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Op-Ed | The American Prospect | June 23, 2023

The Obscure NIH Official Blocking Lower Drug Prices

Executive BranchHealthPharma
The Obscure NIH Official Blocking Lower Drug Prices

Sen. Bernie Sanders (I-VT) vowed to oppose President Joe Biden’s nominee to lead the National Institutes of Health (NIH) until the administration releases a comprehensive plan to lower prescription drug prices. Accompanying the announcement was a report from Sanders’ office on the prescription drug cost crisis, which recommends that the government “stop giving away monopolies on public inventions,” among other reforms.

People spend more on prescription drugs in the U.S. than in any other nation. Nearly 1 in 4 Americans struggle to afford their prescription medications, and the majority of Americans support government action to rein in high prescription drug costs. Sanders’ vow represents a much-needed use of political capital from Congressional progressives on an indispensable issue.

Unfortunately, Big Pharma’s hooks run deep in the federal health bureaucracy. For an example, take the man who just prevented price reductions on a drug treating the most common form of cancer in American men: a little-known, mid-level NIH manager named Mark Rohrbaugh.

The case centers on Xtandi (enzalutamide), a prostate cancer drug which has been on the market since 2012. Several petitioners recently requested the NIH to exercise “march-in rights” to bring the cost of the medication down, a request which Rohrbaugh denied in his role as Special Advisor for Technology Transfer to the NIH Deputy Director for Intramural Research. 

While Astellas and Pfizer currently manufacture the drug, Xtandi was developed at the University of California, Los Angeles with funding from the U.S. Army and the NIH. UCLA licensed the Xtandi patent to Medivation in 2005, which then entered a collaboration agreement with Astellas in 2009 to jointly develop and commercialize the drug. In 2016, Pfizer acquired Medivation and took over the collaboration with Astellas on Xtandi. Pfizer valued interest in its newly-bought drug license at $8.7 billion.

Astellas and Pfizer have since repeatedly hiked the price of Xtandi in the US even as individuals in Canada, Denmark and other high income countries access the medication for a fraction of the US price. Currently, Xtandi costs $130 per unit, or nearly $200,000 per year in the US; in other high income countries, the drug goes for around $20-45 per unit. 

There are nearly 250,000 prostate cancer diagnoses per year, but this prohibitive price point limits access to the treatment. In light of this barrier to access, four prostate cancer patients, joined by Universities Allied for Essential Medicines (UAEM) and Knowledge Ecology International (KEI) filed a petition in 2021 urging the Department of Health and Human Services (HHS) to utilize its authority to ease access to enzalutamide. HHS, under Secretary Becerra, referred the petition to the NIH. 

March-in rights allow the U.S. government to grant patent licenses to groups other than the owner of the patent, if the patented technology was subsidized by federal funding, and if the drug is not being offered on “reasonable terms.” 

The enzalutamide petition was endorsed by several groups and organizations, including a group of Harvard Medical School faculty, several United States Representatives and Senators, and multiple organizations advocating for lower prescription drug prices. 

Mark Rohrbaugh’s Crusade Against March-In Rights

Despite this, the NIH rejected the patients’ request, as it has for all eight march-in petitions since the authority was created in the 1980 Bayh-Dole Act. The NIH has consistently claimed that concerns over drug pricing are not sufficient to provoke march-in rights. Likewise, NIH argued that Xtandi is widely available on the market, and that there is no real need to intervene to increase accessibility. 

The NIH explained that since 2012, over 200,000 patients have been treated with Xtandi. But this fact doesn’t really tell us anything—200,000 sounds like a high number to most people, but the NIH doesn’t tell us what percentage of total prostate cancer patients this number represents, or if more or fewer patients would have had access to Xtandi if price barriers were lowered. 

The NIH not only alleges that this intervention would be beyond the scope of where march-in rights ought to be used, but that the use of march-in rights would be ineffective in actually decreasing the cost of Xtandi.

Notably, UAEM specifically requested the recusal of Mark Rohrbaugh from this decision, based on his history of opposing the use of march-in rights and his coziness with industry lobbyists. 

Rohrbaugh has worked at the NIH for over 30 years, including as Senior Advisor for Technology Transfer and Innovation since 2014. He was involved in other Xtandi march-in rights deliberations, including the rejection of a similar petition in 2017. Rohrbaugh’s refusal to march in on that Xtandi patent occurred when Astellas was charging $89 per unit;  Astellas has only raised the prices higher since. 

In dispensing with the 2017 petition, Rohrbaugh drafted a letter for then-NIH Director Dr. Francis Collins. When testifying before Congress on reasonable thresholds to march-in, Collins often deferred to the answers of close legal advisors, including Rohrbaugh. With prior NIH march-in petitions, Rohrbaugh had requested that all communications and materials be directed through him. 

Rohrbaugh has given explicit support to private-public partnerships in the development and discovery of drugs. In a 2014 paper in Nature, Rohrbaugh lauded the current system, where public funding for pharmaceutical research is later commercialized by the private sector. Rohrbaugh argued that “NIH technology transfer program passes technologies to the private sector for further research and development, ultimately benefiting the public through the introduction of new products and the resulting economic growth.” 

There’s no doubt that public funding has been instrumental in the development and discovery of most drugs. However, it’s also clear that commercialization of publicly-funded research does not center public health, especially considering the tactics pharmaceutical companies frequently employ to constrain supply or raise prices. March-in rights are an important mechanism to ensure that the public interest is preserved. Any analysis that fails to acknowledge this reality is incomplete.

Rohrbaugh’s track record shows a clear disinterest in solving the issue of high drug prices. His previous work emails clearly indicate a strong personal belief that high drug prices don’t necessitate the use of march-in rights. He has repeatedly communicated with prominent anti-march-in rights lobbyists to cast march-in rights as harmful to drug development and public health. In fact, Joseph Allen, a lobbyist Rohrbaugh has maintained close contact with, published an op-ed in early 2022 claiming that it was “insane” to challenge the NIH’s refusal to ever use its march-in rights authority.  

Similarly, while giving a talk for the Bayh-Dole Coalition, a patent rights lobbyist group which Allen leads, Rohrbaugh endorsed prior NIH actions that weakened reasonable pricing measures for publicly-funded inventions. He misconstrued those public-benefit measures as having “not provided benefits,” failing to recognize ways that the NIH had been derelict in enforcing those measures due to industry lobbying. 

Rohrbaugh’s stance closely aligns with Astellas’ claims that the use of march-in rights might deter future innovation without reducing drug prices, a standard industry talking point. However, prior studies have clearly shown the potential that march-in rights have in decreasing the cost of drugs developed with public funding, Xtandi in particular. Rather than $1.4 billion being spent by Medicare in 2019, the government could leverage its royalty-free license under all FDA patents for enzalutamide, and have a generic version made for $3 per dose

Rohrbaugh’s personal views have repeatedly run contrary to the Biden administration, placing him in opposition to both the public and administration officials. A 2021 report from Secretary Becerra confirmed that Health and Human Services would support the use of march-in rights, particularly in situations where benefits of a patent aren’t available to the public on reasonable terms. That signaled some room for interpretation on what barriers could prevent “reasonable terms” of access to patented innovations. However, with officials like Rohrbaugh at the helm, HHS is positioned to continue acting in the interest of pharmaceutical companies instead of the American public.

Even The Administration’s Best Intentions Can Fail In The Face of Big Pharma Stalwarts

The Biden administration has made lofty promises on drug pricing since its inauguration, including in the Executive Order on Promoting Competition in the American Economy, which supported promoting competition with generics and biosimilars in the pharmaceutical market, and directed the FDA to work with states on importing generic medications from Canada.

Even after the Xtandi decision came out, HHS and the Department of Commerce announced a plan to review authorities granted to the federal government on march-in rights. Their March 2023 announcement noted that “The Interagency Working Group for Bayh-Dole will develop a framework for implementation of the march-in provision that clearly articulates guiding criteria and processes for making determinations where different factors, including price, may be a consideration in agencies’ assessments.” 

Separately in the announcement, the agencies noted that, “consistent with President Biden’s Executive Order on Promoting Competition in the American Economy, the DOC has not finalized any provisions on march-in rights in this revised rule that would have prohibited the government’s use of march-in solely on the basis of product pricing.” A Commerce Department agency did reject an effort initiated in the Trump administration to eliminate march-in rights for pricing. But if the Rohrbaugh barrier remains, march-in for pricing is just a theory.

The administration has tremendous potential to leverage march-in rights to fulfill one of Biden’s biggest promises: decreasing the cost of prescription drugs. Even the possibility of the federal government using this power creates a significant deterrence mechanism for pharma giants, when they know their price gouging won’t slide. Xtandi was the perfect instance for the administration to do the right thing and set a positive example. 

But as we’ve repeatedly argued, personnel is policy, and Sanders’ promise to only support nominees who support NIH action on high drug prices is critical. As long as officials like Rohrbaugh remain key decision makers in the process, march-in rights and other options to make drugs more affordable will remain elusive. 

Executive BranchHealthPharma

More articles by Ananya Kalahasti

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