Xtandi Petition Will Give Biden Administration Chance To Weigh In On Pricing, March-In Rights
Executive Summary
Prostate cancer patients press HHS for administrative hearing on march-in rights for patents covering Astellas’ Xtandi. While previous efforts have failed, petitioners believe they may have a shot this time around given Biden Administration and HHS Secretary Becerra’s views on the issue.
After striking out with previous administrations, petitioners backed by Knowledge Ecology International are once again asking the Department of Health and Human Services to grant march-in rights to Xtandi patents given the high price of the prostate cancer drug in the US. This is the first march-in case to come before the Biden Administration, which will test whether it supports using this mechanism to address drug pricing.
At a 15 December press briefing, KEI Director James Love said petitioners have asked HHS to conduct an administrative hearing to determine whether or not the approximately $156,000 annual cost of Astellas Pharma, Inc.’s Xtandi (enzalutamide) in the US can be justified in light of the fact the company charges one-fifth the price in Japan, one-quarter the price in Canada, and a fraction of the price in a number of other wealthy countries.
Asked if KEI had spoken to anyone in the Biden Administration about march-in rights, Love noted that discussions were held when the Biden Administration considered the Trump administration’s proposal to change Bayh-Dole regulations to eliminate pricing concerns as the sole ground to invoke march-in rights to seize control of patents on drugs developed with federally-funded research.
The Department of Commerce announced the proposed rule by the National Institutes of Standards & Technology in the waning days of the Trump administration. (Also see "Trump’s Legacy Versus ‘March In’ Rights" - Pink Sheet, 22 Jan, 2021.)
In March, President Biden issued an executive order on economic competitiveness that undid the proposal. (Also see "Importation, Pay-For-Delay Reform Backed By Biden Order; March-In Rights For Pricing Suggested" - Pink Sheet, 11 Jul, 2021.)
“We fully expect the Department of HHS to give a timely response to [the petition] and they’re going to own the decision one way or the other. They’re going to be either saying it’s A-okay to charge $156,000 for this drug [in the US] and a fraction of that everywhere else, or they’re going to say it’s not okay,” Love stated. “There’s going to be precedent set one way or the other.”
Love noted that the government has rights to three Xtandi patents listed in the the US Food and Drug Administration’s Orange Book and that a Canadian company, Biolyse Pharma Corp., has agreed to provide a generic version of the drug for less than $5,000 a year.
Approach To Patents During The Pandemic
Becerra and Biden have both expressed support for loosening patent restrictions for COVID-19 vaccines and treatments.
Last year, as attorney general of California, Becerra co-led a bipartisan multistate coalition that sent a letter to HHS, NIH and FDA asking them to use their legal authority under Bayh-Dole to ensure Americans can afford and have access to a sufficient supply of Gilead Sciences, Inc.’s COVID-19 treatment Veklury (remdesivir). Alternatively, they asked that the agencies assign states the ability to use march-in rights. (Also see "Biden’s HHS Pick Sought ‘March In’ Rights For Veklury; Targeted AbbVie ‘Pay For Delay’ Tactics" - Pink Sheet, 8 Dec, 2020.)
But Becerra was circumspect on the issue during his confirmation hearing, saying the letter was written when there was a rapid increase in COVID-19 cases. (Also see "US HHS Nominee Becerra Treading Carefully On ‘March In’ Rights" - Pink Sheet, 3 Mar, 2021.)
The Biden administration also took a sharp turn when it declared support for a proposal before the World Trade Organization to waive intellectual property protections for COVID-19 vaccines during the pandemic. (Also see "US COVID Vaccine Patent Waiver Is Big, Symbolic Blow For Pharma, But The Fight Is Just Beginning" - Pink Sheet, 5 May, 2021.)
So far, though, the administration has not taken aggressive action to overcome the opposition of other countries to the proposal.
It remains to be seen if this openness to revised patent policy extends beyond COVID products. But the grant of march-in rights seems unlikely as no government agency has ever invoked them. As of April 2019, the NIH had received 12 requests to initiate march-in proceedings. (Also see "End Of The 'March-In' Pricing Petitions? " - Pink Sheet, 24 Apr, 2019.)
One HHS Hearing On March-In Request
Clare Love and David Reed submitted a petition to the Department of Defense in February 2019 requesting march-in rights to patents on Xtandi “in order to ensure that U.S. residents have access to the invention on reasonable terms,” as required under the 1980 Bayh-Dole Act. Robert Sachs, a member of the board of trustees of the Dana Farber Cancer Institute, sought to join the petition in April. Love’s brother is also a petitioner.
During the press briefing, Sachs noted that his co-payment for Xtandi, which is covered by Medicare, is about $700 a month.
In a 18 November letter to Becerra, Love and Sachs asked for a hearing on the petition where the patent holders and individuals supporting the petition can present evidence.
Love noted that HHS has held only one public hearing on a march-in request, in 2004 for the HIV drug Norvir (ritonavir). He said that Abbott subsequently agreed to roll back the price of the drug 80% for people in federally-funded programs.
KEI and the Union for Affordable Cancer Treatment also submitted an Xtandi march-in petition to NIH and the DoD in 2016. NIH rejected the request.
NIH Director Francis Collins expressed his views on the petition at a 2016 congressional hearing, saying he believed march-in rights do “not appear to be designed to be utilized in a fashion where the price is the obstacle,” but rather used where the product is not available because it is not being commercialized and NIH has the authority to step in and take over. (Also see "NIH Reluctant To “March In”: Collins Suggests Authority Not Intended To Address Pricing Concerns" - Pink Sheet, 20 Apr, 2016.)
Now, however, the current petitioners state in their letter that “it is our understanding that HHS is now willing to consider the merits of a march-in request, when the basis is that the price is demonstrably unreasonable.”
The department’s decision may depend on who replaces Collins at the helm of NIH. Collins, who became director in 2009, announced in October that he would be stepping down by the end of the year. The administration said at the time it expected to nominate a replacement before his departure. (Also see "NIH Director Collins’ Departure May Revive Patent March-In Debate" - Pink Sheet, 5 Oct, 2021.)
In keeping with the relatively measured pace of nominations for health positions in the Biden administration, that hasn’t happened. On 9 December, Becerra announced that Lawrence Tabak, the principal deputy director of NIH, will serve as the acting director starting on 20 December.