In 2010, people with a rare enzyme disorder called Fabry found supply of the only treatment rationed. Those taking Genzyme's drug Fabrazyme could only get a third of their normal dose, and new patients couldn't get any.
The reason? Viral contamination at the company's Allston, Mass. plant.
Patients on rationed doses suffering a resumption of symptoms like pain, high blood pressure and vision problems petitioned the federal government to invoke long-standing authority to "march in" to revoke Genzyme's patent and give it to another company that could meet demand. The National Institutes of Health declined, reasoning that in spite of Genzyme's clear mishandling of supply, it would take another drugmaker years of clinical work to catch up.
With the major Democratic 2020 candidates campaigning on lowering drug prices, march-in rights are now back in focus as a tool to achieve that goal. Biopharmas are setting too-high prices for drugs discovered with taxpayer support, the argument goes, which ought to spur the government to take possession of their patents to lower costs. The Trump administration also has shown some interest in pharma patents.
The calls are only growing thanks to "patent thickets," the expansive intellectual property estates that drugmakers use to shield drugs from generic competition well beyond the date of first patent expiration. For example, Abbvie holds more than 100 patents for its $20-billion-a-year injection Humira, which has allowed it to stretch its monopoly out to 2023.
The problem with appealing to march-in rights as a solution is the government has always refused to use the power it holds — as the Genzyme case illustrates.
"A lot of people saw the NIH's refusal to march in in that case and said they're not going to ever invoke those rights," said Rachel Sachs, an assistant law professor at Washington University in St. Louis, in an interview.
"That argument will always be true in the context of prescription drugs," she said of the government's explanation for its response to petitions concerning Fabrazyme. "If that's going to always be true, the NIH should just come out and say that, unless the company is actually going to go out of business and refuse to sell the drug at all, they will never invoke march-in rights."
Thirty-nine year old law
NIH's march-in powers are derived from the Government Patent Policy Act of 1980, commonly known as Bayh-Dole for its congressional sponsors. The aim was to speed the transfer of patented inventions like new drugs from government-funded research institutions to the private sector.
When the private sector licensor doesn't take steps to "alleviate health or safety needs" through the use of the patent in question, the government can take possession of the license and offer it to another company.
Patient advocates have long argued prohibitively high drug prices should trigger march-in authority — a case made in the past for the HIV drug Norvir, glaucoma treatment Xalatan and prostate cancer therapy Xtandi. The NIH's response in every case has been that the drug's price does not interfere with its availability.
Four of the six march-in petitions received by the NIH have been based on price.
The fact that NIH, a research agency, holds Bayh-Dole authority doesn't help, either, said Joshua Sharfstein, vice dean for public health practice and community engagement at Johns Hopkins University, in an interview.
"I think NIH is worried about creating cures. They're not worried about drug costs," said Sharfstein, who served as deputy commissioner of the Food and Drug Administration under President Barack Obama. "And then you have FDA, which certainly isn't either. They're doing their job of approving generics as a mechanism for reducing drug costs."
"There's not really an agency that's thinking about drug costs other than the payment agencies like the [Department of Veterans Affairs] or Medicare or Medicaid," he said. "There's no real central authority."
The Pharmaceutical Research and Manufacturers of America has long opposed use of march-in powers, although it may find itself increasingly ignored as lawmakers search for ways to restrain drug prices.
"Circumventing patent rights on medical innovation with march-in — which has never been used — threatens our country's ability to remain competitive," said PhRMA spokesman Tom Wilbur.
For its part, the NIH won't describe what circumstances, if any, would prompt it to apply march-in rights, saying in a statement that it relies on the facts presented by each petition.
A tight community
It doesn't help the patient advocates' case that the bill's two sponsors, former senators Birch Bayh and Robert Dole, explicitly stated in a Washington Post 2002 letter to the editor, "Bayh-Dole did not intend that government set prices on resulting products."
That claim, Sachs said, is undermined by the fact that Bayh-Dole predates the Hatch-Waxman act that set data exclusivity and patent term extensions for drugs. The law's sponsors, therefore, could not have foreseen the pricing power that branded drug manufacturers have today.
Past failures at getting the NIH involved isn't discouraging the activist group Knowledge Economy International, though. The organization, which has received funding from such foundations as the Open Society Foundation and Kaiser Foundation Health Plan and Hospitals, is now preparing a Bayh-Dole petition on Novartis' $2.1 million gene therapy Zolgensma, executive director James Love said in an interview.
In preparation, KEI wants lead investigator Jerry Mendell to disclose clinical trial costs accrued at Nationwide Children's Hospital. The organization also asked how much of the funding came from public sources like NIH and charities, as well as which patents Nationwide licensed to Avexis, the company that Novartis bought to access Zolgensma.
Nationwide said in a statement the NIH was one of multiple sources of funding for preclinical study of Zolgensma, and the federal agency did not fund human clinical trials.
Love claims one reason the NIH doesn't enforce Bayh-Dole march-in rights is because of relationships between NIH, academics and industry that enable discovering researchers and their intellectual property to move into startup biotechs.
"The tech transfer community is a pretty tight community. These are their colleagues. Their colleagues are doing well," he said.
In spite of the NIH's reluctance to act in the past, Love said he is optimistic more pressure can soon be brought to bear on the pharma sector. That is because so many of the new cell and gene therapies — such as the cell therapies Kymriah and Yescarta as well as the gene therapies Zolgensma and Luxturna — benefited from NIH grants in their early-stage research.
As it happens, such therapies are among the most expensive brought to market, with Zolgensma's price setting a per-treatment record.
"We would love to change the statute but I wouldn't sit around saying we can't do anything," he said. "You can do things now without changing the statute."
Lawmakers have, however, introduced bills that would expand the federal government's authority over NIH-supported patents.
Maryland Democratic Senator Chris Van Hollen's We Protect American Investment in Drugs (WE PAID) Act would appoint a commission to evaluate reasonable prices for drugs that have received federal funding in development.
Rep. Lloyd Doggett, D-Texas, has proposed that Bayh-Dole march-in rights be exercised against any company that refuses to negotiate with Medicare on the price of drugs.
March-in rights, meanwhile, have been proposed as a drug price-control tool by Democratic presidential candidates like Pete Buttigieg, Bernie Sanders and Elizabeth Warren.
"If I am elected president, I'm going to cut prescription drug costs in this country by 50% so that we are not paying any more than other major countries are paying," said Sanders in an interview on Face the Nation in March. "If [pharmaceutical companies] don't like that then we'll take a look at their patents."
More recently, President Donald Trump's Health and Human Services department last month sued Gilead for infringing on patents granted to the Centers for Disease Control and Prevention for research on pre-exposure prophylaxis HIV treatment.
While the suit does not refer to Bayh-Dole authorities, the fact a Republican administration is going after a pharmaceutical company's intellectual property is suggestive of the changing political winds around drug patents.
Bayh-Dole march-in rights apply only to drugs developed with help from federal programs.
A second law, referred to as section 1498 of the U.S. code and pre-dating Bayh-Dole by 70 years, is a type of "eminent domain" statute for intellectual property. It has previously been used by the Defense Department to secure lead-free bullets and night-vision goggles that violated U.S. patents. When the federal government invokes 1498 authority, it must compensate the patent owner.
In the pharmaceutical world, the authority has been threatened twice, but ultimately was not invoked because drug manufacturers agreed to cut prices.
The first case was during the anthrax terror scare of 2001, when Health and Human Services Secretary Tommy Thompson threatened to use section 1498 rights to allow for importation of generic ciprofloxacin. Cipro maker Bayer agreed to a lower price for the federal government so Thompson didn't have to make good on his threat.
More recently, its use was discussed on behalf of Louisiana when its health secretary, Rebekah Gee, was searching for a way to reduce Medicaid outlays for hepatitis C drugs. (States can invoke section 1498 because Medicaid is jointly funded by the federal and state governments.)
Her effort ultimately resulted in the establishment of a "Netflix model" that traded an unlimited supply of medication for a fixed fee.
"The effect of raising 1498 was that it really showed that she was serious about trying to solve a public health problem, and I think it caught people's attention for that reason," said Sharfstein, who was involved in the Louisiana hepatitis C program.
However, he sees 1498 as a limited tool to achieving drug price control. "I think that the stars have to align for that to work."
Still, adding section 1498 authority and march-in power to direct drug price negotiation could become part of a broader drug-price strategy, said Sachs.
"Industry has been so unwilling to accept even the most limited pricing reform strategies that advocates are now thinking that one of the most effective tools will be to use the same governmental authorities or to use stronger negotiating tactics."