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Executive Summary

BRISTOL-MYERS SQUIBB CALLS TAXOL "UNPATENTABLE," thereby limiting any exclusivity for the anticancer compound. Addressing a July 29 House Small Business/Regulation Subcommittee hearing, Bristol VP-Licensing, Z. P. Horovitz stated: "The compound is neither patented nor patentable; therefore, we do not have exclusive intellectual property rights to taxol." In opening remarks, Committee Chairman Wyden (D-Ore.) contended that the Pacific yew tree harvesting agreements and taxable cooperative research agreements negotiated between the federal government and Bristol-Myers Squibb are "extraordinary, because they give near-total control of a life-saving plant species to one drug company, and because they provide exclusive, federally-funded technology to Bristol-Myers." Horovitz said that characterization is "simply not true," and also noted that the harvesting agreements cover only federal lands. However, the terms of Bristol's 1990 Cooperative Research and Development Agreement (CRADA) with the National Cancer Institute have been described by Bristol as permitting the company "limited exclusivity in the marketplace" -- five years if its NDA is approved and seven years for a potential orphan drug designation for ovarian cancer treatment ("The Pink Sheet" June 24, T&G-10). The other main indications under research are breast and non-small cell lung cancers. Wyden asserted that the research agreements "offer no protection to cancer patients from price-gouging," despite federal research investments. Reid Adler, director of NIH's Office of Technology Transfer, replied that the CRADA includes a "fair pricing" clause, which stipulates that there be "a reasonable relationship between the pricing of a licensed product, the public investment in that product, and the health and safety needs of the public." Adler also noted that NIH has the authority to revoke the CRADA, an action that, if taken, would mean that companies other than Bristol-Myers could have access to data from taxol clinical trials. On the other hand, NCI's Bruce Chabner commented that CRADAs do not include specific auditing powers or arbitration mechanisms to negotiate drug prices. He remarked that in general, an arbitration process, if developed up front by government and private industry, might be a "reasonable" idea. Addressing the market competition issue, Chabner stated that Rhone-Poulenc Rorer has already developed a semi-synthetic version of taxol that does not depend on yew bark. He also emphasized that NCI is "vigorously attempting to develop other taxol-like drugs," and that "these would be available through patent licensing on a competitive basis to all pharmaceutical companies." Within the next two months, NCI will award $ 1.3 mil. to fund 10-13 studies on biological and chemical studies of taxol. Reflecting his role as a representative of a timber state, Wyden pointed to discrepancies in calculations for the number of harvestable yew trees growing in federal forests. James Overbay, deputy chief of the National Forest System at U.S. Forest Service, acknowledged that the current estimate of 23 million trees is "a guess," but added that a more thorough and detailed inventory on yews is expected to be completed within a year. Under the harvesting agreement with the USFS and Bureau of Land Management, signed in June of this year, Bristol-Myers Squibb will provide substantial support for ecological research on Pacific yews, Bristol's Horovitz told Wyden. Ongoing meetings between the company, BLM and USFS will result in release of a final plan this September that specifies the amount of support that Bristol-Myers will provide for ecological research, he said. "Total expenditures will likely amount to millions of dollars annually," he added.

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