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bayh dole act
Critics Say Biden Plan to Cut Drug Costs Too Friendly to Big Pharma
"Federal agencies have shown themselves reluctant to act against unreasonable prices, and this new proposal may give them permission to continue to do nothing," said one expert.
Dec 07, 2023
While welcoming the White House's willingness to tackle pharmaceutical companies' patent abuse and high prescription drug prices, progressive critics argued Thursday that U.S. President Joe Biden must do more to challenge Big Pharma's monopoly power.
The White House on Thursday announced "new actions to promote competition in healthcare and support lowering prescription drug costs for American families, including the release of a proposed framework for agencies on the exercise of march-in rights on taxpayer-funded drugs and other inventions."
Under the Bayh-Dole Act of 1980—legislation meant to promote the commercialization and public availability of government-funded inventions—federal agencies reserve the right to "march in" and authorize price-lowering generic alternatives to patented medications developed with public funding.
The federal government has never invoked march-in rights, which are staunchly opposed by the pharmaceutical and other industries and interests.
"American taxpayers pay more for research than any country in the world: Hundreds of billions of dollars on research relevant to developing new drugs through the [National Institutes of Health] and other agencies," White House domestic policy adviser Neera Tanden said at a Thursday press briefing, according toThe Hill.
"But at the same time, pharmaceutical companies charge Americans two to three times—and sometimes even more than that—for the same drugs than what they can charge in other countries," she added.
The White House said Thursday that the Department of Commerce and Department of Health and Human Services "released a proposed framework for agencies on the exercise of march-in rights that specifies for the first time that price can be a factor in determining that a drug or other taxpayer-funded invention is not accessible to the public."
The issue of greedy pharmaceutical companies charging exorbitant prices for publicly funded drugs took center stage during the Covid-19 pandemic, when corporations reaped record profits selling vaccines and other treatments developed fully or partly with taxpayer money.
U.S. Senate Health, Education, Labor, and Pensions (HELP) Committee Chair Bernie Sanders (I-Vt.)—a leading congressional critic of Big Pharma greed—called Thursday's announcement "a step forward in the right direction."
Sanders continued:
But, in my view, much more must be done. The American people are sick and tired of seeing hundreds of billions of their tax dollars going to the research and development of new treatments and cures only to end up paying, by far, the highest prices in the world for prescription drugs. In my view, the administration should reinstate and expand the reasonable pricing clause to require the pharmaceutical industry to charge affordable prices for new prescription drugs developed with taxpayer support. It should also move to substantially lower the price of the prostate cancer drug Xtandi by allowing companies to manufacture generic versions of this treatment. This is a drug that was invented with taxpayer dollars by scientists at UCLA and can be purchased in Canada for one-fifth [of] the U.S. price.
In March, patient advocates blasted the Biden administration's refusal to compel Pfizer to lower Xtandi's price, even though the lifesaving prostate cancer drug—which has a nearly $190,000 annual price tag—was developed completely with public funds.
Peter Maybarduk, director of the Access to Medicines program at the consumer advocacy group Public Citizen, said: "March-in can be, should be, a powerful tool to support fair pricing and access to publicly funded medicines, as President Biden importantly suggests. Unfortunately, the administration's march-in policy is far more limited than the statute allows."
"It should be quickly revised to recommend use of march-in wherever publicly funded medicines are unreasonably priced," he continued. "Where most drug prices already are egregious and force rationing, few drugs will seem 'extremely' priced by comparison. Federal agencies have shown themselves reluctant to act against unreasonable prices, and this new proposal may give them permission to continue to do nothing."
"Unfortunately, the administration's march-in policy is far more limited than the statute allows."
"The examples the announcement offers evade the main and important use case: Where drug corporations abuse their monopoly power to charge exorbitant prices, ignore the government contribution to [research and development], and charge Americans more than people in other countries," Maybarduk asserted.
"The final guidelines must be adjusted so they explicitly cover these scenarios and establish commonsense criteria for what constitutes an unreasonable price," he added. "Falling short risks doing nothing to lower the prices of taxpayer-funded medicines for patients, and instead perpetuating an unacceptable status quo. Americans have a right to expect not to be price gouged for medicines they paid for in the first place."
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Cancer Patients Challenge Biden Admin's Refusal to Lower Price of Lifesaving Drug
"We request HHS to consider this appeal directly... because the NIH has repeatedly demonstrated its unwillingness to even acknowledge that the Bayh-Dole Act includes an obligation to make products invented with federal funds 'available to the public on reasonable terms.'"
Mar 23, 2023
Two days after President Joe Biden's administration rejected a petition asking federal regulators to use their authority to lower the astronomical price of a lifesaving prostate cancer drug developed entirely with public funds, petitioners on Thursday filed an administrative appeal.
At issue is enzalutamide, a drug the Japanese pharmaceutical giant Astellas and its U.S. counterpart Pfizer sell under the brand name Xtandi. Although Xtandi owes its existence to U.S. taxpayers, who bankrolled 100% of its development, an annual supply of the drug costs $189,900 in the United States—three to six times more than its list price in other wealthy nations.
In late 2021, prostate cancer patients Robert Sachs, Clare Love, and Eric Sawyer petitioned the U.S. Department of Health and Human Services (HHS) to exercise its "march-in rights" against Xtandi. Under the Bayh-Dole Act, the federal government can reclaim and redistribute patents for inventions created with public funding—enabling generic competitors to produce cheaper versions—when "action is necessary to alleviate health or safety needs" or when an invention's benefits are not being made "available to the public on reasonable terms."
HHS Secretary Xavier Becerra referred the petition to the National Institutes of Health (NIH), whose acting Director Lawrence Tabak argued in a Tuesday letter that "Xtandi is widely available to the public on the market," citing Astellas' estimate that "more than 200,000 patients were treated with Xtandi from 2012 to 2021."
Even with insurance, co-pays for Xtandi are sky-high. Medicare recipients, for example, are expected to pay roughly $10,000 per year for the medicine. Especially for the millions of uninsured and underinsured people in the U.S., Xtandi remains completely out of reach.
Tabak's letter went on to say that Xtandi's "practical application is evidenced by the 'manufacture, practice, and operation' of the invention and the invention's 'availability to and use by the public….'" As Knowledge Ecology International executive director James Love lamented, the NIH completely elided any mention of "reasonable terms," editing out that key phrase from Bayh-Dole.
In their appeal, the petitioners wrote: "The petition focused on a single issue: the reasonableness of charging U.S. cancer patients three to six times more than residents of other high-income countries for the drug Xtandi."
"There is no dispute about the following facts," the appeal continues. "Xtandi was invented on grants from the U.S. Army and the NIH at UCLA, a public university. The patents were licensed eventually to Astellas, a Japanese drug company, with a partnership share now held by Pfizer, following its 2016 $14 billion acquisition of Medivation, UCLA's original licensee, that occurred just after the NIH rejected an earlier march-in request on Xtandi. The prices in the United States have consistently been far higher than the prices in other high-income countries."
Prior to the 2021 petition, Clare Love and prostate cancer patient David Reed filed a petition, later joined by Sachs, with the U.S. Department of Defense (DOD) after the Senate Armed Services Committee instructed the Pentagon to initiate march-in proceedings when the price of a drug created with a DOD grant exceeds the median price in seven large high-income nations. The Pentagon, however, has yet to acknowledge or act on the petition submitted to it in February 2019.
"If you consider both of these requests together, a petition to exercise the government's march-in or other rights in the Xtandi patents has been pending before the federal government for more than four years," Thursday's appeal states. "The HHS petition was filed 16 months ago."
It continues:
The petitions were filed with the DOD and HHS instead of the NIH because the NIH has repeatedly demonstrated its unwillingness to even acknowledge that the Bayh-Dole Act includes an obligation to make products invented with federal funds 'available to the public on reasonable terms.' This is demonstrated by a track record of dismissing multiple requests to use the government's Bayh-Dole safeguard to address pricing abuses and access restrictions, including those concerning the federal government's march-in rights under 35 USC § 203, and the federal government's global royalty-free license, under 35 USC § 202(c)(4). There are also extensive email records between Mark Rohrbaugh, currently NIH special adviser for technology transfer who is a long-time agency official, and lobbyists for drug companies and university rights holders, obtained through Freedom of Information Act requests, which not only express opposition to any safeguards regarding unreasonable pricing but organize public relations efforts against using a march-in request to address the pricing of products.
"HHS chose to assign to the NIH the evaluation of our petition regarding Xtandi," says the appeal. "We request HHS to consider this appeal directly, and not assign NIH to review its own decision. The latter would be tantamount to no review at all."
Since Bayh-Dole was enacted in 1980, "march-in rights have never been used... and NIH has repeatedly rejected the idea that affordability is a reasonable term," The American Prospectreported Wednesday. With Xtandi, "advocates thought they found the perfect test case for a new administration that paid lip service to lowering prescription drug costs."
As The Levernoted on Wednesday, the NIH's decision this week was consistent with Biden's track record:
Biden was vice president when the Obama administration rejected congressional Democrats' demand that the government use the same power to lower the skyrocketing prices of medicine in America.
As a senator in 2000, Biden was one of just eight Democrats who helped pharmaceutical lobbyists kill a measure spearheaded by Sen. Paul Wellstone (D-Minn.) and then-Rep. Bernie Sanders (I-Vt.) that would have reinstated the Reagan-era requirement that drug companies sell medicines developed with public money at a reasonable price.
That requirement was repealed by the Clinton administration in 1995, following pressure by drugmakers.
But Becerra's acquiescence to Big Pharma was more surprising. Prior to joining the Biden administration, the HHS secretary had expressed support for wielding the executive branch's authority to rein in soaring drug prices.
As the attorney general of California in the summer of 2020, "Becerra demanded the Trump administration use existing law to lower the price of medicines that were originally developed at taxpayer expense," The Lever reported. "As a member of Congress in 2016, Becerra signed on to a letter to the Obama Department of Health and Human Services calling on officials to broadly use 'march-in rights' to lower the cost of prescription drugs—including 'specialty drugs, like those to treat cancer, which are frequently developed with taxpayer funds.'"
Despite pressure from numerous members of Congress and medicine affordability advocacy groups, the NIH declared Tuesday that it "does not believe that use of the march-in authority would be an effective means of lowering the price of the drug."
Instead, the agency vowed to "pursue a whole-of-government approach informed by public input to ensure the use of march-in authority is consistent with the policy and objective of the Bayh-Dole Act," a move that progressive advocates denounced as a "pathetic" attempt to deflect criticism of its failure to use or threaten to use its legal power.
“This is a drug that was invented with taxpayer dollars by scientists at UCLA and can be purchased in Canada for one-fifth the U.S. price," Sanders said Tuesday. "The Japanese drugmaker Astellas, which made $1 billion in profits in 2021, has raised the price of this drug by more than 75%."
"How many prostate cancer patients will die because they cannot afford this unacceptable price?" asked Sanders, chair of the Senate Committee on Health, Education, Labor, and Pensions.
During a Wednesday hearing, Sanders made the case for changing "the current culture of greed into a culture which understands that science and medical breakthroughs should work for ordinary people, and not just enrich large corporations and CEOs."
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'Appalling': Biden Administration Declines to Force Big Pharma to Cut Price of Prostate Cancer Drug
"This decision effectively rubber-stamps continued Big Pharma abuse," said one Democratic lawmaker.
Mar 21, 2023
Patient advocates on Tuesday blasted the Biden administration's refusal to compel the manufacturer of a lifesaving prostate cancer drug developed completely with public funds to lower its nearly $190,000 annual price tag.
In 2021, prostate cancer patient Eric Sawyer petitioned U.S. Health and Human Services (HHS) Secretary Xavier Becerra to grant march-in rights—under which the government can grant patent licenses to companies other than a drug's manufacturer—for enzalutamide, which is sold under the brand name Xtandi by Pfizer and Japanese pharmaceutical giant Astellas.
The drug's development was 100% taxpayer-funded. Yet a one-year supply of Xtandi currently costs $189,800 in the United States, or up to five times more than its price in other countries.
HHS' National Institutes of Health (NIH) said Tuesday that it "does not believe that use of the march-in authority would be an effective means of lowering the price of the drug."
"What the Biden administration is saying is that charging U.S. residents three to six times more than any other high-income country is reasonable."
The agency added that it "will pursue a whole-of-government approach informed by public input to ensure the use of march-in authority is consistent with the policy and objective of the Bayh-Dole Act," a reference to legislation meant to promote the commercialization and public availability of government-funded inventions.
James Love, director of the Washington, D.C.-based advocacy group Knowledge Ecology International, called the administration's rejection "appalling."
"What the Biden administration is saying is that charging U.S. residents three to six times more than any other high-income country is reasonable," he wrote.
U.S. Senate Health, Education, Labor, and Pensions Committee Chair Bernie Sanders (I-Vt.) said in a statement that he is "extremely disappointed that the Biden administration denied a petition by prostate cancer patients to substantially reduce the price of Xtandi."
"This is a drug that was invented with taxpayer dollars by scientists at UCLA and can be purchased in Canada for one-fifth the U.S. price," Sanders added. "The Japanese drugmaker Astellas, which made $1 billion in profits in 2021, has raised the price of this drug by more than 75%... How many prostate cancer patients will die because they cannot afford this unacceptable price?"
Rep. Lloyd Doggett (D-Texas), the ranking member of the House Ways and Means Health Subcommittee, said in a statement:
Today's decision is a blow to prostate cancer patients, their families, and taxpayers. Developed with U.S. taxpayer research dollars, Xtandi costs American patients $180,000 a year—as much as six times as much as patients in other countries. This excessive price gouging cost taxpayers $2 billion to cover Medicare beneficiaries' treatment in 2020 alone. The Biden administration has missed yet another opportunity to do something meaningful to lower prescription drug costs and protect taxpayer investments.
The administration's position "protects monopolists over taxpayers and patients, despite clear statutory authority and reasonableness to intervene," Doggett added. "This decision effectively rubber-stamps continued Big Pharma abuse."
In a move that Public Citizen president Robert Weissman called "pathetic," HHS and the Department of Commerce announced Tuesday that they would "pursue a whole-of-government approach to review... march-in authority as laid out in the Bayh-Dole Act" by forming an interagency working group.
The group "will develop a framework for implementation of the march-in provision that clearly articulates guiding criteria and processes for making determinations where different factors, including price, may be a consideration in agencies' assessments."
In a statement, Becerra said that the administration is "committed to increasing access to healthcare and lowering costs."
"March-in authority is a powerful tool designed to ensure that the benefits of the American taxpayers' investment in research and development are reasonably accessible to the public," he added. "We look forward to updates from the Bayh-Dole Interagency Working Group, and at my direction, HHS will review the findings, engage the public, and better define how HHS could effectively utilize our authority moving forward."
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