Wired on Amgen EPO Dispute

[James Love <love@cptech.org>]

This story contains a mistake on the Orphan Drug Act, which I note in a
letter to the author, attached at the end of the story.  jamie

http://www.wired.com/news/news/technology/story/11740.html

Nader Takes Biotech Patent to Task
by Kristi Coale 

5:01am  17.Apr.98.PDT
The nation's number one consumer advocate has
asked the Clinton administration to investigate a
major biotechnology company regarding the
possible use of its patent power to suppress an
important public health invention. 

Ralph Nader and James Love sent letters on
Thursday to President Clinton and to Amgen chief
Gordon Binder. In the letters, Nader and Love
outline concerns over Amgen's apparent refusal to
commercially develop a protein that would make
the company's prize product, Epogen, more
accessible to patients who currently can't afford
the drug. 

"All we're saying [through the letter] is, 'Look, is it
your job to protect the public interest, or are you
going to sit back and take what randomly comes
out of private companies,'" said Love, an
economist and director of the Consumer Project
on Technology. 

At issue in this dispute is what obligation, if any,
do biotechnology companies have to act in the
public interest when portions of their inventions
stem from government-funded research programs. 

"EPO results from 30 years of government-funded
research -- it's turned Amgen into a Fortune 500
company," explained Love. 

Epogen, or EPO, is Amgen's brand name for its
recombinant human erythropoietin, a synthetic
protein that stimulates the body's production of
red blood cells. Red blood cells are key to the
transport of oxygen throughout the body, and are
in short supply in people who suffer from chronic
anemia. According to the National Center for
Health Statistics, some 4.7 million Americans
suffer from anemia. 

Those with immature immune systems, such as
infants and children, are particularly vulnerable to
anemia. Currently, high dosages of EPO are
needed by these patients because their bodies
naturally discharge large amounts of the protein
through their urine. EPO treatments can cost
several thousand dollars per patient per month. 

Enter Lawrence Berkeley Laboratory. A researcher
in this Berkeley, California-based government
laboratory developed a binding protein that would
increase the body's ability to absorb EPO, thereby
reducing the amount of EPO needed by a patient.
In some cases, the binding protein, which was
patented in 1997, could eliminate the need for
EPO entirely. According to Love's letter, the
researcher approached Amgen several years ago
in an attempt to commercialize the protein but
was turned down because, as Love outlined, "it
would significantly reduce the demand for EPO." 

Officials at Amgen did not return phone calls made
by Wired News. 

According to documents filed with the Securities
and Exchange Commission, Amgen indicated that
sales of Epogen accounted for about 48 percent of
its total revenues in 1997. 

It is also the favorite example of successful
biotech patents among industry observers such as
James McCamant, editor of the Medical
Technology Stock Letter. McCamant points to
Amgen's successes in fending off challenges to
its patent by worthy opponents like the Genetics
Institute. Through several successful defenses,
Amgen has been able to control the EPO market,
he noted. 

But part of this good defense has come with
government help. Love points to the Orphan Drug
Act, legislation enacted in 1983 to spur the
development of drugs for rare diseases, which
generally have a limited market. The act was to
give companies -– ideally, small startups -–
substantial tax credits for costs incurred during
human drug trials. In addition, the act also gave
companies seven years to exclusively market their
product. 

Amgen was awarded orphan drug status for
Epogen, which, in Love's estimation, diminished
any incentive for other companies to go forward
with any development on their own versions of
erythropoietin, simply because Amgen had seven
years to build on its patent and gain further
exclusivity, he explained. 

In the early '90s, the Orphan Drug Act expired, but
was made permanent in 1997 as part of the
mid-year Congressional budget bill. 

By asking for an investigation, Nader and Love
hope Amgen's actions will become a test case
that will ultimately lead to the development of a
social responsibility code for the biotech and
pharmaceutical sector. 


END OF WIRED STORY

-----------------------------
Subject:  RE Orphan Drug Act
   Date: Fri, 17 Apr 1998 09:30:42 -0400
   From: James Love <love@cptech.org>
     To: kcoale@wired.com

The Orphan Drug Act was passed in the early 1980s, and while it is
sometimes amended, it has never expired.  The Orphan Drug Tax Credits
did expire for a while, however, but now they are back on the books. 
The Tax Credits are one subsidy (half the cost of clinical trials).  The
other is the 7 year market exclusivity.  Amgen used the 7 years to build
up its patent portfolio.... jamie

-- 
James Love
Consumer Project on Technology
P.O. Box 19367, Washington, DC 20036
love@cptech.org | http://www.cptech.org
voice 202.387.8030, fax 202.234.5176