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Gilead disputes need for march-in rights to remdesivir to increase access, lower price

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COVID-19 has spurred the latest demand for the federal government to exercise a power, yet unused, to lower drug prices by terminating a manufacturer’s exclusive license.

In a letter Tuesday, 34 U.S. attorneys general urged FDA and NIH to license remdesivir from Gilead Sciences Inc. (NASDAQ:GILD) to a third party to increase production of the antiviral and lower its $520-per-vial price tag.

The company denied a supply issue in its response Thursday, asserting that “most eligible patients hospitalized in the U.S. are able to get remdesivir.”

Under the Bayh-Dole Act, federal agencies can exercise “march-in rights” to retain patents for therapies developed with federal funds if the drug developer fails to reasonably “alleviate health or safety needs” of consumers. This would allow for third parties to manufacture the therapy and introduce generic competition.

NIH Director Francis Collins has repeatedly said the agency will not use march-in rights as a tool to lower drug prices, but has acknowledged they could be exercised to ensure access to a product if a licensee is not manufacturing it or if it is in short supply (see “Progressive Ideas”).

Since 1997, NIH has received and rejected six petitions requesting that it reassign patent rights, the most recent being a 2016 request to create generic competition for prostate cancer therapy Xtandi enzalutamide from Astellas Pharma Inc. (Tokyo:4503) (see “NIH Refuses March-in Request”).

In the letter, the AGs claimed that exercising march-in rights is necessary because Gilead has not set a reasonable price for remdesivir and is unable to guarantee a supply “sufficient to alleviate the health and safety needs of the country amid the pandemic.”

Gilead disputed any problems with U.S. remdesivir’s price. The company pointed to the more than $1 billion it is investing this year to expand manufacturing capacity, as well as projected hospital savings from shortening stays of COVID-19 patients.

Gilead also asserted that licensing remdesivir to third party manufacturers “will do nothing to produce additional doses of remdesivir this year” as manufacturing takes six to 12 months.

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