by Astellas Pharma (ALPMY), has an average wholesale price in the US of more than $129,000, about three to four times more than what other high-income countries are paying, according to Union for Affordable Cancer Treatment and Knowledge Ecology International, the advocacy groups.
The groups believe the Xtandi patent should be overridden because the drug was developed at the University of California, Los Angeles, with help from taxpayer dollars — specifically, NIH and US Department of Defense grants. The university later licensed the drug to Medivation, a biotech that eventually struck a marketing deal with Astellas.
“When Americans pay for research (which) results in a safe and effective drug, an unreasonably high cost should not limit their access to it,” the lawmakers wrote in a letter today to theDepartment of Health and Human Services Secretary Sylvia Burwell and to NIH Director Dr. Francis Collins.
“New treatments are meaningless if patients cannot afford them … (and) the NIH has a powerful tool to hold drug companies accountable for barriers to access to drugs developed through support of US taxpayers, including price.”
The lawmakers echoed the argument made by Union for Affordable Cancer Treatment and Knowledge Ecology International: the NIH has the ability to issue so-called march-in rights, which refers 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 terms.”
Whether the administration will comply is unclear.
Earlier this month, the administration rejected a request from dozens of congressional Democrats, who urged the HHS and NIH to develop guidelines that would require drug makers to license their patents and put a lid on “price gouging.” They maintain the NIH should be more aggressive about granting march-in rights when drug prices are high.
Burwell responded to Representative Lloyd Doggett (D-Texas) — who was one of the dozen lawmakers who wants a hearing — that she does not believe a new guidance for march-in rights is needed. She noted the law is already clear about when the NIH can use its authority.
The NIH, she wrote, considers the use of a march-in right on a “case-by-case basis and is prepared to use its authority” if the law permits such a move and would “alleviate health or safety needs or address a situation where effective steps are not being taken to achieve practical application of the inventions.”
Burwell noted that the NIH had previously considered using its march-in authority concerning drug pricing concerns in 2004 and 2013, but determined the statutory requirements were not met. One of those episodes involved a high-profile price hike on the Norvir AIDS medicine.
The lawmakers noted that the NIH held a hearing in 2004 to consider a march-in request for Norvir, which at the time was marketed by Abbott Laboratories (ABT). The company later lowered the price for public payers, including AIDS Drug Assistance Programs and Medicaid, and expanded its patient-assistance programs.
An Astellas spokesman later wrote us to say that “the discussion of Xtandi’s price in the petition (filed by the consumer groups) fails to reflect what payers or patients actually pay for the medicine.” He contended that, last year, 81 percent of privately insured patients paid $25 or less out of pocket per month and 79 percent of Medicare patients paid nothing out of pocket per month.
The HHS and NIH did not immediately respond to requests for comment. A spokesman for Knowledge Ecology International, one of the advocacy groups, told us the NIH had not yet responded to its request.
Among the lawmakers who signed the letter is US Representative Elijah Cummings (D-Md.) who, along with Sanders, held hearings in late 2014 on rising generic drug prices, and Senator Amy Klobuchar (D-Minn.), who last fall asked the Federal Trade Commission to investigate whether drug makers are hiking prices, and then restricting distribution to prevent generic drug makers from making lower-cost versions of their medicines.
Also signing the letter was Senator Al Franken (D-Minn.) who earlier this month introduced legislation that would end the tax break that drug makers can take for advertising medicines to consumers. Another is Representative Rosa DeLauro (D-Conn.), who introduced a bill calling for a three-year moratorium on advertising newly approved prescription drugs to consumers.