[Ip-health] Congressman Sherrod Brown letter to Secretary Tommy Thompson urging a reversal on the NIH Norvir Decision

[Joy Spencer]

August 17, 2004


Hon. Tommy Thompson
Secretary
U.S. Department of Health and Human Services
200 Independence Avenue, SW
Washington, DC  20201

Dear Secretary Thompson:

The National Institutes of Health (NIH) recently received a petition to act
on behalf of consumers in the case of the AIDS drug Norvir.  That petition
was prompted by a drug company's decision to increase the price of an
essential AIDS drug by 400%, manipulate the market to its advantage, and
discriminate against American consumers.  NIH decided not to act.  I urge
you to reverse that decision.

The AIDS drug ritonavir was developed with NIH funding and licensed to
Abbott Laboratories, which markets it under the name Norvir.  Abbott's
development costs were comparatively low because of the duration and size of
clinical trials.  But Abbott made $1 billion on Norvir in just five years.
Abbott announced last year that it would increase Norvir's price by 400%,
exempt its own Norvir combination products from the price increase, and
apply the increase only to the U.S. market.

Earlier this year I asked that you take action to protect American AIDS
patients and U.S. taxpayers from this blatantly exploitative pricing policy.
Patient groups, AIDS providers and generic drug manufacturers petitioned you
for relief under the federal Bayh-Dole Act, which allows you to repair this
dysfunctional market by making ritonavir available through other suppliers.
You delegated the task of evaluating the Bayh-Dole "march-in" request to
NIH.  The agency's response is insupportable.

NIH looked at two of the four march-in criteria established at 35 USC
203(a), "practical application" and "health or safety." Its analysis
sidesteps key considerations and ignores a crucial statutory requirement.

NIH quotes the legal definition of "practical application" for products like
Norvir as manufactured "under such conditions as to establish that the
invention is being utilized and that its benefits are to the extent
permitted by law or Government regulations available to the public on
reasonable terms."  That definition has two parts: (1) that the invention is
being utilized; and (2) that its benefits are "available to the public on
reasonable terms."  But NIH's evaluation of the march-in request ignores
entirely the law's requirement to consider whether Norvir is "available to
the public on reasonable terms."  NIH bases its conclusion that Abbott has
met the practical application standard (see page 5 of the NIH decision,
paragraphs 2 and 3) because (1) Abbott produces Norvir; (2) Abbott sells
Norvir publicly; and (3) people buy Norvir.  At best, these findings support
a conclusion that Abbott has satisfied the utilization requirement for
practical application.  In no way do they suffice as the basis for a
determination that Abbott has met the "reasonable terms" requirement.

NIH's evaluation of the "health or safety" requirement is also less than
compelling.  NIH observes that Norvir was approved by the Food and Drug
Administration as "safe and effective" and is widely prescribed - in
essence, that there is no heath or safety concern with Norvir.  NIH
continues by asserting that there is no reason to expect that the agency's
exercise of march-in rights would more effectively address the health or
safety concerns that NIH has already determined do not exist.  There is no
indication that NIH considered the health or safety implications of the
price increase, itself.  When the geometric increase in drug prices has
driven many Americans to split their pills or choose between medicine and
food, such an inquiry would hardly be unreasonable.

It is difficult to conceive of more unreasonable terms than a 400% price
increase jerry-rigged to stifle competition and imposed only on one set of
consumers - American consumers.  NIH bypassed any consideration of price by
ignoring a statutory mandate - the mandate that it not only evaluate
"utilization," but also whether Norvir is sold on "reasonable terms."  That
fact should be sufficient to warrant your careful review of the agency's
Norvir decision.  Add to that an incomplete and circular analysis of the
law's health or safety requirement, and it is clear to me that you must act.

If you remain unconvinced, ask the next stranger you meet at the grocery
store. Tell them about Norvir and Abbott Labs' pricing policy, then ask if
that sounds to them like "reasonable terms."  It is unlikely they would
reply: the Bush Administration doesn't want to talk about the price issue;
therefore, price is not an issue.

I ask that you carefully review NIH's decision on the Norvir Bayh-Dole
march-in petition and act for the benefit of American AIDS patients and
American taxpayers.

					Sincerely,

					SHERROD BROWN
					Member of Congress

SB:ew

--
Joy Spencer
1.202.387.8030 (t)
1.202.234.5176 (f)
joy.spencer@cptech.org

Mailing Address:
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