Attorney Generals Seek to Force Gilead into 1980 Bayh-Dole Act Provisions to Lower Price & Open Up Supply: Are they Naïve?

Aug 7, 2020 | Competition, COVID-19, News, Price Watch, Remdesivir, State Attorney Generals

Attorney Generals Seek to Force Gilead into 1980 Bayh-Dole Act Provisions to Lower Price & Open Up Supply Are they Naïve

A group of Attorney Generals (AGs) representing 34 states came together in a bipartisan manner to request the U.S. Department of Health and Human Services to invoke a federal patent law to increase supply and lower prices of the COVID-19 drug remdesivir. Their premise: Gilead is taking advantage of the pandemic to maximize profits, and the American people are paying the price whilst in a pandemic. The AGs are naïve and don’t understand the rabbit hole they are now going down now: they may never come back up. That the federal government created Gilead’s monopoly in the first place should be apparent to well-educated attorneys. This won’t end up well and will lead to more concentrated power and even less competition.

Led by Xavier Becerra, as well as Jeff Landry, Attorney Generals of California and Louisiana respectively, the group argue that the U.S. Food and Drug Administration (FDA) and the National institutes of Health (NIH) should bypass Gilead Sciences intellectual property claims and force the maker of remdesivir to accept direct government licenses to other drug manufacturers to reduce possible shortages and lower the drug’s price during the raging COVID-19 pandemic.

Price Gouging Allegations

The Attorney Generals allege Gilead is acting to gouge the market, exploiting a pandemic with the only FDA authorized treatment (is not a full approval but rather emergency in the hospital). Presently, Gilead charges $3,120 for a five day course for those with private insurance while Medicaid or Medicare beneficiaries are charged $2,340 for that same treatment regimen.

Although, the TrialSite can attest that Gilead did price rationally as described by the nonprofit drug pricing expert called Institute for Clinical and Economic Review (ICER). Nonetheless, the prices still are more than many can afford, and this is in the context of worst pandemic in modern history. Moreover, the ICER pricing assumes a benefit on mortality rate, which it hasn’t demonstrated as of yet.

Supplies ‘Dangerously Limited’

The Attorney Generals argue that due to incredible demand of this product, again this is because it’s the only one officially “approved” by the FDA, supply of the product is “dangerously limited.” Therefore, as the Attorney Generals watch chaos caused by COVID-19, they are pleading for relief as the combination of supply challenges and price will “impede access to treatment,” thereby materially straining state budgets in a time of great economic crisis. But that’s exactly what happens when one company is granted what is essentially a monopoly during a time of great demand (e.g. a pandemic). Gilead isn’t the culprit. But are the AGs intelligent enough to understand this?

The Legal Authority

The State Attorney Generals seek to utilize the 1980 Bayh-Dole Act, which actually has sections that allow federal agencies to retain patent rights under certain scenarios, such as if a biopharmaceutical company, for example, price gouges and/or fails to reasonably “alleviate health or safety needs of consumers of the United States.” Apparently, the law allows for states to take action if federal agencies refuse the request. Hence, the Attorney Generals seek an optional “march-in” for rights to be assigned to the states. The lawyers here think they’re smart, thinking out of the box, but they actually play right into far bigger hands.

Federal Government Created the Problem

TrialSite suggests this is just the tip of the iceberg as remdesivir’s quasi monopoly is the result of intervention of the federal government via the National Institutes of Allergy and Infectious Disease (NIAID), part of the National institutes of Health (NIH) with the FDA’s blessing.

Why does TrialSite make this allegation? Due to a confluence of factors and forces, Gilead is the first biotech company in history to develop a Blockbuster even before a complete approval (presently remdesivir is approved under an EUA). Thanks to some questionable moves by NIAID’ led by Dr. Anthony Fauci, the drug was awarded artificial quasi monopoly status and federal backers were surely aware of the consequences in this country. Ironically, this is a drug that Dr. Fauci himself on the one hand declared the new “standard of care” but nearly in the same sentence qualified “this is no knock out drug.”

But the sponsor of the clinical trial that led to the FDA authorization, NIAID, actually changed the primary endpoint of the clinical trial to ensure that the trial would be successful. The protocol of the “adaptive trial” called for a reduction in death rate. There was no evidence supporting the claim that Gilead’s remdesivir reduces the death rate of COVID-19, and that became very apparent in the clinical trial.

So what did NIAID under Dr. Fauci’s leadership do? Audacious, over-empowered and full of hubris, they simply changed the endpoint to meet their agenda: why not just change the primary outcome measures to a reduction in duration of hospitalization recovery time toward the end of the trial when it “isn’t going our way”? The study revealed that on average patient hospitalization was reduced from 15 days down to 11. And there it was, history was made right in front of a misinformed, naïve and herd-like American public.

In this highly questionable move, Fauci revealed a true bias that cannot be overlooked. And in the process, these actions exhibit how federal government tampering with drug markets, although undoubtedly well-intentioned in officials’ own minds, can lead to unintended adverse consequences. The American people are paying the price.

State AGs Going Down a Rabbit Hole

Unfortunately, the State AGs believe the answer is to expend enormous time and energy (and money) in a battle over remdesivir when the drug, as Dr. Fauci himself declared, is “no knock out drug.” It only serves to make the drug more valuable and contribute to NIAID’s intentions in the first place: that is to position remdesivir as the only antiviral in town. This is a mistake. The real answer is diversification and competition: real competition. TrialSite tracks a number of antivirals and other drugs being tested around the world that appear to be making a real difference. In some cases, the results are better than remdesivir. Favipiravir has been approved in Russia, China as well as India to treat COVID-19. Although there are a few clinical trials in the U.S., it would appear there is a near press blackout on the matter. The politicization of hydroxychloroquine needs no mention.  

Real Answer to COVID-19 is Diversification & Competition

As TrialSite addressed in “Not a ‘Knockout Drug’ But Knocking it Out of the Ballpark: Gilead Windfall as Remdesivir COVID-19 Sales to Hit $1 to $3 Billion,” the answer won’t be all out political war over a drug that has “so-so” impact anyway. State Attorney Generals unfortunately are evidencing their own naivety as they actually play right into a sort of federally created market trap. 

Americans must open their eyes to what the country is becoming: not a dynamic, critical thinking, free market but rather a sort of imperial federally-directed “Crony Capitalist” State not even capable of looking just a little bit critically at what’s really going on. Unfortunately, as brilliant as the leadership of organizations such as NIAID are, they are too far gone to make a difference; they have become the gatekeepers for the drug-industrial-complex, one of the several such complexes now in this unfolding and devolving world. A move to dynamic competition against remdesivir is the answer, not a war to usurp its intellectual property rights in a bid to make more of a drug that’s no “knock out.”

The Light of Liberty Fades Away

An American spirit emanating from the beginning, demanding real choice and accountability, independence and self-sufficiency driven by a restless urge for continuous self and community improvement, liberty and a pursuit of a whole new kind of existence—based on the forcible removal of a royal monarch—moves well into its twilight, as the transition to a dramatically new age arrives. It will never be the same.

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