Updates:
- Senator Sanders Sends Letter to HHS Inspector General Urging Investigation of Exclusive Patent License for NIH-funded Cancer Therapy, Press Release. October 23, 2023.
- David Dayen, “Sanders Seeks Investigation of NIH Licensing Practices: The senator wants the inspector general to probe why the NIH licensed a potentially lucrative cancer drug to an obscure company linked to a former employee.” The American Prospect, October 23, 2023
- Erin Schumaker, “Bernie Sanders calls for probe of monopoly NIH cancer drug patent: The request comes two days before the committee he chairs will vote on a new NIH director.” Politico Pro. October 23, 2023
- Jessica Corbett, “Sanders Demands Probe of Push to Give Company Patent for Public-Funded Cancer Treatment: The Senate HELP Committee chair noted that “the apparent abuse of the system… is so egregious that it has been characterized as a ‘how-to-become-a-billionaire program run by the NIH.'”” Common Dreams, Oct 23, 2023.
- Lia DeGroot, “Sanders goes after NIH for granting exclusive patent for potential cancer therapy,”EndPoints News, October 24, 2023.
- Cory Doctorow, “Uncle Sam paid to develop a cancer drug and now one guy will get to charge whatever he wants for it: Making billionaires, one patent at a time.” Medium. October 19, 2023.
- Mari Serebrov, “Sanders decries NIH’s ‘become-a-billionaire program’” BioWorld, Oct. 24, 2023
- Steve Usdin, “Sanders questions NIH licensing practices: Investigation could open debate about IP licensing,” BioCentury, October 25, 2023.
Attached is the KEI comment to the NIH of a proposed worldwide exclusive license on a portfolio of patents on a treatment for HPV positive cancers. The license involves a mysterious company, Scarlet TCR Inc. which has no web page, and employs a recent NIH employee. The NIH notice is published in the Federal Register, at 88 FR 65179.
The license covers the commercialization of autologous T cell therapy products that are genetically engineered to have stable expression of a T cell receptor (TCR) targeting human papillomavirus (“HPV”)–16 E7 for the treatment of HPV-associated cancers and premalignant conditions in humans.
The licensed technology is currently in Phase I and Phase II human subject clinical trials, funded and sponsored by the NIH. The NIH is the current manufacturer of the treatment. If the NIH would register the treatment with the FDA itself and license the technology to companies on a non-exclusive basis, the cost of treatment would be far more affordable and accessible.
Below is the introduction to the KEI comment.
Opposition to the exclusive license
KEI Opposes the grant of an exclusive license to Scarlet on the grounds that the scope of exclusive rights is excessive and that the NIH should register the treatment with the FDA and provide non-exclusive licensing of the intellectual property rights in order to ensure that the technology is available and affordable.
The recent change in federal licensing regulations that eliminated the right of the public to obtain an administrative appeal of a licensing decision has created a situation where the public, based on little time or information, has one brief opportunity to challenge the creation of a legal monopoly on what is now a public asset.
The restrictions on the use of exclusive licensing of patented inventions in 35 USC 209(a) are designed to prevent cases like this, where an exclusive right in federally owned inventions is not a necessary incentive.
When the development of a product is already advanced, as is the case here, there is no basis to conclude that a worldwide, life-of-patent exclusive license is a “reasonable and necessary incentive to call forth the investment capital and expenditures needed to bring the invention to practical application.” 35 USC 209(a)(1).
The public has well known concerns over the high costs of cancer treatments, and there is ample evidence that companies are charging extremely high prices for cell and gene therapies developed on federal grants.
The plethora of public statements of elected officials stating they want to do something about those costs is a stark contrast to this proposal by the NIH, to create an unneeded monopoly on an NIH developed and government owned cancer treatment.
As proposed, the license is a mechanism to privatize extensive public funding of both preclinical and clinical research to Scarlet, a company associated with the former NIH employee who led the NIH funded research effort.
Scarlet TCR is a small, mysterious entity without a web page that was registered in Delaware as a corporation February 17, 2023. Whoever owns that small company is basically positioning itself to resell the government’s patents, first to venture capitalists, and then to a larger company that actually has the means and resources to commercialize the technology.
The NIH has invented the treatment, manufactures the treatment itself, and funded and sponsored Phase I and Phase 2 clinical trials that will involve an estimated 180 patients.
As documented below, the FDA initial approval of similar cell therapies have generally relied on one or two trials with smaller enrollments than the trials the NIH is currently funding. Of the six cell therapies described below, five relied on smaller trials for approval.
All six cell therapies also qualified for Orphan Drug tax credits and Orphan Drug regulatory exclusivities, a type of protection from competition that exists without an exclusive patent license.
There is no case to argue that the NIH needs to grant worldwide life-of-patent exclusive licenses to get this treatment onto the market.
If the ongoing Phase II trial results are as good as the already concluded Phase I trial, the NIH can make its own application to the FDA for marketing approval. The NIH can subsequently license the technology to multiple private sector manufacturers on non exclusive licenses, saving US residents, including federal programs that provide health coverage, from paying a monopoly price on a government funded technology.
This is not a license for a pre-clinical technology. Scarlet TCR is a secretive start up company associated with a scientist who was recently employed by the NIH to work on the technology. While making former NCI employees extremely wealthy, even billionaires, may seem like a good cause at the NIH, it imposes huge fiscal costs on the rest of us.
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Read the rest of the submission from the attached PDF file.