The U.S. government has for the second time rejected advocacy groups’ request to seize patents for the prostate cancer drug Xtandi, claiming its high price is not a barrier to wider access for a medicine developed in part with federal funding.
Yet, while it rejected the petition from Knowledge Economy International and Universities Allied for Essential Medicines, the Department of Health and Human Services also announced it would review its so-called “march-in” authority to determine if there are criteria under which high prices could justify patent seizure. The review is part of a Biden administration push to use federal government tools, including antitrust authority and negotiating power, to control the price of prescription drugs.
The two advocacy groups petitioned HHS in November 2021, asking the government to invoke march-in rights for Xtandi under the Patent and Trademark Law Amendments Act passed in 1980. That law sought to make it easier for research institutions and businesses to patent and commercialize inventions that were backed by U.S. government grants or other assistance.
The law permits the government to “march in” and seize those patents when they are not made available to the public on reasonable terms. KEI and UAEM have for years argued that the $156,000 annual price of Xtandi, invented at the University of California, Los Angeles, with funding from the National Institutes of Health, means that it is not available on reasonable terms, especially when compared to its price in other countries.
NIH has once before rejected this argument, claiming Xtandi’s broad accessibility by prescription means it is available on reasonable terms. The two sponsors of the 1980 law, the late Sens. Birch Bayh and Bob Dole, in the past argued that it “makes no reference to a reasonable price that should be dictated by the government.”
In a Tuesday letter reaffirming the previous decision on Xtandi march-in rights, NIH acting director Lawrence Tabak wrote the agency doesn’t believe march-in proceedings would be an “effective means” of lowering its price. Tabak pointed to Xtandi’s approaching 2027 patent expiration and the lengthy process for invoking march-in rights as reasons to reject the petition.
In addition, other government initiatives could play a role in restraining the price of Xtandi, which is sold by Pfizer and Astellas. “As a practical matter Xtandi is likely to be among the initial targets of the new Medicare price negotiation authority when the first year’s selections are announced in September,” wrote T.D. Cowen analyst Rick Weissenstein in a note to clients.
The review of march-in rights initiated by HHS Tuesday will take a “whole of government” approach that will involve convening an interagency working group, including HHS and the Commerce Department. In 2023, the working group will convene a workshop “to assess when the use of march-in is consistent with the policy and objectives of the Bayh-Dole Act.”