Prostate cancer drug Xtandi, discovered with taxpayers’ money from the National Institutes for Health and the US military, is being sold in the United States by Japanese company Astellas Pharma for five times the price at which it is sold in Japan. The cancer treatment retails for $130 per 40mg capsule, which means that unless the estimated 250,000 American men who suffer from prostate cancer have good health insurance, they will pay nearly $190,000 a year for life-saving cancer treatment.
This price may seem absurd for a drug invented by the public sector. And indeed, there is already a law on the books that could be invoked to prevent Americans from getting ripped off. Unfortunately, past administrations have refused to use it.
In 1980, Congress passed the Bayh-Dole Act, which gave universities, research institutes, and pharmaceutical companies the right to own and commercialize patents for inventions developed with federal funding. Since its enactment, the law has been hailed as a huge success in promoting partnerships between public and private institutions that have brought several new drugs to market. The problem, however, is that although many new drugs have been developed, drug companies are pricing new drugs beyond the means of most Americans.
Bayh-Dole included a provision known as “entrance fees” that would allow the federal government to step in if inventions developed with government funding were not made available to the American people “on reasonable terms.” . Frustratingly, the drafters of the bill never define what they meant by “reasonable”; but a reasonable mind would assume that means the average American could access and afford drugs they once paid for with research money in tax dollars.
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In the 40 years since Bayh-Dole’s enactment, a lot of lobbying money from big pharma has been spent to ensure drug prices are anything but reasonable. Americans pay an average of 256 times more for prescription drugs than other developed countries, despite the fact that the US government, through the National Institutes for Health (NIH), is the largest funder of drug subsidies. medical research in the world with a 2021 budget of nearly $52 billion. The money has been poured into almost every drug on the market – the 210 drugs approved by the FDA between 2010 and 2016 received NIH funding totaling $100 billion. And pharmaceutical companies rely on this funding to develop drugs, even if they don’t receive the money directly from the NIH.
A common practice is that public money is used to fund basic research which is then bought by a biotech start-up and then sold for huge dollars to Big Pharma. Under the Bayh-Dole provisions, when the pharmaceutical company buys the government-funded research, it also gets the accompanying patent. The drug company then puts the finishing touches on the final stages of clinical trials, then packages the drug and sells it to Americans at ridiculous prices. Entrance fees have been put in place to prevent this last game.
To date, the marching orders have never been used, despite multiple petitions to Health and Human Services (HHS) for the government to intervene. Robert Sachs, a retired attorney and consultant with advanced prostate cancer, called on HHS to enforce the government’s march. -in rights for Xtandi. In October, Sachs told me that even with Medicare, co-payments could reach $10,000 a year.
“The March orders would empower the US government to prevent pharmaceutical companies from dictating exorbitant prices for taxpayer-funded prescription drugs,” Sachs said. “These were terms accepted by patentees when they accepted federal grants. By exercising entry fees, it would bring some rationality to pricing some of these specialty drugs at obscene prices.”
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The pharmaceutical industry, unsurprisingly, is against the use of work orders because it claims that any state intervention would create uncertainty and make pharmaceutical companies reluctant to invest in government-funded research at a early stage. A February 2020 report from Phrma, a pharmaceutical lobbying group, said any company that buys government-funded research is: “under the assumption that it will have the opportunity to recoup those investments without the added risk of ‘arbitrary and unforeseen government action and unpredictable price-setting after years of investment.’
But neither Pfizer nor Astellas Pharma have made the biggest investments in Xtandi. The drug was developed with public funding at the University of California, Los Angeles and sold for $1.14 billion. , then Pfizer bought Medivation for $14 billion. Xtandi has already earned its patent holders $20 billion in revenue since its discovery.
Another often-heard argument against the use of marching orders is that the law’s two drafters, Senators Bob Dole and Birch Evans Bayh, said after leaving Congress that the “on reasonable terms” provision has no never meant to include prices. According to the editors, the only thing required of pharmaceutical companies is that inventions developed with public funds must then be marketed in the United States, regardless of the price offered.
After leaving Congress, the two senators continued to work for pharmaceutical companies that had a vested interest in ensuring that passing orders were never used. Bob Dole starred in Pfizer’s Viagra commercials, and Bayh later worked as an associate at Venable, which in 2004 represented pharmaceutical company Abbott. That same year, Pfizer and Abbott were the subject of running order requests. Former Senator Bayh attended an NIH meeting on March 25, 2004 to testify against the use of marching orders to control drug prices. James Love, director of Knowledge Ecology International and applicant for the marching orders wrote, “I was at the NIH meeting and listened to Bayh begin his testimony by claiming that ‘no one’ had paid him to attend the meeting… Would it have made a difference if Bayh had revealed that his company was in fact representing Abbott? I think it would have been.”
Robert Sachs’ petition marks the second petition regarding Xtandi sent to health and social services. The first was filed in 2016 and was rejected because former NIH director Francis Collins said the drug was not in short supply and widely available as a prescription drug in the United States. The fact that the drug was exorbitant and therefore inaccessible to many Americans was not a factor.
There is reason to hope that this time around things might be different. Days before he left office, Trump asked the National Institute of Standards and Technology (NIST) to remove pricing in consideration of “reasonable terms” from the March orders in the Bayh-Dole Act. On July 9, the Biden administration issued an executive order opposing Trump’s attempt to narrow the definition of reasonable pricing terms, which sent a strong signal to the pharmaceutical industry that March orders could soon be In progress.
Another promising sign is that current HHS Secretary Xavier Becerra sent a letter to the NIH and FDA when he was California’s attorney general urging institutions to use marching rights to increase access to Remdesivir. , which is used to treat COVID .
Controlling drug prices has been a huge challenge for this administration. The Build Back Better Act has been watered down its key provisions that would allow Congress to negotiate directly with drug companies to control drug prices, and there is still no guarantee the bill will become law. The advantage of using marching orders to control prices is that Biden could cut drug costs without needing a single vote from a Republican congressman. Between 2012 and 2019, Medicare distributed $5.8 billion to Xtandi, although the government has already paid for some of the initial research. The US government could cut spending by up to 80% if the drug were matched to the same prices paid by Canada, Australia or Japan.
On Tuesday, U.S. Representatives Peter DeFazio (D-OR) and Lloyd Doggett (D-TX) sent a letter to HHS asking the administration to intervene and use the entry fees on Xtandi.
“There is absolutely no reason for American taxpayers to pay FIVE times the cost for the exact same drug that would not have been possible without the research funded by them. The administration must act now to curb Big Pharma’s greed and send a clear message that the price-taxpayer gouging will not be tolerated,” Rep. DeFazio wrote.
HHS said it would issue a ruling on Xtandi this month.
Inside Big Pharma: