2018: Comments on Morphiex Biotherapeutics license

(Update: The NIH provided a response to our comments on July 16, 2018)

Below are comments sent by KEI, UACT and HealthGap, regarding a proposed exclusive license to Morphiex Biotherapeutics, an entity for which little is known. The license concerns “Use of the CD47 Phosphorodiamidate Morpholino Oligomers for the Treatment, Prevention, and Diagnosis of Hematological Cancers.”

(Comments on earlier NIH owned licenses are here: https://www.keionline.org/nih-licenses).

Earlier KEI asked the NIH three questions about Morphiex:

  1. Does it have a web page?
  2. Does it have any salaried employees?
  3. Are any of the people in the company former NIH employees?

Below are the full comments.

Jaime M. Greene
Senior Licensing and Patenting Manager
NCI Technology Transfer Center
Email: greenejaime@mail.nih.gov.

Date: May 30, 2018

Re: Prospective Grant of an Exclusive Patent License: Use of the CD47 Phosphorodiamidate Morpholino Oligomers for the Treatment, Prevention, and Diagnosis of Hematological Cancers. Notice for comment published in 83 FR 22501.

Dear Jaime Greene:

Knowledge Ecology International (KEI), HealthGap and the Union for Affordable Cancer Treatment (UACT are organizations concerned about drug pricing and access to patented medicines, offering comments on the grant of an exclusive license of the National Institutes of Health (NIH) patents noticed in 83 FR 22501, to Morphiex Biotherapeutics (“Morphiex”) located in Boston, MA. The above entities oppose the issuing of the license unless:

    • A. The NIH has determined that an exclusive license is “a reasonable and necessary incentive” to induce investments for the development and practical application of the invention, as is required by 35 USC § 209, and shares its analysis with the public; and

B. The NIH limits the scope of rights for the exclusivity to only those rights reasonably necessary to induce investments for the development and practical application of the invention, and in particular, that the field of use is sufficiently narrow, that the term of the exclusivity is sufficiently limited, and that the license contains sufficient safeguards to ensure that the invention is “available to the public on reasonable terms,” as is required by 35 USC § 209 and 35 USC § 201(f).

Morphiex Biotherapeutics does not appear to have a web page, and there is almost no information available about the company, other than a February 27, 2018 registration of the company in Delaware. As of May 23, 2018, the company Facebook page had only one entry, which was just a logo and no text. One imagines that such a company may also have few assets, yet the NIH is proposing an exclusive license of inventions that have a potential for the treatment, prevention, and diagnosis of hematological cancers.

Our comments address three areas of concern, (1) the pricing, affordability and access issues, (2) freedom for researchers to use the inventions, and (3) requirements for transparency of the development and commercialization of the medicine.

We propose the following safeguards regarding the pricing of and access to products that use the inventions:

  1. Products are priced no higher in the United States than the median price charged in the seven largest economies as measured by nominal GNI that have a nominal GNI per capita of at least 50 percent of the United States. To fully appreciate our concerns about the discriminatory pricing that makes US residents pay more than everyone else, please review the cross country price comparisons here: http://drugdatabase.info/drug-prices/
  2. Prices for products in the United States do not exceed the estimated value of the treatment, as determined by independent health technology assessments selected by Department of Health and Human Services (HHS).
  3. Patient co-payments under third party Medicare and private reimbursement programs are affordable.
  4. The geographic area for the exclusivity excludes countries with a per capita income less than 30 percent that of the United States, and, if there is no such exclusion, the company be required to report annually on the reasonable and feasible measures that will be taken to ensure access to patients living in such countries. Here, please note the data from http://drugdatabase.info/drug-prices/, which shows that in many developing countries, prices are frequently higher than the prices for high income countries in Europe, despite the much lower per capita income in developing countries (including for taxpayer funded cancer drugs), illustrating the need for a policy to be included in NIH licenses.
  5. The initial period of exclusivity is set at seven years, subject to extensions if the company can demonstrate it has not recovered sufficient profits given the risk-adjusted value of the clinical trials used to register similar drugs for the lead indication.
  6. Absent satisfaction of the requirements of proposed safeguard number 5, the exclusivity of the product be reduced when cumulative global revenues for the product exceed $1 billion, by one year for every $0.5 billion in cumulative sales that exceed $1 billion in cumulative sales.

Note that the licensing of inventions to the company significantly reduces the company’s costs of preclinical research, which various studies have estimated to be 40 to 55 percent of drug development costs on a risk- and capital cost-adjusted basis.

To address research by third parties on the patented invention, we propose the NIH explicitly permit researchers worldwide to use the inventions for research purposes, regardless of whether or not research has a grant or contract from a U.S. government agency, and for both profit or non-profit organizations.

To address transparency, we proposes the following requirements.

The company will be required to provide an annual report for the public providing disclosures of the following items:

  1. The amount of money R&D to obtain FDA and foreign government approvals of the inventions, including in particular, the amount of money spent each year on each trial, and the relevant tax credits, grants and other subsidies received from any government or charity relating to those R&D outlays,
  2. The prices and revenue for the products, by country,
  3. The number of units sold, in each country,
  4. The product-relevant patents obtained in each country, and
  5. The regulatory approval obtained in each country.