President Joe Biden’s administration has decided not to pursue an untested legal strategy that could dramatically lower the cost of medication for prostate cancer patients, angering key lawmakers who fear the administration is punting on challenging the power of the pharmaceutical industry.
Patient advocates and progressives had hoped the administration would use its executive powers to enable production of generic versions of Xtandi, a prostate cancer drug developed with federal funding at UCLA. The drug’s manufacturer charges up to $190,000 a year for the drug in the United States while charging a fraction of that price in other developed countries.
That price imposes a significant, sometimes crushing financial burden on some individual patients while significantly driving up costs for the federal government as well. And advocates say it doesn’t have to be that way.
Specifically, they say, the federal government has authority to “march in” and claim rights to produce drugs developed with federal research funding if drug companies do not make them available on a “reasonable basis.” The government could then license production to other firms or, in theory, produce the drug on its own.
As this argument goes, the source of that authority is the 1980 Bayh-Dole law, which is named for its co-sponsors, the late Sens. Birch Bayh (D-Ind.) and Bob Dole (R-Kan.). By using Bayh-Dole to force down the price of Xtandi, advocates have been hoping, the federal government would establish its ability to force down the price of other costly drugs ― or at least to threaten such action, prodding drugmakers to lower prices on their own.
But the Biden administration declined take up that opportunity. The petition had gone to the National Institutes of Health, which in a letter it released Tuesday said it “does not believe the use of march-in authority would be an effective means for lowering the price of the drug.”
A Rejection, But Also A Promise To Study The Idea
NIH has rejected march-in applications before, during both the Obama and Trump administrations. Francis Collins, the former NIH director who has advised the Biden administration on science policy, has testified previously he does not believe Bayh-Dole allows the federal government to license production simply because a drug is expensive.
But what Bayh-Dole does or doesn’t allow remains the subject of intense dispute, both inside the government and out. And in a joint news release noting that decision, Health and Human Services Secretary Xavier Becerra and Commerce Secretary Gina Raimondo announced that an existing working group with representatives of several agencies would study the question in depth.
“The Biden-Harris Administration is committed to increasing access to health care and lowering costs,” Becerra said. “And march-in authority is a powerful tool designed to ensure that the benefits of the American taxpayer’s investment in research and development are reasonably accessible to the public.”
Those assurances didn’t sit well with prominent progressive lawmakers, such as Rep. Lloyd Doggett (D-Texas), who have been pushing to use march-in authority as a way to fight high drug prices.
“Three administrations have now ignored the urgent plea of prostate cancer patients seeking some relief from Big Pharma price gouging on Xtandi,” Doggett told HuffPost. “The indifference shown to this outrageous abuse will likely be reflected in the working group tasked with placing limits on their own existing statutory authority to protect both taxpayers and American patients from monopoly prices. There is no lack of clarity, no need for a working group; all that is required is for this Administration to have the will to protect Americans instead of Big Pharma.”
“Three administrations have now ignored the urgent plea of prostate cancer patients seeking some relief”
James Love, director of Knowledge Ecology International and brother of one of the patients who filed the petition, called the response “appalling and insulting.”
Administration officials said the decision to reject the petition came from NIH, which operates as an independent agency. They also pointed to the working group ― and the fact that they have left the door open to future use of march-in authority ― as proof that they are willing to have a conversation the drug industry desperately wants to avoid about how best to use government leverage to bring down prices
“We think there’s space to engage here, which is not to say that there might not be trade-offs that we won’t like, but we don’t buy the argument that it is irresponsible to even talk about this because of weak-kneed investors in the pharmaceutical industry,” said a senior administration official, who requested anonymity to speak candidly. “It reflects that we are taking the idea seriously and beginning to grapple with it in a way that is not where the federal government has historically been.”
It’s not clear how long the working group will deliberate or how seriously it will grapple with underlying, substantively complex issues ― among them, whether exercising Bayh-Dole would discourage future investment in the drug industry by reducing the potential for profits.
Opponents of federal intervention have warned about this possibility, saying it would lead to less innovation and fewer cures. Supporters have said those arguments are overblown or simply wrong.
Anger From Progressives But Also Some Perspective
These same arguments hung over the debate over the prescription drug reforms of the Inflation Reduction Act, which will penalize drugmakers for big yearly price increases and give the federal government negotiating power over some of the most expensive drugs that Medicare buys.
Biden, who signed the Inflation Reduction Act into law last year, was a strong supporter of those reforms ― a point administration officials emphasized in response to criticism of Tuesday’s announcement.
“As we have made clear from day one, the Biden-Harris Administration is committed to lowering health care costs and expanding access to care for all Americans,” said Kamara Jones, a spokesperson for the Department of Health and Human Services. “We are pursuing a whole-of-government approach informed by stakeholders and the public to update a framework for when and how this authority should be used.”
That record is one reason longtime champions of march-in rights, such as Alex Lawson, tempered, or at least modulated, their criticism of the announcement on Xtandi.
Lawson, the executive director of the progressive group Social Security Works, told HuffPost he was “incredibly angry” at the decision, which he ascribed to “cowardice.” At the same time, he said the simple fact the administration will talk about the issue amounts to progress, and he rejected the notion that Biden was backing down from battling the drug companies.
“We didn’t accelerate as much as I would have liked,” Lawson said. “There has not been a change in trajectory. The Biden administration continues to see lowering drug prices as a core part of what [the administration] delivers to the American people.”
Still, some progressives are worried the continued work will amount to very little. One fretted about the possibility of a Republican administration picking up the baton in 2024 and killing the idea off entirely, as the Trump administration tried to do. Others wondered about the role Raimondo could play. While Becerra was a supporter of march-in rights when he was in Congress, the more moderate Raimondo has less of a track record on the issue.
The pharmaceutical industry, for its part, celebrated the administration’s decision as a clear win, noting it tracked NIH’s previous rulings.
“Hopefully, this puts the nail in the coffin of this canard,” Joseph Allen, the executive director of the Bayh-Dole Coalition, said in a prepared statement. “NIH deserves a lot of credit for standing up to incredible political pressure to misuse the law. Granting this petition would have upended the research, development, and commercialization system that supports millions of U.S. jobs and makes America the world’s most innovative nation.”
The patients who filed the petition with NIH officially appealed this week’s decision on Thursday.
Meanwhile, with this latest ruling in hand, the Japanese drugmaker Astellas can continue to sell Xtandi for five times as much in the United States as it does in Canada.
Sen. Bernie Sanders (I-Vt.), who chairs the Senate Committee on Health, Education, Labor and Pensions, said in a statement he would “take on the greed of the pharmaceutical industry and make sure that drugs that are developed with U.S. taxpayer money are sold here at a reasonable price.”
“How many prostate cancer patients will die because they cannot afford this unacceptable price?” Sanders asked.