On Monday, March 18, 2013, the National Institutes of Health (NIH), held a conference call with the four NGOs that filed an October 25, 2012 march-in request for the patents held by Abbott Laboratories/AbbVie relevant to the manufacture and sale of ritonavir, a federally funded invention that is much more expensive in the United States than in Canada, Europe or other high-income countries, and is only available as a co-formulated product with AbbVie’s version of lopinavir. A copy of the October 25, 2012 petition is available at /node/1573.
The four civil society organizations involved in the petition are the American Medical Students Association (AMSA) , Knowledge Ecology International (KEI), U.S. Public Interest Research Group (U.S. PIRG), and the Universities Allied for Essential Medicines (UAEM). Earlier the NIH said they expected a decision by December 2012; however it seems the NIH has expanded its review of the petition. On Friday the NIH provided five questions that wanted to discuss, and they raised additional questions during the call.
The two proposed policy rules
The petition focuses on two abuses, (1) the fact that ritonavir is priced much higher in the United States than in other high income countries, and (2) AbbVie’s refusal to license the ritonavir patents for use in other co-formulated antiretroviral fixed dose combination drugs. To remedy these abuses, the petitioners ask the NIH to adopt two general policy rules regarding the commercialization of federally funded inventions and, specifically, to apply those rules in the case of patents on AbbVie’s drug, ritonavir (brand name Norvir), and also to other NIH funded drugs. The petition provided information on 12 other NIH funded drugs that were more expensive in the United State than in other high income countries.
These two proposed policy rules read as follows:
Rule 1: Ceiling on prices to U.S. residents
The Secretary shall normally grant open licenses to third parties to use patented inventions that have benefitted from federal funding, subject to the payment of a reasonable royalty and an appropriate field of use, if a product or products based upon those inventions are sold in the United States at prices higher than in other high income countries.
In implementing this rule, we suggest the following standard for a ceiling on prices to U.S. residents:
The Government should consider the high, mean and median prices charged in the ten largest foreign economies, as measured by GNP, among the countries determined by the World Bank to be high income. U.S. prices will presumptively not be considered reasonable, and contracts will be given or licenses granted to competitors to supply the products to U.S. consumers, if any of the following are true for either public or private sector prices:
(1) U.S. prices are higher than seven of the comparison countries, or
(2) U.S. prices are 10 percent higher than the median price of the reference countries.
A licensee may rebut the presumption of unreasonable pricing by providing evidence that its actual risk adjusted R&D costs would not be recovered, but for the charging of higher prices in the U.S. market, or other evidence specific to the risk adjusted osts for the licensed invention.
Rule 2: Use of invention for a dependent technology
The Secretary shall grant licenses to third parties to use patented inventions that have benefited from federal funding, subject to the payment of a reasonable royalty and an appropriate field of use, if a product based on those patented inventions:
(a) is a drug, drug formulation, delivery mechanism, medical device, diagnostic or similar invention, and
(b) is used or is potentially useful to prevent, treat or diagnose medical conditions or diseases involving humans, and
(c) its co-formulation, co-administration or concomitant use with a second product is necessary to effect significant health benefits from the second product, and
(d) the patent holder has refused a reasonable offer for a license
The five NIH questions
The NIH began the call by noting that they had read our request for march-in and had done considerable work in evaluating our request and researching relevant information. We then focused on the five questions the NIH had sent last Friday.
- Are you aware of any supply availability issues with respect to ritonavir, alone or as part of a combination drug that were not included in your march-in request?
- Are you aware of any patents not identified in your march-in request that are necessary for the production, formulation and administration of ritonavir? In particular, the FDA Orange Book lists a number of patents for Norvir in addition to the ones in your request. If yes, please provide supporting information.
- Apart from the asserted status of the identified patents as inventions made with US Government funding (“subject inventions”), please explain your rationale for each patent’s inclusion in your request, i.e., how would the patented technology be used to produce ritonavir for sale and use.
- In your march-in request you assert that march-in action by NIH is necessary under the implementing regulations and requirements of the Americans with Disabilities Act (ADA) and the Patient Protection and Affordable Care Act (PPACA). Please identify the specific implementing regulations and requirements for the ADA and PPACA that are directed to ritonavir.
- Was the differentiation in ritonavir pricing that was provided in the march-in request for ritonavir by itself or for ritonavir in combination with other drugs?
In addition to the five written questions, the NIH asked others during the call, including a request for more information about the difference between the U.S. and other high-income country health care systems, as it relates to the proposed rule. These are some notes.
Question 1. In the discussion about the supply, we mentioned that there are several generic manufacturers that have already received tentative FDA approval for ritionavir under the PEPFAR program. According to the FDA’s list, four firms (Hetro Labs, Mylan, Cipla and Aubindo Pharma) have received tentative FDA approval for ritionavir co-formulated with lopinavir or atazanavir.
Question 2. This was the longest discussion. There are FDA Orange Book patents subject to NIH March-In rights, and patents without march-in rights. The NIH was asking if the NIH funded patents are sufficient to make, distribute and sell the drug. We said the NIH funded patents were the most important patents, and the newer “evergreening” patents were of either (a) not necessary, or (b) subject to challenge, noting, for example, that the Public Patent Foundation claims to have prior art on all of the patents that were in the FDA Orange Book as of February 2010 for the heat stable tablet version (one new patent had only been filed in 2012). See the press release from PUBPAT/1/, and the petitioners spreadsheet on Orange Book patents. Laura Etherton from U.S. PIRG noted that a 2002 FTC Study, “Generic Drug Entry Prior to Patent Expiration,” reported that “Generic applicants have prevailed in 73 percent of the cases in which a court has resolved the patent dispute.”/2/
Question 3. We were asked to provide more information on why each of the patents in the March-In request are needed to make and sell ritonavir.
Question 4. This question concerned 35 USC 203(a)(3), which was one of the three grounds cited for granting the March-In request. The NIH wanted more justification that the “action is necessary to meet requirements for public use specified by Federal regulations” and why AbbVie did not “reasonably” satisfy those needs. We discussed the relationship between government regulations that require businesses or non-profit organizations provide certain health benefits to persons who are HIV+ and the costs of providing those benefits, but the NIH would like this argument developed further.
Question 5. We did not discuss question 5 in the call, but the abusive pricing of ritonavir cited in the petition concerns ritonavir sold as a stand alone product.
There was a discussion about the fabrazyme case, where even though the patent owner had failed to supply the market, the NIH declined to grant the March-In request in part because the NIH assumed new firms could not overcome the FDA test data protection requirements. Ironically, in the Fabrazyme case the US patent owner was induced to license an NIH funded patent in a compulsory licensing proceeding in Germany, ensuring that European consumers would benefit from competition between two suppliers, while the NIH refused to grant a compulsory license, leaving U.S. consumers with one supplier and rationed doses of medicine. There was a further discussion of the fabrazyme patent cases in the U.S. and Germany.
In the current case, the NIH was raising the possibility that it could reject the March-In on the grounds that AbbVie might prevail in using questionable patents to block generic products. We said that if the patent holders have engaged in abusive practices, the public should have the right to seek to remedy the abuse, and the NIH should not fail to act on the grounds that a second abusive practice or another regulation appears to create another barrier to competition. To illustrate, we mentioned the example of Executive Order 13588 of October 31, 2011 on “Reducing Prescription Drug Shortages” which was issued by the White House to address shortages of certain drugs, and was used to permit the importation of Lipodox, which contained the same active ingredient as Doxil, a cancer drug then facing supply problems./3,4/
In the case of ritonavir and other NIH funded drugs, the NIH should eliminate the expectation of exclusivity for the NIH funded patented inventions, when the inventions are part of a product is more expensive in the United States than in other high income countries, even if there is some ambiguity as to the ability of generic manufacturers to clear other Orange Book patents. We noted also that attempts to block generic entry with patents on doses, formulations and other minor and patents or questionable relevance or merit was not unusual, and could in fact be described as standard operating procedure, and such strategies were frequently defeated by generic competitors once the initial and stronger patents were no longer a barrier to entry.
The petitioners also emphasized the importance for setting a precedent on the pricing issue — noting that this would have a dramatic impact not only on ritionavir, but also any drug based upon NIH funded patented inventions, by setting out a clear standard for abusive pricing that the public and generic competitors could use to break a patent monopoly.
The NIH said that Abbott/AbbVie would be responding to the petition in the coming weeks. Our side will be providing additional information to the NIH on the petition. The NIH said that our request for a general rule is being evaluated, but the decision will come in the context of the facts in the ritionavir case.
1. KEY HIV/AIDS DRUG PATENTS CHALLENGED BY PUBPAT: New Prior Art Proves Eight Abbott Laboratories Patents on Ritonavir are Undeserved, August 10, 2010. http://www.pubpat.org/ritonavirfiled.htm
2. Generic Drug Entry. Prior to Patent Expiration: An FTC Study. Federal Trade Commission. July 2, 2002. http://www.ftc.gov/os/2002/07/genericdrugstudy.pdf
3. Executive Order 13588 of October 31, 2011 – Reducing Prescription Drug Shortages.
4. Toni Clarke, FDA approves generic version of cancer drug Doxil, Feb 4, 2013. http://www.reuters.com/article/2013/02/04/us-cancer-drug-approval-idUSBRE9130U320130204