Alfred Engelberg and Aaron Kesselheim in Nature on Bayh-Dole royalty free rights in patents, Xtandi case

Alfred Engelberg and Aaron Kesselheim have published an opinion article in Nature titled:

“Use the Bayh-Dole Act to lower drug prices for government healthcare programs,” Nature Medicine 22, 576 (2016) doi:10.1038/nm0616-576, Published online 07 June 2016.

In the article, the authors discuss the opportunities to use the federal government’s royalty free rights in federally funded inventions for pharmaceutical drugs, using the Xtandi petition as an illustration. One section of the paper says the federal governments 35 USC 202 rights allow a generic drug manufacturer to overcome an important barrier to supply a generic drug, the patent certification requirements of the Hatch-Waxman Act. Engelberg played a key role in shaping the Hatch-Waxman patent certification requirements, and in the past also represented the federal government in disputes involving patents and procurement.

From the article in Nature:

A potential obstacle to the exercise of the government’s Section 202 license is the patent certification requirements of the Hatch- Waxman Act of 1984. Hatch-Waxman requires a manufacturer that is seeking approval to sell a generic copy of a patented new drug like enzalutamide to certify that any patents on the new drug are invalid or will not be infringed. This requirement may seem to prevent a generic manufacturer that has no basis for substantively challenging enzalutamide’s patents from obtaining FDA approval before the patents expire. But because of the government’s Section 202 license, we believe that a generic manufacturer could certify that the patents will not be infringed because approval is being sought for the sole purpose producing enzalutamide for sale to the government.

Any suit claiming infringement of the enzalutamide patents despite such a certification should be dismissed by a federal court, because law /fn3/ prohibits the court from interfering with the right of a government supplier to bid on or participate in the sale of products to the government, irrespective of the existence of patents. /fn4/ The only available course of action for acts of patent infringement by or for the government is to initiate a suit in the US Court of Federal Claims—but the Section 202 license would provide the government with a complete defense.

fn3/ 28 USC 1498(a)
fn4/ Gore v. Garlock, 842 F.2d 1275, 1282 (Fed. Cir. 1988).

Note. In the discussion of the Xtandi case, the authors reference the U.S FSS price for Xtandi of 42.38 for a 40 milligram tab (4 per day is the common dose). In the KEI petition, we have focused on the prices faced by persons in the private sector (AWP is $88.48 per 40mg tab), or Medicare ($69.41 in 2014, $73.66 on an AARP plan recently).