NIH Could Get Royalties, Not Input On Pricing, From R&D Investments, Collins Says
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Federal funding for research and development of drugs can garner royalties for the U.S. Treasury but does not provide leverage to affect pricing decisions, National Institutes of Health Director Francis Collins told a Senate appropriations subcommittee May 11. What NIH can do when it has supported a successful product "is to make sure that if profits ensue, and NIH has made a contribution to that in terms of genuine intellectual property discoveries, that there should be royalty sharing on that basis," he told the Senate Appropriations Labor/HHS/Education Subcommittee, which met to consider the NIH fiscal year 2012 budget (see related story, (Also see "Collins Promises To Send NCATS Funding Proposal To Congress Within Weeks" - Pink Sheet, 16 May, 2011.)). Collins' comments came in response to complaints by Sen. Sherrod Brown, D-Ohio, that NIH has provided $21 million to support clinical trials for KV Pharmaceuticals' preterm birth prevention drug Makena (hydroxyprogesterone caproate), also known as 17P, for which the company is charging an "outrageous" price, Brown said. In this case, U.S. taxpayers are gaining no benefit from either royalties or low prices. That is because the key element of Collins' statement is that royalties are contingent on NIH participation in the IP discoveries.
NIH Support For Makena (17P)
While NIH has funded clinical trials for Makena, it did not invent the drug and does not have an interest in its IP, the agency told "The Pink Sheet." Therefore, there are no royalties to NIH. Makena was provided to patients by compounding pharmacies for about $20 per injection prior to its approval by FDA as an orphan product Feb. 3. KV initially priced the drug at $1,500 per injection, or $22,500 to $30,000 for a full course of treatment, and then backpedaled to $690 per injection following an outcry by physicians, insurers and members of Congress and FDA's announcement that it would not take enforcement against those who continue to compound the drug (Also see "FDA Steps Into Makena Pricing Dispute In The Name Of "Access"" - Pink Sheet, 4 Apr, 2011.). "When it comes to setting the price, as KV did," Collins said, "even though we supported the clinical research, we are probably not the agency in a position to be able to do something to step in and interfere with their pricing decision." The inclusion of a reasonable pricing clause in licensing agreements between NIH and companies was debated and rejected in the 1990s, he said. "It was a poison pill for any serious relationship that NIH would have with a company," Collins explained. "No company in this country or elsewhere would be interested in a partnership with NIH under those circumstances." |