A group of US lawmakers is pressing the Biden administration to leverage patent issues to try to lower the cost of the prostate cancer drug enzalutamide (Xtandi), which was developed with significant federal investment.
Enzalutamide is marketed by Astellas and Pfizer, but much of the research on the drug was supported by grants from the National Institutes of Health (NIH) and the US Army.
Senator Elizabeth Warren (D-MA) and several colleagues are supporting the requests from three men with prostate cancer for the federal government to seek to allow the swift sale of rival generic versions of enzalutamide. The key US patent protection on Xtandi is set to run through 2027.
What Warren and colleagues seek would amount to a test case of the march-in provision of a key federal law covering taxpayer-funded discoveries, known as the Bayh-Dole Act. This march-in provision is intended to provide the public with access to inventions developed with significant federal investment in certain extreme cases.
In other affluent countries, the drug is often sold for a fraction what it costs in the US, Warren and colleagues said in a January 23 letter to the Department of Health and Human Services (HHS).
In the US, the 2020 gross price for 120 40-mg capsules of enzalutamide was about $12,076. By comparison, it costs $2720 in Australia and $3522 in France, according to a 2021 report from the investigative arm of Congress, the Government Accountability Office.
Warren and her colleagues view the Bayh-Dole Act as a way for the federal government to act on behalf of taxpayers when the benefits of a federally funded investigation are “available to the public on reasonable terms.”
“We urge you to send a clear message to companies trying to price gouge products that have been funded with taxpayer money by holding a long overdue public hearing on the Xtandi petition and determining whether to exercise the government’s rights,” the lawmakers wrote. “HHS can and should use these existing authorities to deliver on the administration’s promises to lower prescription drug prices.”
HHS has not yet announced plans for a hearing. The department told Medscape Medical News that it had received the lawmakers’ letter but that it would not comment on its communication with members of Congress.
Joe Allen, executive director of the Bayh-Dole Coalition, argues against Warren’s interpretation of march-in rights. He also says march-in on enzalutamide patent rights would have little practical consequence. Generic competition for the drug could begin in a few years without the time-consuming, complex procedures that a march-in effort would involve. These would start with a hearing and would almost certainly involve appeals and court battles, he told Medscape Medical News in an interview.
Robert Sachs, one of the three prostate cancer patients acting as petitioners for march-in rights on enzalutamide, disagrees. He sees the 2027 US patent expiration date as a reason for HHS to proceed with an attempt at march-in rights.
“This gives Astellas at least another 4 years to charge US cancer patients three to six times the price it charges for this life-extending drug in other highly developed countries, and overcharge Medicare billions of dollars,” he told Medscape Medical News.
Decades of Debate
For about two decades, there’s been a debate about whether the Bayh-Dole law can be used to address the high costs of drugs that were developed with significant federal support.
“For now, it remains just a theory, not a tool that has ever been used in this way by the federal government,” wrote veteran DC journalist Glenn Kessler in 2021 in a fact-checker review of the Bayh-Dole debate. That review was published in The Washington Post.
The original sponsors of the 1980 law, then senators Birch E. Bayh (D-Ind) and Robert J. Dole (R-Kan), have argued against leveraging march-in rights to seek lower drug prices. In a 2002 letter to The Washington Post, Bayh and Dole said their act was meant to make it easier for companies to develop products through taxpayer-funded research.
“The law makes no reference to a reasonable price that should be dictated by the government,” they wrote. “This omission was intentional; the primary purpose of the act was to entice the private sector to seek public-private research collaboration rather than focusing on its own proprietary research.”
Bayh and Dole wrote that letter in response to a Washington Post opinion piece written by one of the leading proponents of march-in rights, Peter S. Arno, PhD, then of Albert Einstein College of Medicine and now at University of Massachusetts–Amherst.
“Bayh-Dole is a provision of US patent law that states that practically any new drug invented wholly or in part with federal funds will be made available to the public at a reasonable price,” Arno wrote. “If it is not, then the government can insist that the drug be licensed to more reasonable manufacturers, and, if refused, license it to third parties that will make the drug available at a reasonable cost.”
Arno and other advocates for march-in rights on drugs, including James Love, director of Knowledge Ecology International and a staff member of the nonprofit consumer watchdog group Public Citizen, have continued to press this argument about potential consumer gains from march-on rights on drug patents.
The NIH has denied six march-in provisions, according to a 2016 report from the Congressional Research Service. These included a petition made in 2004 and 2012 involving AIDS drugs, as well as a previous 2016 petition seeking to address the cost of enzalutamide.
NIH Director Francis Collins in June 2016 turned down the request for a march-in on the drug’s patent, saying that there appeared to be no concern about the supply of enzalutamide.
“Certain Rights in This Invention”
There’s no dispute that federal support was critical to the development of enzalutamide.
The drug stems from work by researchers at the University of California, Los Angeles (UCLA), who received funding from the NIH and the Army. “The Government has certain rights in this invention, ” states each of the three key enzalutamide patents (7,709,517, 8,183,274, 9126941).
An aim of the research described in the patents was to offer a treatment that would hold prostate cancer in check when bicalutamide (Casodex) no longer could. The researchers sought to develop improved androgen-receptor inhibitors “with more potent antagonistic activities and minimal agonistic activities” to delay disease progression and to treat fatal hormone-refractory prostate cancer, according to the patent.
UCLA in 2005 licensed intellectual property rights related to the compound that became enzalutamide to a fledgling San Francisco–based biotech, Medivation Inc. Medivation partnered with Japan’s Astellas in developing enzalutamide, which the US Food and Drug Administration (FDA) approved in 2012.
Astellas said in a statement that the US government contributed about $500,000 to the initial discovery of enzalutamide, while the company has spent more than $1.4 billion to date in research and development efforts. Contributions from other partners bring the total corporate contributions to research on the drug to more than $2.2 billion.
Astellas told Medscape Medical News in an email that it and Medivation conducted 7 years of research and development before achieving the first FDA approval of enzalutamide in 2012. Astellas said it paid for further randomized clinical trials that led to approval of additional indications of enzalutamide in prostate cancer.
In August 2016, Pfizer Inc announced that it would buy Medivation, an acquisition that the giant drugmaker said would “immediately accelerate revenue growth and drive overall earnings growth.” Pfizer closed the sale for $14 billion in cash.
“Left unsaid was that the $14 billion purchase price would be paid for by cancer patients and US taxpayers,” says Sachs, one of the current petitioners for march-in rights on enzalutamide.
The announcement of the Medivation purchase spurred Bernie Sanders, an indepenent senator from Vermont, to ask Pfizer to reduce what he termed “the unconscionable price of Xtandi.”
Instead, there have been price increases, at least for some purchasers.
Medicare Part D pharmacy programs reported 7.3% annual growth rate in average spending per dosage unit for enzalutamide for the 2016–2020 period. In 2020, Medicare Part D plans spent about $2 billion on the drug. The average spending for enzalutamide was about $74,314 per patient for the drug.
Sanders has shown continuing interest in seeking lower prices for drugs that were developed with significant federal support.
He now has greater clout to promote this view, having become in January chairman of the Health, Labor, Education and Pensions (HELP) Committee. Sanders has announced that Moderna Chief Executive Officer Stéphane Bancel will testify in March at a HELP hearing entitled, “Taxpayers Paid Billions for It: So Why Would Moderna Consider Quadrupling the Price of the COVID Vaccine?”
The pharmaceutical industry maintains that a federal attempt to lower drug prices through the Bayh-Dole provision would disrupt the public-private relationships that have brought many medicines to market.
Without “the framework in the Bayh-Dole Act and significant investment from the industry, the knowledge gained through basic research at the NIH would generate interesting ideas but very few new medicines,” Megan Van Etten, a spokesperson for the Pharmaceutical Research and Manufacturers of America, told Medscape Medical News via email.
To date, that argument has stopped the NIH from taking steps such as holding public hearings to consider whether Bayh-Dole provisions offer a path to lower drug costs, said Liza Vertinsky, a law professor at the University of Maryland. She is the author of the 2022 Health Affairs article, “Exercising March-In Rights Would Make Biomedical Public-Private Partnerships Stronger.”
“It seems so clear that it’s a mechanism to balance the public and the private benefits from a public investment,” but serious discussions of this approach have been blocked, Vertinsky told Medscape Medical News. “The fact that we can’t even do that suggests that we’ve gotten the balance wrong.”
There’s broad agreement on a need for clarity about Bayh-Dole march-in rights, even among people with opposing views.
In January 2021, during its final weeks, the Trump administration unveiled a proposed Commerce Department rule on policies for licensing federally funded inventions. Included in this was a provision that federal agencies couldn’t use Bayh-Dole to march-in “exclusively on the basis of business decisions of a contractor regarding the pricing of commercial goods and services.”
The Biden administration has rejected that idea. In a July 2021 executive order, President Joe Biden told the Commerce Department to drop the ideas about march-in rights included in the Trump administration’s proposed rule.
Biden could go a step further, suggested the authors of a 2022 article in The New England Journal of Medicine, Alfred B. Engelberg, JD, an expert on pharmaceutical patents, and Aaron S. Kesselheim, MD, JD, MPH, and Jerry Avorn, MD, both of Harvard University.
The president could issue an executive order expressing an “intention to take advantage of existing laws” to reduce the federal government’s prescription-drug costs, they wrote.
“We believe it’s time for manufacturers to offer the US government reasonable prices for medicines discovered using federal funding or face full exercise of the government’s existing patent immunity and license rights to reduce costs,” wrote Engelberg, Avorn, and Kesselheim.
“The government cannot afford to both pay for the discovery of new medicines and pay the high prices that manufacturers charge for them,” they concluded. “The balance between the right of private parties to profit from the development of federally funded discoveries and the right of the federal government to use these discoveries for the public good should be restored.”
Kerry Dooley Young is a freelance journalist based in Miami Beach. Follow her on Twitter @kdooleyyoung.
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