- The National Institutes of Health on Monday decided against using so-called 'march-in rights' to override the patent rights on Astellas Pharma's prostate cancer drug Xtandi.
- Several consumer groups had asked the agency back in January to invoke the little-used authority to lower Xtandi's $129,000-a-year price tag in the U.S. One of the groups, Knowledge Ecology International (KEI), said it would appeal the NIH's rejection.
- In a letter to KEI, NIH Director Francis Collins noted the drug was not currently in short supply and is broadly available. The groups argue Xtandi's high price limits patient access and prompts insurers to place the drug on restrictive formularies.
Under the Bayh-Doyle Act, march-in rights allow federal agencies which have funded the development of an invention—such as a new drug—to license that invention to a third party if "action is necessary to alleviate health or safety needs."
Xtandi, which is co-marketed by Astellas and Medivation in the U.S., was initially developed at the University of California, Los Angeles, with some funding from both the NIH and the Department of Defense.
KEI, along with other consumer groups, want the NIH to use its march-in rights to license Xtandi out to another drugmaker, thereby lowering the price. According to KEI, the $129,000 U.S. list price is two to four times the cost of the drug in other high-income countries.
The groups went as far as lining up a third party supplier, the Canadian drugmaker Biolyse Pharma, which had claimed it could provide generic 40-mg tablets of Xtandi for $3 per pill, versus the $69.41 it says Medicare paid for Xtandi in 2014. That offer was contingent on the U.S. government using its royalty-free rights, however.
But the NIH's decision hinged on whether or not the drug is in short supply or available in the U.S. In rejecting the drug, Collins noted "Xtandi is broadly available as a prescription drug."
In a response, KEI argued this consideration is not required under the law.
"The written response from Dr. Collins seems to rest his decision in large part on the lack of evidence that Xtandi ‘is currently or will be in short supply.’ Yet there is no such precondition for the government's royalty-free license," said Andrew Goldman, counsel for policy and legal affairs at KEI.
The federal government has debated but never utilized march-in rights. In 2004, the NIH considered using the authority for the drugs Norvir and Xalatan, and took up the case of Norvir again in 2013, but decided against invoking it each time.
A group of 12 lawmakers had pushed the NIH to do so for Xtandi as well, sending a letter in March to the NIH and the Department of Health and Human Services.
"We do not think that charging U.S. residents more than anyone else in the world meets the obligation to make the invention available to U.S. residents on reasonable terms," the lawmakers, who included Senator and presidential candidate Bernie Sanders, wrote at the time.
KEI will appeal the NIH's decision and the group's director, James Love, said KEI would re-file the case next year after a new president is elected.
"The NIH is throwing the federal government’s leverage on the drug’s price into a trash can, along with the interests of every U.S. resident that pays for this drug directly or indirectly," Love said.
March-in rights, and Xtandi's case, had garnered more attention given the current environment around pricing and value, which continues to roil the industry.
Editor's note: A previous version of this story said the federal government had used march-in rights before, in 2004 and 2013. That is incorrect. The National Institutes of Health decided against using the authority each time.