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march in rights
Sanders Launches Probe of 'Outrageously Overpriced' Ozempic and Wegovy
The Senate Health, Education, Labor, and Pensions Committee chair said that the popular medications "will not do any good for the millions of patients who cannot afford them."
Apr 24, 2024
U.S. Sen. Bernie Sanders on Wednesday opened an investigation into an "outrageously overpriced" medication manufactured by a Denmark-based company whose value by market capitalization is larger than the Scandinavian country's gross domestic product.
Sanders (I-Vt.), who chairs the Senate Health, Education, Labor, and Pensions (HELP) Committee, sent a letter to Lars Fruergaard Jørgensen, CEO of Novo Nordisk. The company makes semaglutide, a glucagon-like peptide-1 (GLP-1) agonist used to treat Type 2 diabetes under the brand name Ozempic and, when sold as Wegovy, to treat obesity in adults with at least one weight-related comorbidity.
"The scientists at Novo Nordisk deserve great credit for developing these drugs that have the potential to be a game-changer for millions of Americans struggling with Type 2 diabetes and obesity," Sanders acknowledged. "As important as these drugs are, they will not do any good for the millions of patients who cannot afford them."
"Further, if the prices for these products are not substantially reduced they also have the potential to bankrupt Medicare, Medicaid, and our entire healthcare system," he added.
Sanders continued:
Today, Novo Nordisk is charging patients in the United States up to 15 times more for Ozempic and Wegovy than it charges patients in Canada, Europe, or Japan. For example, your company charges $969 in the United States for one month of Ozempic but just $155 in Canada and just $59 in Germany. Further, Novo Nordisk charges Americans $1,349 for one month Wegovy but just $140 in Germany and just $92 in the United Kingdom.
"Meanwhile," the senator noted, "researchers at Yale University estimate that both of these drugs can be profitably manufactured for less than $5 a month."
"The result of these astronomically high prices is that Ozempic and Wegovy are out of reach for millions of Americans who need them," Sanders said. "Unfortunately, Novo Nordisk's pricing has turned drugs that could improve people's lives into luxury goods, all while Novo Nordisk made over $12 billion in profits last year—up 76% from 2021. That is unacceptable."
As of March 2024, Novo Nordisk was Europe's most highly valued company by market capitalization. Its $554 billion market cap is significantly higher than Denmark's annual gross domestic product of approximately $410 billion, according to International Monetary Fund figures.
Sanders also pointed out that Novo Nordisk is charging different prices for Ozempic and Wegovy, even though they're "the exact same drug."
"Novo Nordisk charges Americans with obesity nearly $400 more every month than those with Type 2 diabetes for the same product provided in similar doses," he wrote.
"The unjustifiably high prices of Ozempic and Wegovy are already straining the budgets of Medicare and Medicaid and severely limiting access for patients who need these drugs," the letter says. "Last year, researchers at Vanderbilt University's Department of Health Policy and the University of Chicago's Department of Medicine estimated in the New England Journal of Medicine that it would cost Medicare over $150 billion a year to cover Wegovy and other similar weight loss drugs."
"To put this in perspective, the cost of all retail prescription drugs covered by Medicare in 2022 was less than $130 billion," Sanders added.
"As chairman of the committee, I am asking Novo Nordisk to substantially reduce the price of Ozempic and Wegovy so that these important drugs can be available to Americans with Type 2 diabetes and obesity," he wrote.
Existing law empowers the government to step in to lower drug prices in service of the public interest. 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.
However, U.S. administrations—including President Joe Biden's—have been loath to exercise "march-in" rights.
Under pressure from the public and lawmakers led by Sanders, Novo Nordisk last year announced that it would cut prices by up to 75% for some of its insulin products.
Responding to Wednesday's letter, Pharmaceutical Research and Manufacturers of America—Big Pharma's leading lobbyist—accused Sanders of "attacking an innovative company to advance a political agenda instead of addressing the real cause of affordability challenges."
Noting Novo Nordisk's bigger-than-Denmark market cap, Warren Gunnels, the HELP Committee's majority staff director, wrote on social media that the company "made over $12 billion in profits last year by, among other things, charging Americans $969 for Ozempic while it can be purchased for $59 in Germany and costs $5 to make."
"Our political agenda is to end this greed," he added. "Guilty. As. Charged."
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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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