[Random-bits] OMB asked to use US rights in government funded patents to buy two generic AIDS drugs (d4T and ritonavir)

Thu Jan 18 05:47:01 2007

http://www.huffingtonpost.com/james-love/
the-high-prices-we-pay-fo_b_38213.html

The Huffington Post
The high prices we pay for government funded inventions
January 9, 2007

On January 5, 2006, Essential Inventions, a non-profit drug company,
offered to sell the US government generic versions of two AIDS drugs,
that were invented on government grants. The federal government can
buy the generic products if it wants, because both drug were invented
on federal grants or contracts, and the government has royalty free
licenses in the key patents. Who thinks the federal government will
use it's royalty free license to the patents to save the taxpayers
money?     [snip]

The letter to OMB:
http://www.essentialinventions.org/eii2omb-5jan07.pdf

ESSENTIAL INVENTIONS, INC

1621 Connecticut Avenue, Suite 550, Washington, DC 20009
Voice +1.202.332.2670, fax +1.202.332.2673
http://www.essentialinventions.org

5 January 2007

Robert Portman, Director
The Office of Management and Budget
725 17th Street, NW
Washington, DC 20503

Via fax 1.202.395.1005

Re: Federal Procurement of Patented Drugs under Statutory Licenses

Dear Director Portman:

We are writing to request that your Office take steps to develop and
accept alternative competitive sources of supply for federal
procurement of two medicines the patents for which the government has
statutory licenses.  This action can save the federal government (and
taxpayers) hundreds of millions of dollars.

Under U.S. Code tit. 35, =A7=A7 202(c)(4) and 209(d)(1), the federal
government retains worldwide, non-transferable, irrevocable, paid-up
licenses to practice, or to have practiced for or on its behalf,
patents resulting from sponsored research or patents owned directly
by the government, respectively.

To demonstrate the importance and practical benefit of the statutory
licenses, Essential Inventions is willing to manufacture, import, and
sell to the federal government inexpensive generic versions of two
drugs used for the treatment of HIV/AIDS.  Stavudine, or d4T, is
marketed in the U.S. by Bristol Myers Squibb under the trade name
Zerit.  Ritonavir is marketed in the U.S. by Abbott Laboratories
under the trade name Norvir.  Patents on these two drugs in which
the federal government has statutory licenses under the
aforementioned =A7 202(c)(4) are listed in Attachment A.

The federal government procures these drugs for distribution by the
Department of Defense, the Public Health Service, the Federal Bureau
of Prisons, the National Institutes of Health, and the Department of
Veterans Affairs.  Both drugs are listed on the Federal Supply
Schedule.  The President's Emergency Plan for AIDS Relief (PEPFAR)
also directly procures drugs for distribution in developing
countries, and, with an eye to maximizing access, already procures
FDA-approved generic versions of d4T.  Furthermore, the federal
government pays for these drugs under various reimbursement programs,
such as Medicaid, the AIDS Drug Assistance Program (ADAP), and the
federal Office of Personnel Management health insurance programs.

Specifically, we request that OMB do the following:

1)	Provide Essential Inventions and any other qualified supplier =
with
an agreement to use the patents listed below for the purposes of
supplying the federal government with d4T and ritonavir.

2)	Support any changes in rules or legislation that may be =
necessary
to expand the authority of third parties that administer federally
supported health programs to procure generic copies of d4T,
ritonavir, and other federally funded pharmaceutical inventions
directly for distribution to patients.

If the federal government should exercises its statutory patent
licenses for drugs resulting from research paid for by the U.S.
taxpayer it can obtain medicines at significant savings to U.S.
taxpayers.  For example, d4T from BMS is now priced at more than
$3,600 per year on the Federal Supply Schedule, but generic d4T costs
less than $50 per year in countries where generic competition is legal.

In the case of ritonavir, the federal government can address another
serious problem.  Abbott Laboratories increased the price of
ritonavir 400 percent in December of 2003, but only applied the price
increase in the United States, if one used ritonavir with a non-
Abbott supplied protease inhibitor.   The price hike for ritonavir
did not apply to some federally supported health programs, but did
for others.

Far lower prices exist for ritonavir outside of the United States,
where Abbott sells the product at one-fifth to one-tenth the U.S.
prices, or when ritonavir is purchased in a co-formulated version
with lopinavir, as Kaletra.

Abbott=92s 400 percent price hike for the standalone price of ritonavir
was designed to make it prohibitively expensive for AIDS patients to
use ritonavir with non-Abbott protease inhibitors, an anticompetitive
strategy that is at the center of a January 3, 2006 report in the
Wall Street Journal (see: John Carreyrou, "Inside Abbott's Tactics To
Protect AIDS Drug: Older Pill's Price Hike Helps Sales of Flagship; A
Probe in Illinois," Wall Street Journal, January 3, 2007; Page A1.)

Abbott has also refused to license the ritonavir patents to other
U.S. manufacturers of protease inhibitors, which has decreased the
choice and quality of medicines available to AIDS patients.   We
therefore additionally request OMB to permit other manufacturers of
AIDS drugs to use the patents on ritonavir to provide co-formulated
AIDS drugs for federal uses.

By lowering the cost of these HIV/AIDS drugs it will be possible to
expand other services to persons living with HIV.

We look forward to your reply.

Very truly yours,

James Love
Chairman of the Board of Directors
Essential Inventions, Inc

Cc:   Senators Sherrod Brown, Ted Kennedy, Bernard Sanders, Hillary
Clinton, Barack Obama.  Representatives Henry Waxman, Tom Allen, Dave
Obey, Janice Schakowsky, Rahm Emanuel.

Attachment A

List of U.S. Patents in which the federal government retains
statutory licenses under 35 U.S. Code =A7 202(c)(4).

Stavudine (d4T)

U.S. Patent No. 4,978,655

Ritonavir

U.S. Patent No. 5,541,206
U.S. Patent No. 5,635,523
U.S. Patent No. 5,648,497
U.S. Patent No. 5,674,882
U.S. Patent No. 5,846,987
U.S. Patent No. 5,886,036

---------------------------------
James Love, CPTech / www.cptech.org / mailto:james.love@cptech.org /
tel. +1.202.332.2670 / mobile +1.202.361.3040

"If everyone thinks the same: No one thinks."  Bill Walton"

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---------------------------------
James Love, CPTech / www.cptech.org / mailto:james.love@cptech.org / =20
tel. +1.202.332.2670 / mobile +1.202.361.3040

"If everyone thinks the same: No one thinks."  Bill Walton"