Six Senators Call on Army to Hold Public Hearing on Proposed Exclusive License of Zika Vaccine to Sanofi

Today, six Senators, including Sen. Durbin (D-IL), Sen. Sanders (I-VT), Sen. Markey (D-MA), Sen. Brown (D-OH), Sen. Blumenthal (D-CT), and Sen. Angus King (I-ME), sent a letter to Acting Secretary of the Army Robert Speer requesting a public hearing on the proposed exclusive license of a federally-funded Zika vaccine to the French multinational, Sanofi, and saying that “it is imperative that any forthcoming vaccine is accessible and affordable for all, especially given the significant taxpayer investment to date.”

The letter details the extensive federal funding that has gone into the research and development of the vaccine, and the concerns that remain regarding an exclusive license that would, “provide the company with monopoly rights through 2036, without any parameters to ensure reasonable pricing of the eventual product.”

Noting that the public deserves answers to the many questions that remain, the letter requests a public hearing and suggests topics for discussion that would include:

  • The role that federal funding has played, and will continue to play, in the research and development of the Zika vaccine, and the extent of financial investment by Sanofi;
  • Why an exclusive license is preferable to a non-exclusive license in this case, how the Army makes determinations under 35 U.S.C. 209(a) of the Bayh-Dole Act when deciding to proceed with an exclusive license, and relevant lessons from the NIH’s technology transfer experience;
  • Issues regarding the pricing, affordability, and government purchasing of the resulting vaccine;
  • An assessment of interest among pharmaceutical companies in partnering on a Zika vaccine; and
  • Issues regarding the timing of the proposed license.

The same group of Senators additionally sent a separate letter to Sanofi CEO Oliver Brandicourt that states that the Senators “will continue to urge the Army not to finalize any contracts with your company” until the company agrees to a reasonable and affordable price for the finished product. The letter highlights the role of federal funding in this vaccine, the “billions of dollars” that Sanofi’s vaccines earn via purchase by U.S. government payers, the “fairly common practice” of non-exclusive licensing (noting that 95% of NIH agreements with industry are non-exclusive), and more, concluding that, “Given all this, it is incomprehensible that Sanofi would still seek a monopolistic license from the Army without including a commitment to set an affordable price for this product.”

The Senators go on to say that their concern regarding the “opportunity for future predatory pricing abuse by Sanofi is reinforced by recent lawsuits against your company for insulin pricing practices, as well as Sanofi’s recent $20 million settlement with the Department of Justice for over-charging the Department of Veterans Affairs.”

The letter additionally requests that Sanofi publicly disclose (1) its spending on R&D into the Zika vaccine broken down by year, and (2) The amount of funding Sanofi has received from the U.S. government and U.S. government payers for all research, purchase agreements, and reimbursements for Sanofi’s licensed drugs in the last five years.

Statement of James Love, KEI Director:

“The letter from the six Senators asks the Army to hold a hearing, so that the Army licensing officials and Sanofi can present the case of an exclusive license without any conditions on pricing, and critics of the license can argue the other side. A hearing will provide the public with the opportunity to better understand how their tax dollars are being used, the choices available to the Army, and the likely consequences of giving this French drug company a monopoly.”

Statement of Andrew S. Goldman, KEI Counsel, Policy & Legal Affairs:

“The Senators point out in their letter to Sanofi that a nonbinding agreement on price increases does not address the issue of what the price will be.”

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