Pharma Giant Fails To Mention — For 18 Years — That US Government Helped Fund A Key Patent Used In Drug That Has Generated $53 Billion In Sales So Far

from the reasonable-terms dept

It’s no secret that drug prices are often high, and continue to rise — by 32% in the past five years according to one analysis. It’s only natural that many should be willing to pay even exorbitant amounts for drugs. If there is the hope of a cure, or at least of some relief from pain and symptoms, for themselves or their family, most people would probably put that above money.

It’s less obvious why drug prices are so high in the first place. The standard response from the pharma industry is that companies need incentives to develop new treatments, and these are typically in the form of the high prices they can charge. Although plausible, it overlooks the important contribution that publicly-funded research makes here. Many new drugs are made possible thanks to ground-breaking early work by academics in universities or institutes, not in companies. That’s not something that Big Pharma likes to talk about, as this post from James Love on the Bill of Health blog reminds us:

This is a story about U.S. patent number 6,958,335, and how it took more than 18 years for Novartis to acknowledge National Institutes of Health (NIH) funding in a key patent for Gleevec, allowing Novartis to shape the narrative regarding its role in the development of Gleevec, and also to avoid demands that Novartis make the invention “available to the public on reasonable terms,” which is an obligation under the Bayh-Dole Act.

Gleevec is one of the drug industry’s biggest successes. An article on the Nature site explained back in 2008:

Some say it’s a miracle drug. Others call it a silver bullet. Gleevec, also marketed internationally as Glivec and sometimes referred to by its chemical name imatinib, entered the medical world with a bang. This medication was initially approved for use by the U.S. Food and Drug Administration (FDA) in 2001 for the treatment of chronic myelogenous leukemia (CML), a rare form of cancer that affects certain types of white blood cells.

That “miracle drug” has meant big money for Novartis. According to the Bill of Health blog post, by the end of 2018, the cumulative sales for Gleevec exceeded $53 billion. Love notes that as an invention that was partially funded by taxpayers, Novartis ought to have made the invention “available to the public on reasonable terms”. That would presumably have translated to a lower price, and possibly to more people taking the drug, and more lives being saved. Those didn’t happen, because Novartis didn’t acknowledge the NIH funding until now, a mere 18 years late. Sadly, this is not an isolated case of forgetfulness, as Love points out in his conclusion:

[Knowledge Ecology International] has written the NIH on several occasions to identify cases where inventors have failed to acknowledge federal funding in patent applications. Such cases have not been difficult to find. In the 1990s, Congress and [US Department of Health & Human Services] investigated such failures to disclose, and found widespread non-compliance with disclosure mandates, and lax oversight. This is an area where new Congressional oversight would be welcome, particularly as the question of the federal role in drug development is being spun by various parties.

That’s worth bearing in mind the next time Big Pharma tries to justify eye-watering drug prices because of the innovative research required to create them.

Follow me @glynmoody on Twitter, Diaspora, or Mastodon.

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Comments on “Pharma Giant Fails To Mention — For 18 Years — That US Government Helped Fund A Key Patent Used In Drug That Has Generated $53 Billion In Sales So Far”

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21 Comments
Veri Adeptat Puns says:

HOO! Masnick is once again for PIRATE HEALTHCARE.

I TOLD you anklebiters, if you didn’t pay for it, you DON’T deserve it! All you can do is yap yap yap because you think sick people deserve to LIVE. Corporations don’t have RIGHTS, Masnick, but since you insist on GOOG, I will HOOT for any corporations to destroy yours. You will NEVER chase me away.

HOOOOOOOT!

Scary Devil Monastery (profile) says:

Re: Re: Re:3 Re:

"Sadly he won’t take his own advice. Copyright-types have always been shit at that."

I’m guessing it’s a troll trying to imitate the genuine Baghdad Bob/Blue.

But Poe’s Law prevails – it’s understandably difficult to try to differentiate between someone TRYING to sound as demented as Bobmail…or Bobmail himself. It’s that bad.

PaulT (profile) says:

It’s the siren call of modern capitalism – socialise the risks, privatise the rewards. If something fails, let the public take the hit. If something succeeds, make sure nobody else has access to it without paying top dollar.

But, remember, using the same tax dollars to ensure people actually get healthcare is socialism! Just as a quick aside, this is the drug under its non-brand name Wiki page:

https://en.wikipedia.org/wiki/Imatinib

In the United States a typical dose for a year has a wholesale cost of $84,408.78,[4] while in the United Kingdom the NHS was paying about £20,980 ($27973) in 2016.[5] A generic version became available in the UK as of 2017.[6]

Anonymous Coward says:

Vastly overstated

To even suggest that acknowledging federal funding would have triggered federal intervention in pricing of imatinib (or any other drug) is vastly overstating the case. Such a scenario has never happened in the history of Bayh-Dole. There have been at least 6 petitions to NIH to invoke the reasonable terms language to control the price of a drug and all have been denied. It is pretty clear that the people that make the decisions have sided with the legal analysis that says the Bayh-Dole clause doesn’t allow the government define a reasonable price for a drug. There are reasonable arguments against this interpretation, but no one making them is in a decision making position. See for example this paper for a summary.

Anonymous Coward says:

i have to wonder and therefore ask, how many in government and elsewhere are getting kickbacks for not exposing something that must surely have been known? if public funds are used, not only should this be made known universally but the citizens in the country where the public money came from should get a massive discount, surely? what right has any company got to take public funds, then screw over the very people who provided those funds? the politicians involved in this need to be brought to light and publicly held accountable! and the price should be dropped substantially immediately as well as all public funding returned for others to benefit from!

Anonymous Coward says:

Thing is, this isn’t unique to pharmaceuticals. It’s true for most technologies, especially computing and research into new materials. Federal funding for research and joint development manufacturing is the norm for defense contractors in the US, but there’s literally no expectation of that resulting in lower prices for the consumer goods built off of that technology.
Why does Big Pharma have a duty to acknowledge the role of public funding when nobody else does it? And why do we never hold other industries to this same standard?

unindicted co covfefe says:

Re: Re:

"Federal funding for research and joint development manufacturing is the norm for defense contractors in the US, but there’s literally no expectation of that resulting in lower prices for the consumer goods built off of that technology.
Why does Big Pharma have a duty to acknowledge the role of public funding when nobody else does it?"

Logic fail.
The government, including the military, are not allowed to hold what is referred to as Intellectual Property, whereas the pharma industry is.
This may have changed as I recall reading an article about some branch of the military owning a patent or something.

Anonymous Coward says:

Re: Re: Re:

The government, including the military, are not allowed to hold what is referred to as Intellectual Property

As a general rule this is false. Government employees have always been able to be inventors on patents. Work by federal employees can not be copyrighted, but that isn’t the issue here. It also only applies the actual federal employees, not to people employed by a grantee or contractor, no matter how much federal money is involved.

Anonymous Coward says:

Re: Re: Re:2 Re:

afaik, government is not supposed to hold IP

I worked for the federal government for over 35 years and I never heard that. In fact I was an inventor on a patent from my work and the NIH tech office managed the patent filing and managed the licensing after it issued. See here. You might be mixing this policy up with the patent policy on work done on grants, contracts, or other federal money. In that case Bayh-Dole is relevant and there is a very strong presumption all patent filing and management will be done by the institution that did the work, NOT the federal government.

Wyrm (profile) says:

The problem comes from the fact that us-version capitalism had been corrupted to no end.

On the one hand, drugs and their benefits have been privatized, even when research was publicly funded. Which should be tagged as socialism, according to some so-called "capitalists".

On the other hand, the government has tied its own hands by passing a law stating that it’s barred from negotiating drug prices. Not "setting" mind you. "Negotiating". That’s the base of free market economics, according to right-wingers themselves… when they speak about non-government entities.

Seems like an extreme case of double standards, with greed as the all-too-obvious motive.

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