NIH Director Collins Stays On: Continuity For ‘Moonshot’ – And Barrier To ‘March In’

For industry, the sole health agency head held over from the Obama Administration means the ‘Moonshot’ priorities will move forward – and one possible threat to pricing is cut off.

US National Institutes of Health Director Francis Collins will be staying on into the Trump Administration, the sole health agency head held over from the Obama Administration.

Collins will thus be in place to oversee the immediate implementation of the “21^st Century Cures” Act, which included new funding for the current fiscal year to support the cancer “Moonshot” initiative. While the Moonshot priorities looked likely to move forward regardless of the changeover in Administration, Collins’ retention atop NIH should remove any doubt. (See sidebar for related story.)

An arguably more important implication may be in ruling out any near-term attempt by the Trump Administration to embrace the idea of using of “march in” rights on patents licensed from NIH to attack drug prices.

In the days leading up to Inauguration Day, President Trump reiterated his support for Medicare drug price negotiation. However, as was the case with the Obama Administration, the support of the President does not by itself create mechanisms to make “negotiation” – or any other administered pricing system – feasible. (Also see "The Bully Pulpit: Trump Versus Drug Prices" - Pink Sheet, 18 Jan, 2017.)

Advocates for price negotiation, however, argue that one option would be for the White House to threaten to “march in” on patents derived from federally funded research in cases where a product’s price is deemed unreasonable and a sponsor refuses to negotiate a lower price. The case would be built on the claim that technology transfer agreements allow NIH to march in when the patent-owner fails to supply the market – and, advocates argue, an excessive price means that the product is unavailable to many purchasers.

Francis Collins

That argument may be unlikely to survive a court challenge, but clearly the biopharma industry would prefer not to have to face proceedings on those grounds at all.

And, under Collins’ leadership at NIH, biopharma companies almost certainly won’t. In 2016, Collins responded to a “march in” petition on Pfizer/Astellas’ Xtandi with a definitive rejection of the pricing argument. The “march in” rights are available only in the case of a literal failure to supply the market – ie, a shortage or commercial decision not to sell in the US. (Also see "Reining In “March In”: NIH Rejects Xtandi Petition" - Pink Sheet, 6 Jul, 2016.)

Collins’ decision to reject the petition without even going through the motions of an administrative hearing speaks to a commitment on his part to keep NIH out of debates over drug pricing. Since taking the reins at the agency, Collins has been eager to build new collaborations with industry to support translational research and data sharing – with the “Moonshot” a capstone example. He clearly views any direct engagement in commercial/pricing policies as likely to undercut that climate of partnership.

There is, of course, nothing to stop the Trump Administration from deciding that it will seek to “march in” as a policy to enforce lower pricing. But Collins will clearly remain a voice arguing against such an approach – and his own memo on Xtandi will be a strong supporting argument for companies to use in fighting back.