[ed. Previously: Coronavirus Treatment Developed by Gilead Sciences Granted "Rare Disease" Status, Potentially Limiting Affordability (The Intercept/Duck Soup).]
Gilead Sciences on Wednesday announced that it has submitted a request to the Food and Drug Administration to rescind the exclusive marketing rights it had secured for remdesivir, an antiviral drug that shows promise in treating Covid-19, the disease caused by the new coronavirus. As The Intercept reported on Monday, the FDA had awarded Gilead seven years of exclusive marketing rights to the drug through the Orphan Drug Act, even though the statute was designed to induce pharmaceutical companies to make treatments for rare diseases that affect fewer than 200,000 people in the United States.
Although the new coronavirus will almost certainly infect that many people, Gilead had exploited a loophole that grants orphan drug status if a company files for it before the official number of cases hits 200,000. As of Wednesday afternoon, there were more than 438,000 confirmed cases worldwide, with more than 59,000 in the United States.
After a public outcry, Gilead issued a press release stating:
The law, known as Section 1498, gives the government the right to override a patent at any time as long as the company receives “reasonable compensation.” Essentially functioning as a kind of eminent domain for patented products, the provision breaks the monopoly and permits low-cost competition. And if drugs such as Gilead’s antiviral remdesivir and other potential treatments and vaccines for the coronavirus are priced out of reach, it could give the government critical leverage to negotiate lower prices. Through the Defense Production Act, the government could even start producing lifesaving treatments itself.
“The government should use every tool that it has to make sure that any coronavirus treatment or vaccine is affordable, including taking away monopolies through 1498,” said Zain Rizvi, a drug-pricing expert at Public Citizen. (...)
The federal government regularly used Section 1498 in the 1960s and 1970s to purchase generic drugs when the patented versions were far more expensive. But pharmaceutical companies railed against the provision and while it has been used for other inventions it has rarely been used for drugs since. In 2001, during the anthrax scare, just the threat of using 1498 proved effective when the government was trying to secure access to the antibiotic ciprofloxacin, which could be used to treat people who were exposed to anthrax. After then-Secretary of Health and Human Services Tommy Thompson raised the possibility of using the provision, Bayer cut the price of ciprofloxacin in half.
In 2017, a group of academics at Yale Law School made the case for the government’s use of Section 1498 to procure a lifesaving treatment for hepatitis C called Sofosbuvir, also manufactured by Gilead, which is too expensive for many people who need it. Sofosbuvir costs $48,000 for a 24-week course, or about $1,000 a pill. Because of the exorbitant price, insurers have refused to cover it for all of the roughly 5 million people infected with hepatitis C, instead making the drug available to only the sickest patients.
Gilead Sciences on Wednesday announced that it has submitted a request to the Food and Drug Administration to rescind the exclusive marketing rights it had secured for remdesivir, an antiviral drug that shows promise in treating Covid-19, the disease caused by the new coronavirus. As The Intercept reported on Monday, the FDA had awarded Gilead seven years of exclusive marketing rights to the drug through the Orphan Drug Act, even though the statute was designed to induce pharmaceutical companies to make treatments for rare diseases that affect fewer than 200,000 people in the United States.Although the new coronavirus will almost certainly infect that many people, Gilead had exploited a loophole that grants orphan drug status if a company files for it before the official number of cases hits 200,000. As of Wednesday afternoon, there were more than 438,000 confirmed cases worldwide, with more than 59,000 in the United States.
After a public outcry, Gilead issued a press release stating:
Gilead has submitted a request to the U.S. Food and Drug Administration to rescind the orphan drug designation it was granted for the investigational antiviral remdesivir for the treatment of Covid-19 and is waiving all benefits that accompany the designation. Gilead is confident that it can maintain an expedited timeline in seeking regulatory review of remdesivir, without the orphan drug designation. Recent engagement with regulatory agencies has demonstrated that submissions and review relating to remdesivir for the treatment of Covid-19 are being expedited.Still, public health experts remain concerned about the potential for Gilead and other pharmaceutical companies to engage in price gouging during the global pandemic. And while pharmaceutical companies are testing dozens of drugs as potential vaccines and treatments for the new coronavirus, some legal scholars have pointed to an obscure statute to help ensure that companies won’t price critical drugs out of reach.
The law, known as Section 1498, gives the government the right to override a patent at any time as long as the company receives “reasonable compensation.” Essentially functioning as a kind of eminent domain for patented products, the provision breaks the monopoly and permits low-cost competition. And if drugs such as Gilead’s antiviral remdesivir and other potential treatments and vaccines for the coronavirus are priced out of reach, it could give the government critical leverage to negotiate lower prices. Through the Defense Production Act, the government could even start producing lifesaving treatments itself.
“The government should use every tool that it has to make sure that any coronavirus treatment or vaccine is affordable, including taking away monopolies through 1498,” said Zain Rizvi, a drug-pricing expert at Public Citizen. (...)
The federal government regularly used Section 1498 in the 1960s and 1970s to purchase generic drugs when the patented versions were far more expensive. But pharmaceutical companies railed against the provision and while it has been used for other inventions it has rarely been used for drugs since. In 2001, during the anthrax scare, just the threat of using 1498 proved effective when the government was trying to secure access to the antibiotic ciprofloxacin, which could be used to treat people who were exposed to anthrax. After then-Secretary of Health and Human Services Tommy Thompson raised the possibility of using the provision, Bayer cut the price of ciprofloxacin in half.
In 2017, a group of academics at Yale Law School made the case for the government’s use of Section 1498 to procure a lifesaving treatment for hepatitis C called Sofosbuvir, also manufactured by Gilead, which is too expensive for many people who need it. Sofosbuvir costs $48,000 for a 24-week course, or about $1,000 a pill. Because of the exorbitant price, insurers have refused to cover it for all of the roughly 5 million people infected with hepatitis C, instead making the drug available to only the sickest patients.
by Sharon Lerner, The Intercept | Read more:
Image: David Paul Morris/Bloomberg/Getty
[ed. Amazing what some bad PR and public pressure can accomplish during a crisis. And what obscure information comes to light. Like Section 1498. That's some pretty heavy leverage. Also, just in (Friday 3/27): after endless dithering the President has finally been convinced to use the Defense Production Act to speed up production of ventilators. Why so long? Perhaps because of this. Or this. Or, maybe it's just because he likes haggling.]
