In the summer of 2020, then-California Attorney General Xavier Becerra demanded the Trump administration use existing law to lower the price of medicines that were originally developed at taxpayer expense.
“We cannot afford to leave the supply of this critical medication to chance and the whims of the marketplace when it was funded in part by taxpayer dollars,” Becerra wrote in a letter to the Trump administration in response to the high price of Remdesivir, which treats COVID-19.
Less than three years later, the agency run by Becerra — now Health and Human Services (HHS) Secretary in the Biden administration — just rejected the same demand from two cancer patients unable to afford the $180,000-a-year price of a medicine whose development was originally funded by the public.
Current law allows regulators to rescind exclusive patent protections for government-developed drugs when “action is necessary to alleviate health or safety needs” or when a medicine is not “available to the public on reasonable terms.”
However in rejecting that move for the prostate drug Xtandi, the National Institutes of Health — which is part of HHS — declared that the purpose of existing law is designed “to promote the commercialization and public availability of government-funded inventions,” with a primary purpose “to allow government funding recipients to own patent rights.”
Becerra’s department sided with pharmaceutical companies Pfizer and Astellas, despite Astellas selling the prostate cancer medicine in other countries at a fraction of its price in the United States.
The patent holders of Xtandi — whose ingredients were developed at a California public university — have earned more than $20 billion from the drug, according to the American Prospect.
Biden’s Record On Drug Prices
Becerra’s decision may be a dramatic about-face, but it is consistent for his boss, President Joe Biden.
Biden was vice president when the Obama administration rejected congressional Democrats’ demand that the government use the same power to lower the skyrocketing prices of medicine in America.
As a senator in 2000, Biden was one of just eight Democrats who helped pharmaceutical lobbyists kill a measure spearheaded by Sen. Paul Wellstone (D-Minn.) and then-Rep. Bernie Sanders (Ind.-Vt.) that would have reinstated the Reagan-era requirement that drug companies sell medicines developed with public money at a reasonable price.
That requirement was repealed by the Clinton administration in 1995, following pressure by drugmakers.
“Understandably, members of the public are concerned that the prices they pay are higher than those in other high-income countries,” the Biden administration wrote in a letter to cancer patients on Tuesday, adding that officials share “your concern about the high price of drugs and the burden it places on patients and their families, particularly the uninsured and the underinsured.”
However, the administration insisted that it was rejecting the petition to use so-called “march-in rights” to seize the patents on Xtandi because the prostate cancer drug is “widely available to the public on the market.”
The administration did not respond to The Lever’s request for comment.
Americans Fund Pharma R&D, Get Rewarded With World’s Highest Prices
Studies have shown that most, if not all, major new drugs are originally developed with funding from the U.S. government. But at the urging of pharmaceutical lobbyists — and as nearly a quarter billion dollars of pharmaceutical industry campaign cash flowed to both parties — federal officials have refused to use their existing power to reduce the U.S. prices of those drugs.
The result: The American public is financing pharmaceutical research and development, and then being rewarded for that investment with the world’s highest prices for medicine, all while drugmakers report ever-higher profit margins.
Prior to joining the Biden administration, Becerra had criticized this situation, expressing support for using executive authority to crack down on high drug prices.
As a member of Congress in 2016, Becerra signed on to a letter to the Obama Department of Health and Human Services calling on officials to broadly use “march-in rights” to lower the cost of prescription drugs — including “specialty drugs, like those to treat cancer, which are frequently developed with taxpayer funds.”
Under the Bayh-Dole Act, passed four decades ago, the federal government can waive patent exclusivity for drugs whose research was funded by federal government dollars, speeding the arrival of far-cheaper generics to the market.
In this case, the patent on Xtandi is held by pharma giant Astellas, which in turn shares the U.S. market with Pfizer. Xtandi has proven to be effective in treating prostate cancer, and is on the World Health Organization’s List of Essential Medicines.
And yet, despite march-in rights enshrined in the Bayh-Dole Act, federal officials have never exercised those rights, even as drug prices have skyrocketed.
Big Pharma’s Big Lobbying Campaign
A furious lobbying campaign led up to Becerra’s reversal on the question of march-in rights.
The U.S. Chamber of Commerce, which spent more than $80 million lobbying in 2022, explicitly stated in public reports that it was lobbying on a “petition to HHS to grant march-in rights for the patents on the drug Xtandi.”
The Chamber’s board of directors includes a top lobbyist from Pfizer, which has disclosed lobbying the White House on “Bayh-Dole March-In Rights.” Astellas has also lobbied on “issues related to march-in rights under the Bayh-Dole Act.”
The powerful drug lobby Pharmaceutical Research and Manufacturers of America, known as PhRMA, similarly reported lobbying on “Bayh-Dole march-in rights policy issues.”
Pfizer spent $15 million on lobbying in 2022, while PhRMA spent $29 million. Astellas spent $2 million on lobbying.
Texas Rep. Lloyd Doggett, the top Democrat on the Ways and Means Committee’s Health Subcommittee, panned the administration’s decision in a statement Tuesday.
“Today’s decision is a blow to prostate cancer patients, their families, and taxpayers,” said Doggett, adding: “The Biden Administration has missed yet another opportunity to do something meaningful to lower prescription drug costs and protect taxpayer investments. Its decision protects monopolists over taxpayers and patients, despite clear statutory authority and reasonableness to intervene.”
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