A drug and its irony
The illogic of a cancer drug developed in the US with public funds which private firms get to sell at extortionate prices
Xtandi is a classic case of how the US subverts its own logic on patents
FOR A drug with the breezy name of Xtandi, the medication brings little cheer to those who most need it: patients waging a battle against prostate cancer. In the US, where the drug was developed, it commands an average wholesale price of around $129,000 for a year’s treatment, or nearly $89 a pill, two to four times higher than in other rich countries.
This is just one of the ironies surrounding Xtandi which is a classic case of how the US subverts its own logic on patents. It is by no means the only such instance but Xtandi serves as an excellent illustration of the absurdities of the US patent, a system that the US has been doing its best to impose on hapless developing countries. The US believes patents are essential to promote and reward innovation; if not, there would be no incentive for anyone to invent anything. That’s fair enough. But how do companies get to decide the price they claim is needed to recover the cost of innovation and is commensurate with patient benefit, specially when public funds have been used?
The bigger question is why the US does not use the safeguards in its laws such as the Bayh-Dole Act to override patents in cases of extreme profiteering. The US excuse is that the use of march-in rights or compulsory licences (CLs) to lower prices would act as a disincentive to create new products. But in the case of medicines, cost has to be factored in since an unaffordable drug is as good as useless.
The Xtandi absurdities start with its genesis. It was developed by researchers at the University of California, Los Angeles (ucla), through taxpayer-supported grants from the National Institutes of Health (nih) and the US Department of Defence. nih licensed the drug to biopharma company Medivation, which tied up with the Japanese firm Astellas Pharma to commercialise it. In August 2016, Pfizer bought Medivation and thus owns the rights to Xtandi in the US. Here comes the biggest twist: While Astellas markets the drug at $39,000 in Japan and $30,000 in Canada, Americans have to pay an astronomical $129,000. Perhaps, there’s a simple math to this extortion: prostate cancer is the third leading cause of cancer deaths among US men. And costs clearly have gone through the roof because drug firms have been allowed to abuse the monopoly powers granted by patent rights.
Lawmakers and non-profits working on public health have campaigned hard to get the nih to override the patent on Xtandi to make the drug more affordably priced. Senators, led by Bernie Sanders, have urged it to “use every tool available” to put an end to the “outrageously high prescription drug prices” charged by pharma giants. The senators reasoned that if Americans pay for research which results in a drug discovery they should be entitled to it at a reasonable price. The tools they speak of are the marchin rights that are enshrined in the Bayh-Dole Act or CLs through which nih can authorise the generic production of a drug. In fact, a Canadian company has offered to make Xtandi for as little as $3 per pill to the US government for use in its Medicare programme. The drug is among the costliest prescribed in Medicare. But it is unlikely that any US government will use the available safeguards against an industry which is a major contributor to election funds.
In India, Xtandi costs `3.35 lakh for a month’s treatment and is out of reach of most patients. Fortunately, the Patent Office has rejected ucla’s patent claims on the ground that Xtandi is a new form of a known substance. Interestingly, ucla has reduced its initial claims for 46 patents to just three after a hearing with the Controller of Patents. The case is now in the courts.