Senators lay into Sanofi for Zika vaccine deal, call for public hearing

Sanofi is under fire for reportedly rejecting pricing assurances as part of a Zika vaccine license deal with the U.S. government.

Sanofi’s commitment to limit price hikes hasn’t won over six U.S. senators who are railing on the drugmaker for a Zika dustup that’s gained considerable attention since vaccine licensing plans were announced late last year.

The lawmakers—Sens. Dick Durbin, D-Ill., Sherrod Brown, D-Ohio, Bernie Sanders, I-Vt., Richard Blumenthal, D-Conn., Ed Markey, D-Mass., and Angus King, I-Maine—sent letters to top officials at the U.S. Army and Sanofi, urging pricing assurances should the vaccine candidate make it to market.

The Zika virus has subsided since its initial explosive spread around the globe, but the senators note that 40,000 people in U.S. states and territories contracted the disease.

In their correspondence to Sanofi CEO Olivier Brandicourt, the lawmakers called the French drugmaker's recent pledge to limit price hikes at health inflation, projected to hit 5.4% in 2017, a "nominal positive first step." As they point out, the company could simply set its initial prices high and raise them only slightly each year, a strategy that would still lead to burdensome drug costs.

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The lawmakers said they’re “deeply troubled” by reports that Sanofi won’t agree to pricing assurances in its Zika vaccine licensing arrangement with the U.S. Army, first disclosed in December. So far, the government has put up $10 million to support initial research on the candidate and another $43 million for testing, the senators note. A further $130 million could be awarded for late-stage studies.

The senators argue that 95% of the National Institutes of Health's licensing agreements with industry aren't exclusive, and that Sanofi stands to gain considerably from the project whether or not the license is exclusive.

"Given all this, it is incomprehensible that Sanofi would still seek a monopolistic license from the Army without including a commitment to set an affordable price for this product," the lawmakers wrote to Brandicourt.

An exclusive license would provide monopoly rights for the shot through 2036, but wouldn't preclude other companies, some which are partnered with the U.S. government, from advancing their own work through the clinic and potentially to the market to compete on price. Plus, there’s no guarantee Sanofi and the Army will be successful. In defending the plan against criticism back in April, an Army official argued that exclusive licenses are often the only incentive great enough to attract a "competent and willing commercial partner."

RELATED: Sanofi's Zika-shot pricing dust-up highlights a divide over taxpayer-backed vaccine R&D

Market-watchers have said Zika shots could be worth $1 billion a year or more. Takeda and GlaxoSmithKline also have Zika vaccine R&D partnerships with the U.S. government, and dozens of other candidates against the virus are in various stages of development.

On Monday, the senators called on Sanofi to publicly disclose its Zika vaccine R&D spending split out by year, and to disclose the amount it’s received from U.S. institutions "for all research, purchase agreements and reimbursements for Sanofi's licensed drugs in the last five years."

The letters are part of an effort by the senators to ensure a "reasonable and responsible price" for the potential Zika vaccine. They also wrote to acting Army secretary Robert Speer requesting a public hearing on the matter to discuss the role of federal funding, timing for the license and more.

In response, a Sanofi spokesperson said the company's "discussions with the Army have been ongoing and have covered a range of technical issues typically covered by licensing agreements, including milestone and royalty payments Sanofi Pasteur would pay to the WRAIR to recover the Government’s development costs."

RELATED: Lawmakers in hard-hit Florida want public hearing in Sanofi Zika vaccine scuffle

The senators' interest in the license follows letters by Florida lawmakers who also called for a public hearing, and a New York Times op-ed by Sen. Sanders urging the Trump Administration to reject what he called a “bad deal” for U.S. taxpayers.

Along the way, Sanofi representatives have said it’s in the best interest of the company to price the potential vaccine “in a way that will facilitate access.” A U.S. Army official responded to criticism by saying his group can’t “define, implement and enforce 'affordable prices' or … set price controls for a potential vaccine that will require great investment and face high risk of failure.”

Scrutiny on the license comes as Sanofi struggles to meet sales expectations with dengue vaccine Dengvaxia. After executives touted early expectations of €200 million for 2016, the vaccine turned in just €55 million in global sales last year. Sanofi spent $1.5 billion and 20 years developing the shot. First-quarter sales for the vaccine this year totaled €17 million.