Nearly four dozen lawmakers asked the White House to make sure any treatment for the fast-moving coronavirus that’s developed with U.S. taxpayer funds is fairly priced, a problem that has previously emerged about other nascent medicines thanks to angst over the value of prescribed drugs.
In a letter sent Thursday, 46 members of Congress urged the Department of Health and Human Service to not issue an exclusive license to any drug maker that develops a coronavirus treatment over concerns that “providing monopoly rights could end in an upscale medicine that’s inaccessible, wasting public resources and putting public health in danger within the U.S. and around the globe.”
Instead, they urged the Trump administration to issue limited licenses requiring companies to form any treatment available at a reasonable price, although the lawmakers didn’t offer an approach for a way which may be established. They also insisted that HHS intervene if a drug maker prices treatment for Covid-19, the disease caused by the new coronavirus, at an “excessive” price, which wasn’t defined.
The lawmakers pointed to a deal this month between the HHS Biomedical Advanced Research and Development Authority or BARDA, and Regeneron Pharmaceuticals (REGN) to develop a treatment for the coronavirus, BARDA agreed to pay 80% of R&D and manufacturing costs, after providing $8.9 million to support the development of a treatment for Middle Eastern respiratory syndrome, or MERS.
“There must be guardrails in situ to stop Regeneron from monopolizing the drugs and maximizing profits,” they wrote within the letter, which was spearheaded by U.S. Rep. Jan Schakowsky (D-Ill.).
We should not grant any manufacturer a blank check to monopolize a coronavirus vaccine or treatment developed with public, taxpayer support. Without aggressive action to guard public health, we are fearful that Americans and other people in lower- and middle-income countries won’t be adequately protected against current and future coronavirus outbreaks.”
We asked HHS for a comment and can update you accordingly.
A Regeneron spokeswoman didn’t address the licensing issue but maintained the corporate is “working round the clock” to develop a treatment to combat the coronavirus and is “committed to making sure any potential medicines reach patients in need around the globe. We’re proud to partner with BARDA on this effort.”
In arguing their case, the lawmakers pointed to a study released Thursday shows that the pharmaceutical industry has devoted little of its resources to developing a salve for the newest coronavirus disease. All six of the active coronavirus clinical trials that began before the outbreak received some sort of taxpayer or public support, consistent with the report by Public Citizen.
Since the emergence of SARS, or severe acute respiratory syndrome, 17 years ago, the National Institutes of Health has spent nearly $700 million on coronavirus R&D, the buyer advocacy group wrote in its report. As of Feb. 5, there has been a minimum of 25 different vaccine and treatment efforts for Covid-19, and two-thirds have support from nonprofit and public institutions.
Such concerns have increasingly emerged in recent years about medicines that are discovered with taxpayer funds.
Why? Consumer advocates and lawmakers argue that public financing greases the wheels that make it possible for drug makers to further the research and, eventually, commercialize the discoveries. And in an era of rising drug prices, they maintain drug companies too often fail to acknowledge the role that taxpayer dollars play in drug discovery and later unfairly profit at taxpayer expense.
“The pharmaceutical industry has broadly claimed that that the monopoly-based legal system ‘is the foremost effective tool to reward and incentivize innovation’ and ‘fulfills the promise of breakthroughs in treatments and cures for … many debilitating or life-threatening illnesses around the world.’ Yet the monopoly model has not driven significant industry investment in infectious diseases, including coronaviruses,” Public Citizen wrote in its report.
“Implementing an approach that appears beyond monopolies could help make sure that taxpayers don’t pay twice. U.S. taxpayers are compensated for his or her significant investment in biomedical research and development by being charged the very best medicine prices within the world.”
The issue figured prominently three years ago when the U.S. Army sought to strike an affect Sanofi (SNY) for a Zika vaccine that was being developed partially with taxpayer funds. Several lawmakers and advocacy groups pressed the military to eschew an exclusive license or, if that wasn’t possible, obtain a guarantee over affordable pricing. Sanofi refused and work on the vaccine was subsequently halted.
In general, however, manufacturers are reluctant to plan to price terms while such projects are within the early stages of development. For this reason, the NIH in 1995 removed what were called “reasonable pricing” clauses from cooperative R&D agreements. At the time, former NIH director Dr. Harold Varmus described such clauses as a “restraint” on new development.
Meanwhile, the NIH has complained that drug makers aren’t stepping up to develop a Covid-19 treatment, although Sanofi in the week agreed to figure with BARDA to develop a vaccine and Johnson & Johnson (JNJ) also will attempt to produce a vaccine.
In response, the PhRMA industry trade group later sent us a press release, saying “In situations of high public health need and urgency, our shared goal should be to encourage the development of solutions to diagnose and treat a disease like COVID-19, and we should be wary of policies that would prevent them from being developed. There are enormous upfront costs and risk related to vaccine development, including significant scientific and regulatory challenges.”
“It’s especially troubling the signers are criticizing steps taken by the BARDA to develop a COVID-19 vaccine. BARDA is an innovative model that permits the govt to partner with industry to accelerate research and development of medical therapies for patients. The agency was created by Congress to market responses to serious threats that might not rather be commercially viable. Current law permits exclusive licenses to be granted only NIH determines the license is important to develop, manufacture and convey a product to plug. Obstructing that process does a disservice to Americans and other people around the world who may benefit from new treatments or vaccines.”