Six organizations ask HHS Secretary Azar to take title of 5 patents on Exondys 51, as remedy to failure by inventors to disclose NIH funding


Six organizations are asking Department of Health and Human Services Secretary Alex Azar to take actions to lower the price of eteplirsen, a drug sold under the brand name Exondys 51, to treat Duchenne Muscular Dystrophy (DMD).

The letter focuses on five patents on the drug, and the failure of the inventors to disclose several NIH grants that funded the inventions. The letter explains that one of the possible remedies available to the federal government is to take title to the five patents, and to use the ownership of the patents as leverage to induce the manufacturer to lower the price.

The NIH grants were to researchers at the University of Western Australia, the University of Nebraska and Oregon State University, and funded research that was the basis of five patents then licensed or assigned to Sarepta Therapeutics, the company selling Exondys 51.

The Sarepta price for Exondys 51 is very high. One analysis estimated the annual cost to be an average of $750,000 per year, for the 12 patients in the clinical clinical trial cited by the FDA when the drug was approved in 2016. For some patients, the cost is even higher.

Under the terms of the law, known as the Bayh-Dole Act, there are obligations that come with the receipt of public funding for research. Among the obligations, the inventors must disclose the fact that government funding contributed to the invention, provide the government with a worldwide royalty free right license, make the benefits “available to the public on reasonable terms,” and manufacture products in the United States.

The five patents on Exondys 51 do not include the disclosure that the public invested in these inventions. One possible remedy for a failure to disclose is that the government takes title to the patents.

KEI, and the organizations Health GAP, Patients for Affordable Drugs, People of Faith for Access to Medicines, Social Security Works, and Universities Allied for Essential Medicines ask Secretary Azar to conduct an investigation, and if concluding the inventors failed to make the required disclosures, take title to these patents, and use the ownership of the patents as leverage to obtain lower prices.

The following are comments on the proposed action:

“The Exondys 51 case is one of several where inventors did not disclose federal funding.That failure to disclose is a regrettable lapse, but it also gives the government some leverage it would not otherwise have, if the government is willing to act. When an inventor does not disclose an NIH grant, the government can take title to the patent, then use the patent rights to obtain a lower price, in this case, as a condition for Sarepta using the patent. It’s messy, but feasible, and if the government wants to lower the price, this is something they can do, right now. If the government fails to take title to the patent, it is essentially endorsing the $750,000 per year price of the drug, and the predictable restrictions on access from such a high price.”
James Love, Knowledge Ecology International

“The Bayh-Dole Act has provisions to protect the public’s interest and investment in this product. It’s essential that the agencies charged with enforcing this law prioritize the rights of taxpayers and patients. Charging families such an exorbitant price for a drug they helped finance is adding insult to injury.”
Kim Treanor, Knowledge Ecology International

“By signing this letter, we aim to highlight steps the administration can currently take when drug corporations abuse patents that were funded by taxpayers. At a price of over $750,000 for a drug invented with taxpayer support, Exondys 51 merits action to protect patients, their families, and our health care system from price gouging.”
David Mitchell, Patients For Affordable Drugs

“Access to medicines is a moral imperative and a human right, especially when taxpayers and patients paid for the development of those medicines. People of faith and the American people overall look to the Trump administration to fulfill its many pledges to significantly lower drug prices. In this case and others like it, our leaders need to exercise their clear legal right to rein in outrageously high medicine pricing.”
Fran Quigley, People of Faith for Access to Medicines

“People should not be forced to pay several hundred thousand dollars per year for a drug invented with taxpayer money, and the researchers should not lie about the fact that government research grants funded the invention.”
Alex Lawson, Social Security Works

“UAEM believes the federal government must ensure access to NIH funded inventions, but for that to happen, inventors must first acknowledge their NIH funding. In this case, the inventors did not disclose their federal R&D grants, and placed an unconscionable price on the drug. For the price of Exondys 51 for one patient for one year ($750k), you could buy a 2018 Lamborghini Huracan ($199k), build a new 2000 square foot home ($284k), pay four years of full tuition and room and board at Harvard ($252k), AND buy a year’s supply of HIV drugs for 150 people in a low income country. This is publicly-funded medicine and it is shameful.”
Merith Basey, Universities Allied for Essential Medicines

“The consequences for drug companies brazenly and repeatedly ignoring their obligation to disclose federal research funding in relevant patent filings should have consequences.”
Brook Baker, Health GAP

News Reports

April 5, 2018. Ed Silverman. Trump administration is urged to override patents on pricey muscular dystrophy drug. Stat News.

April 5, 2018. Dani Kass. Nonprofits Urge HHS To Take Over Sarepta’s Exondys Patents. Law360.

April 6, 2018. Brittany Meiling, Should Sarepta’s patents be seized by the government? Patient advocates pitch controversial drug pricing proposal. End Points

April 6, 2018. Bill Meagher, Sarepta Hit With Call to Drop Duchenne Drug Costs: The biopharmaceutical company, which won controversial FDA approval for a Duchenne Muscular Dystrophy drug, now confronts patient groups asking HHS to take its patents and drop the price of that drug. The Street.