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MARCH
**22, 2023**
Dayen on TAP
A Big Miss on Drug Prices
President Biden's NIH rejects a petition to seize the patent of an
unaffordable prescription drug.
The Biden administration has seen firsthand in the past few weeks the
benefits of using statutory power to bring down prescription drug costs.
With Novo Nordisk
<[link removed]>
and Sanofi
<[link removed]>
following the lead of Eli Lilly and announcing their intent to slash the
list price of their insulin medications by 65 percent or more,
practically all diabetes patients will see relief, mostly thanks to a
change in Medicaid rebates
<[link removed]>
stuck into the American Rescue Plan. It upended the usual laissez-faire
attitude about prescription price-gouging, and showed that the
government, as a major medication buyer, can intervene to lower costs.
Which is why it's so disappointing that a separate effort to take
action on an even wider array of pharmaceuticals has fizzled. The
Department of Health and Human Services (HHS) and the National
Institutes of Health (NIH) have rejected a petition
<[link removed]>
from prostate cancer patients to use a provision of the Bayh-Dole Act of
1980 to seize the patents of a high-cost drug because of its high price.
The tactic, known as "march-in rights," was a core pillar of the Day One
Agenda
<[link removed]>.
The Bayh-Dole Act specifies how the government awards patents to drugs
developed with publicly funded research (a significant number). But if
the feds find that the drug is not being made accessible on "reasonable
terms," they can march in and extinguish the patent, allowing generic
competitors to market their own versions.
But march-in rights have never been used
<[link removed]> since Bayh-Dole's
inception, and NIH has repeatedly rejected the idea that affordability
is a reasonable term. Advocates thought they found the perfect test case
<[link removed]>
for a new administration that paid lip service to lowering prescription
drug costs: a cancer drug called Xtandi (enzalutamide), which lists at
an average wholesale price in the U.S. of $188,900 per year
<[link removed]>. Even with insurance, co-pays
range as high as $10,000 or more.
This is three to six times the list price of Xtandi in every other
industrialized country in the world. Grants from the NIH and the U.S.
Army helped create Xtandi, which is owned by a Japanese pharmaceutical
conglomerate named Astellas (Pfizer co-owns the U.S. market for the
drug). An FDA-approved generic is ready and waiting whenever the
monopoly patent expires. Patent holders have already made back $20
billion in revenue on the drug, far beyond their costs.
But NIH, in a letter sent late Tuesday
<[link removed]>,
rejected march-in for Xtandi for the second time, the other coming in
2016. Xtandi is "widely available to the public on the market," acting
NIH director Lawrence Tabak wrote, and march-in would not be "an
effective means of lowering the price of the drug." This effectively
rejects the idea that price is an important component of access; in
fact, the letter edits out "reasonable terms" as the condition of drug
availability under Bayh-Dole.
The outcry was immediate. "What the Biden Administration is saying is
that charging US residents 3 to 6 times more than any other high-income
country is reasonable," wrote Knowledge Ecology International, which has
taken the lead on march-in challenges. The decision "protects
monopolists over taxpayers and patients, despite clear statutory
authority and reasonableness to intervene," said
<[link removed]>
Rep. Lloyd Doggett (D-TX), who had urged the NIH
<[link removed]>
to act. "How many prostate cancer patients will die because they cannot
afford this unacceptable price?" asked
<[link removed]>
Sen. Bernie Sanders (I-VT).
The leadership of the NIH has been historically unwilling to disrupt a
lucrative gravy train for themselves and their research partners. Some
senior NIH officials receive personal royalties
<[link removed]> of up to $150,000 per
year for prescription drugs and other treatments. The old Upton Sinclair
line
<[link removed]>
about it being difficult to get a man to understand something when their
salary depends on not understanding it applies here.
That pharma lobbyists get this big win right at the time when the
administration has demonstrated the ability to force insulin prices
lower is perhaps the biggest disappointment. Separately, the government
is today breaking up a monopoly nonprofit
<[link removed]>
that controls the organ transplant system, a glimmer of hope to reduce
the extreme backlog for transplants. NIH and HHS could have stopped a
similar racket that protects monopoly patents for drugs that U.S.
taxpayers paid to develop. But they're clearly too implicated in the
system to overhaul it.
~ DAVID DAYEN
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