NIH urged to 'break taboo' against using its power to bypass drug patents

The National Institutes of Health (NIH) has said that it would take "extraordinary" circumstances to use its little-known power to bypass certain drug patents.

But as skyrocketing costs draw criticism from patients, payers and the public, two organizations are calling on the NIH to exercise those "march-in rights" on pricey drugs developed with federal funding.

As Knowledge Ecology International (KEI) and the Union for Affordable Cancer Treatment (UACT) point out, Congress granted those rights in 1980, allowing the NIH to open branded drugs to early generic competition for public health reasons. So far, the agency hasn't.

"The NIH has built a big capital around march-in rights. Every year passes that they don't approve a case, it makes the taboo bigger and bigger," KEI Director James Love told FiercePharma. "We'd like to break that taboo, so people realize that march-in rights actually mean something and that they're meant to protect the public."

In a letter to the NIH, the U.S. Department of Health and Human Services (HHS) and the U.S. Department of Defense (DOD) this week, KEI and UACT urged the NIH to implement its march-in rights on Astellas Pharma's prostate cancer drug, Xtandi.

Under the Bayh-Dole Act, which governs intellectual property that arises from federally funded research, such action is warranted when it's necessary "to address public health and safety concerns that are not being reasonably satisfied" or when the benefits of a patented drug "are not available to the public on reasonable terms." The idea is similar to compulsory licensing rules in India, where in 2012, Bayer was forced to allow Natco Pharma to sell its version of the patented cancer drug Nexavar.

Xtandi, developed at the University of California, Los Angeles (UCLA), with the help of NIH and DOD funding, costs about $89 for a 40-mg capsule in the U.S. For comparison's sake, the same dose costs less than a third that much--about $26--in Japan. The drug's high price, along with its history of U.S. government funding, "made it a good candidate" for KEI and UACT's petition, Love said.

"We like this case because the facts are so strong," Love said. "Seeing that Americans shouldn't be paying three times what the Japanese pay for the same drug isn't rocket science. It's something that the government should be able to pull the trigger on."

Ruth Lopert, a member of the UACT who helped draft the organizations' letter, had a similar viewpoint on the NIH's lack of action regarding march-in rights. "Over the years, there have been a number of applications or petitions for the NIH to exercise march-in rights, and the agency has consistently refused to do this," Lopert told FiercePharma. "How egregious does the situation have to be before the NIH says, 'yeah, I have to do something about this?'"

For KEI, Xtandi is the first of many drugs that the organization plans to use to make its case to the NIH to curb rising drug prices. The organization is "looking at a couple dozen products right now," Love said, including UCB's seizure med Vimpat, Spectrum Pharmaceuticals ($SPPI) and Allos Therapeutics' orphan drug Folotyn, and Sanofi's ($SNY) Gaucher's med, Cerdelga.

But KEI could face serious roadblocks along the way. The NIH "in 35 years has never agreed with a request for march-in rights, particularly in the context of high drug prices," Aaron Kesselheim, associate professor of medicine at Harvard Medical School, told FiercePharma. And some might argue that march-in rights are already working, he added, because companies are doing their due diligence and making intellectual property available.

While "there are a limited number of products and a limited number of circumstances in which it could work or make a difference," the NIH acting on drug pricing could send an "important signal" to the industry, Kesselheim said: "These are important issues that patients are struggling with. There may be some symbolic importance to more attention to this area."

Meanwhile, Astellas is standing by its pricing for Xtandi. The company and partner Medivation ($MDVN) "have made a significant investment and have taken significant risk in bringing (Xtandi) to market because we believe in the benefit that the drug could have for patients," Astellas told FiercePharma in an email. "We remain committed to working collaboratively with all parties that can help meet the dual imperatives of encouraging drug development and innovation while ensuring access to and affordability of these medicines."

- here's the letter (PDF)
- get the statement (PDF)