Nearly four dozen lawmakers asked the White House to ensure any treatment for the fast-moving coronavirus that is developed with U.S. taxpayer funds is reasonably priced, an issue that has previously emerged in connection with other nascent medicines due to angst over the cost of prescription drugs.
In a letter sent Thursday, 46 members of Congress urged the Department of Health and Human Service not to issue an exclusive license to any drug maker that develops a coronavirus treatment over concerns that “providing monopoly rights could result in an expensive medicine that is inaccessible, wasting public resources and putting public health at risk in the U.S. and around the globe.”
Instead, they urged the Trump administration to issue limited licenses requiring companies to make any treatment available at an affordable price, although the lawmakers did not offer an approach for how that might be established. They also insisted that HHS intervene if a drug maker prices a treatment for Covid-19, the disease caused by the new coronavirus, at an “excessive” price, which was not defined.
The lawmakers pointed to a deal this month between the HHS Biomedical Advanced Research and Development Authority, or BARDA, and Regeneron Pharmaceuticals (REGN) to develop a treatment for the coronavirus, BARDA agreed to pay 80% of R&D and manufacturing costs, after providing $8.9 million to support development of a treatment for Middle Eastern respiratory syndrome, or MERS.
“There must be guardrails in place to prevent Regeneron from monopolizing the medicine and maximizing profits,” they wrote in the letter, which was spearheaded by U.S. Rep. Jan Schakowsky (D-Ill.).
“We should not grant any manufacturer a blank check to monopolize a coronavirus vaccine or treatment developed with public, taxpayer support. Without aggressive action to protect public health, we are fearful that Americans and people in lower- and middle-income countries will not be adequately protected against current and future coronavirus outbreaks.”
We asked HHS for comment and will update you accordingly.
A Regeneron spokeswoman did not address the licensing issue, but maintained the company is “working around the clock” to develop a treatment to combat the coronavirus and is “committed to ensuring any potential medicines reach patients in need around the globe. We’re proud to partner with BARDA on this effort.”
In arguing their case, the lawmakers pointed to a study released Thursday showing that the pharmaceutical industry has devoted little of its resources to developing a salve for the latest coronavirus disease. All six of the active coronavirus clinical trials that began prior to the outbreak received some form of taxpayer or public support, according to the report by Public Citizen.
Since the emergence of SARS, or severe acute respiratory syndrome, 17 years ago, the National Institutes of Health has spent nearly $700 million on coronavirus R&D, the consumer advocacy group wrote in its report. As of Feb. 5, there were at least 25 different vaccine and treatment efforts for Covid-19, and two-thirds have support from nonprofit and public institutions.
Such concerns have increasingly emerged in recent years in connection with medicines that have been discovered with taxpayer funds.
Why? Consumer advocates and lawmakers argue that public financing greases the wheels that make it possible for drug makers to further the research and, eventually, commercialize the discoveries. And in an era of rising drug prices, they maintain drug companies too often fail to acknowledge the role that taxpayer dollars play in drug discovery and later unfairly profit at taxpayer expense.
“The pharmaceutical industry has broadly claimed that that the monopoly-based patent system ‘is the most effective tool to reward and incentivize innovation’ and ‘fulfills the promise of breakthroughs in treatments and cures for … scores of debilitating or life-threatening illnesses around the world.’ Yet the monopoly model has not driven significant industry investment in infectious diseases, including coronaviruses,” Public Citizen wrote in its report.
“Implementing an approach that looks beyond monopolies could help ensure that taxpayers do not pay twice. U.S. taxpayers are compensated for their significant investment in biomedical research and development by being charged the highest medicine prices in the world.”
The issue figured prominently three years ago when the U.S. Army sought to strike a deal with Sanofi (SNY) for a Zika vaccine that was being developed in part with taxpayer funds. Several lawmakers and advocacy groups pressed the Army to eschew an exclusive license or, if that was not possible, obtain a guarantee over affordable pricing. Sanofi refused and work on the vaccine was subsequently halted.
In general, however, manufacturers are reluctant to commit to pricing terms while such projects are in the early stages of development. For this reason, the NIH in 1995 removed what were called “reasonable pricing” clauses from cooperative R&D agreements. At the time, former NIH director Dr. Harold Varmus described such clauses as a “restraint” on new product development.
Meanwhile, the NIH has complained that drug makers are not stepping up to develop a Covid-19 treatment, although Sanofi this week agreed to work with BARDA to develop a vaccine and Johnson & Johnson (JNJ) will also try to produce a vaccine.
In response, the PhRMA industry trade group later sent us a statement, saying “In situations of high public health need and urgency, our shared goal should be to encourage development of solutions to diagnose and treat a disease like COVID-19,and we should be wary of policies that could prevent them from being developed. There are enormous upfront costs and risk associated with vaccine development, including significant scientific and regulatory challenges.”
“It’s especially troubling the signers are criticizing steps taken by the BARDA to develop a COVID-19 vaccine. BARDA is an innovative model that allows the government to partner with industry to accelerate research and development of medical therapies for patients. The agency was created by Congress to promote responses to serious threats that would not otherwise be commercially viable. Current law permits exclusive licenses to be granted only when NIH determines the license is necessary to develop, manufacture and bring a product to market. Obstructing that process does a disservice to Americans and people around the world who could benefit from new treatments or vaccines.”