Novartis, the Good Samaritan

As discussed in a previous post, the Covid-19 pandemic is an excellent opportunity for the pharmaceutical industry to demonstrate its commitment to serving the world through philanthropy.  Novartis recently stated that it will “donate up to 130 million doses” of a generic drug which may be a good treatment for coronavirus.  The Press Release further outlines Novartis’ other efforts to combat Covid-19.  Notably, Gilead Sciences received a significant amount of criticism for its attempt to get a potential treatment for Covid-19 orphan status under U.S. law—which it has since withdrawn.  Professor Lisa Larrimore Ouellette has an excellent analysis of the situation, here.  The Novartis Press Release states, in part:

Basel, March 20, 2020 - Novartis announced today its commitment to donate up to 130 million doses of generic hydroxychloroquine to support the global COVID-19 pandemic response. Hydroxychloroquine and a related drug, chloroquine, are currently under evaluation in clinical trials for the treatment of COVID-19. Novartis is supporting ongoing clinical trial efforts, and will evaluate needs for additional clinical trials.

When supported for use in COVID-19 infected patients by regulatory authorities, Novartis intends to donate up to 130 million 200 mg doses by the end of May, including its current stock of 50 million 200 mg doses. The company is also exploring further scaling of capacity to increase supply and is committed to working with manufacturers around the world to meet global demand.

Novartis Sandoz division currently only holds a registration for hydroxychloroquine in the U.S., and will pursue appropriate regulatory authorizations from the U.S. FDA and the European Medicines Agency. Novartis will work with stakeholders including the World Health Organization to determine the best distribution of the medicine to ensure broad access to patients most in need of this medicine globally. The company aims to ensure that patients currently depending on this medicine are not impacted by the donation.

The commitment announced today builds on the previously announced commitments of a USD 20 million Novartis COVID-19 Response Fund, drug discovery collaboration efforts, support of clinical trials for existing Novartis medicines, and the Sandoz commitment to maintain stable prices on a basket of essential medicines that may help in the treatment of COVID-19.

Novartis intends to work closely with other manufacturers to scale up production of hydroxychloroquine as necessary to support global supply, and encourages industry, governments and international institutions to ensure adequate global supply of medications to treat COVID-19 patients.

US FTC and DOJ, Antitrust Division Modify Antitrust Procedures in Light of Coronavirus

The Federal Trade Commission and the U.S. Department of Justice, Antitrust Division have modified procedures for antitrust review and provided direction for businesses addressing the coronavirus.  The Press Release from the FTC states, in part: 

The Federal Trade Commission and the U.S. Department of Justice Antitrust Division today issued joint statement detailing an expedited antitrust procedure and providing guidance for collaborations of businesses working to protect the health and safety of Americans during the COVID-19 pandemic.

The expedited procedure notes, for example, that health care facilities may need to work together in providing resources and services to assist patients, consumers, and communities affected by the pandemic and its aftermath. Other businesses may need to temporarily combine production, distribution, or service networks to facilitate production and distribution of COVID-19-related supplies.

Under the expedited procedure for COVID-19 public health projects, the agencies will respond to all COVID-19-related requests, and resolve those addressing public health and safety, within seven calendar days of receiving all information necessary to vet these proposals. The statement sets out the instructions for businesses wishing to take advantage of this procedure.

The expedited COVID-19 procedure offers quicker review than existing FTC and Justice Department programs that are designed to provide guidance to businesses concerned about the legality of proposed conduct under the antitrust laws. The FTC’s “Staff Advisory Opinion” procedure and DOJ’s “Business Review Letter” procedure allow any firm, individual, or group of firms or individuals to submit a proposal to the agencies and to receive a statement advising whether the agencies would challenge the proposed activity under the antitrust laws.

“Under these extraordinary circumstances, we understand that businesses collaborating on public health initiatives may need an expedited response from U.S. antitrust authorities,” said FTC Chairman Joe Simons. “We are committed to doing everything we can to help with these efforts, while continuing to aggressively enforce the antitrust laws.”

“The Antitrust Division recognizes the importance of providing clarity expeditious clarity on any antitrust obligations in this challenging time,” said Assistant Attorney General Makan Delrahim of the Department of Justice’s Antitrust Division. “Our expedited Business Review Letter procedure will help facilitate businesses that want to work quickly to address the urgent public health and economic needs associated with COVID 19.”

The antitrust laws accommodate procompetitive collaborations among competitors. In their joint statement, the FTC and the Department of Justice listed several types of collaborative activities designed to improve the health and safety response to the pandemic that would likely be consistent with the antitrust laws.

At the same time, the agencies also stressed that they will not hesitate to hold accountable those who try to use the pandemic to engage in antitrust violations. In addition, the Department of Justice will criminally prosecute conduct such as price-fixing, bid-rigging, or market allocation.

The expedited procedure requires that an applicant provide the FTC or Justice Department a written description of the proposal, including the parties that would be involved in the effort or activity, and the name and contact information of a person from whom the agencies could obtain additional information. This expedited procedure is for use solely for coronavirus-related public health efforts and may be invoked at the option of the requestor, in lieu of the agencies’ standard procedures for handling requests for advice.

The agencies also committed to expedite requests under the National Cooperative Research and Production Act for flexible treatment of certain standard development organizations and joint ventures. 

The statement also notes that the FTC and the Justice Department are addressing actions by individuals and businesses to take advantage of COVID-19 through other fraudulent and illegal schemes. Anyone with information or concerns about this sort of conduct, or other COVID-19-related complaints, should contact the FTC’s Consumer Response Center at 1-877-382-4357 or the National Center for Disaster Fraud Hotline (1-866-720-5721) or e-mail (disaster@leo.gov). More information on the FTC’s guidance on potential fraud, deceptive practices, and scams is available here, and to report a complaint go to www.ftc.gov/complaint.

Is it Time to Increase Funding to Universities for Research and Development in the United States?

In a document released by the Association of American Universities (AAU), Mary Sue Coleman, president of the organization, discusses Vannevar Bush’s report, “Science, the Endless Frontier” in a short essay titled, "Celebrating the Government-University Partnership's 75th Anniversary."  Notably, in light of the report, she explains how issues with respect to climate change and Covid-19 only highlight why government should continue to invest in university research.  Unfortunately, the Trump Administration continues to push for less funding for research and development at universities in terms of real dollars.  One of the Democratic presidential candidates who consistently appeared to support university research and development was Tom Steyer.  If former Vice President Biden is elected, hopefully he will consider Tom Steyer for a position in Biden's administration.  If President Trump is reelected, I hope he reconsiders his position regarding funding university research and development.  The AAU document provides, in part: 

. . . 

Famously titled “Science, the Endless Frontier,” the influential report had been requested the previous year by then-President Franklin D. Roosevelt, whom Bush served as chief scientific adviser. As World War II increasingly appeared winnable – in no small part due to the scientific research enterprise that Bush’s office led – Roosevelt was looking to the future. He asked the MIT-trained Bush to file a report addressing four questions:

1. “What can be done, consistent with military security, and with the prior approval of the military authorities, to make known to the world as soon as possible the contributions which have been made during our war effort to scientific knowledge?”

2. “With particular reference to the war of science against disease, what can be done now to organize a program for continuing in the future the work which has been done in medicine and related sciences?”

3. “What can the Government do now and in the future to aid research activities by public and private organizations?”

4. “Can an effective program be proposed for discovering and developing scientific talent in American youth so that the continuing future of scientific research in this country may be assured on a level comparable to what has been done during the war?”

Bush took this brief set of questions and delivered an expansive report with recommendations that have informed U.S. science policy ever since. Calling basic scientific research “the pacemaker of technological progress,” Bush recommended a significant and ongoing partnership between the federal government and universities to conduct research to benefit the nation.

Bush’s report noted that government support for basic research could continue to bolster not only the nation’s security, but also its economic prosperity. “New products and new processes do not appear full-grown,” he wrote. “They are founded on new principles and new conceptions, which in turn are painstakingly developed by research in the purest realms of science!”

Bush’s recommendations led to the creation of the National Science Foundation, the National Institutes of Health and other federal agencies. These agencies conducted and funded the research that sent humans to the Moon, gave us the Internet and smartphones, ended polio and a host of other diseases, and made HIV infection manageable -- more akin to diabetes than a death sentence.

I recently participated in a National Academies of Sciences-sponsored symposium exploring the legacy of this important report and forecasting the future of the government-university partnership. As Vannevar Bush realized 75 years ago, wartime is not the only time for the government to invest in the science that makes us safer and more prosperous. Leading scientists, government officials, and academic researchers at the symposium agreed that – as emerging threats like the COVID-19 virus and the climate crisis make clear – the United States should double down on investments in the government-university research partnership. In fact, in a 2018 article I wrote for Change: The Magazine of Higher Learning, I describe in detail how we must continue pressing toward that “Endless Frontier.” Our prosperous and healthy future absolutely depends on vigorously pursuing this journey.

Will the US Government, California and Health Insurers Produce Treatments for Covid-19 for the World?

Neil Wilkof wrote on the IPKat blog today that the Israeli government has essentially issued permits under Israeli law to import generic versions of a drug into Israel for the purpose of treating Covid-19 infected patients despite patents covering that drug in Israel.  Neil notes that there is a dwindling supply of the drug and that the Israeli government is acting quickly to acquire supply.  

Notably, one issue that exists is the production of useful treatments for coronavirus.  Prior to the pandemic, there was already a concern with the lack of production of many generic drugs.  The State of California as well as health insurers are looking into manufacturing generics.  Moreover, the U.S. Congress has legislation before it concerning the federal government’s ability to have generics manufactured on its behalf or to manufacture those generics itself. (Here's a nice list of the US FDA's actions concerning the virus.) Additionally, on Tuesday of this week, President Trump invoked the Defense Production Act.  This Act apparently allows the federal government to direct, to an extent, private industry concerning the production and pricing of items necessary for national defense, in part.  It will be interesting to see if President Trump uses this power to push the manufacture of treatments for coronavirus for the United States, and hopefully, the world, and if California and Congress move fast to produce and incentivize more potential treatments. (If they did, this could lead to the development of much stronger US based generic manufacturing.)

U.S. Department of Energy Grants for Scientific Discovery through Advanced Computing Teams

The U.S. Department of Energy is offering $60 million in grants available to universities, private industry and others to utilize national supercomputers to assist scientific discovery.  The Press Release states: 

Program Will Develop Advanced Computing Tools to Accelerate Discovery

WASHINGTON, D.C.—Today, the U.S. Department of Energy (DOE) announced a plan to provide $60 million to establish multidisciplinary teams to develop new tools and techniques to harness supercomputers for scientific discovery.  

The program, known as SciDAC, or Scientific Discovery through Advanced Computing, brings together experts in computer science and applied mathematics with researchers in specific scientific disciplines to develop new high-performance computing tactics for tackling scientific questions. The aim is to accelerate scientific discovery through the development of powerful new computational tools and techniques for scientific research.

"The Department of Energy is proud to announce our investment into programs that will keep our nation globally competitive when it comes to developing advanced computing tools," said Under Secretary for Science Paul Dabbar. "Through SciDAC, researchers will have access to the Department's computing resources that will lead to discoveries advancing innovation within our scientific community." 

SciDAC is a joint effort among the six major program offices within DOE’s Office of Science. It addresses problems in disciplines including high energy and nuclear physics, condensed matter physics, materials science, chemistry, fusion energy sciences, and Earth systems research. 

Teams, known as “SciDAC Institutes,” are expected to take advantage of DOE Office of Science supercomputing facilities at Argonne, Oak Ridge, and Lawrence Berkeley National Laboratories.

Applications will be open to universities, national laboratories, industry, and nonprofits, with multi-institutional partnerships encouraged. Awards will be selected competitively based on peer review. Total planned funding from the DOE’s Office of Science will be $60 million for five-year projects, with outyear funding contingent on Congressional appropriations.

Letters of intent are required and are due on April 14, 2020 by 5 p.m. Eastern time.  Final applications are due on May 12, 2020 by 5 p.m. Eastern time.  The full text of the Funding Opportunity Announcement, along with a parallel, companion announcement for DOE laboratories, can be found here on the ASCR website.

The Coronavirus Pandemic -- An Opportunity for the BioPharmaceutical Industry?

The Santa Cruz Sentinel (Wow!) has an excellent news article about a Gilead Sciences drug used (in combination with other treatments) to treat the coronavirus, including the attempted patent by the Wuhan Institute of Virology and the China’s Military Medicine Institute of the use of the treatment in China.  The article draws on the expertise of four professors, Ana Santos Rutschman, Lisa Larrimore Ouellette, Mark Cohen and Jacob Sherkow.  On C-Span, several experts from the World Health Organization, have been discussing the coronavirus response.  One expert noted that there are currently 200-300 clinical trials going on right now for treatments for Covid-19. 


The biopharmaceutical industry has certainly taken its lumps in the last few years.  The rising cost of healthcare, partially driven by drug pricing, has put them in the cross-hairs of the public and policy makers.  On different fronts, from drug pricing to competition to patent eligible subject matter, the biopharmaceutical industry has been fighting to protect itself and its business model.  Given the recent history of the biopharmaceutical industry, many may be worried about price gouging by the industry if a treatment is developed.  However, this could be an incredible opportunity for the biopharmaceutical industry to develop treatments and make those treatments available widely for free or a relatively low price.  This could be an opportunity to prove the value of the industry.  If a company develops a treatment, patents the treatment and then gives the treatment away, that would be an incredibly powerful choice and signal to the global public.  Private property rights, the foundation of open source licensing, allow for philanthropy involving those rights—you can choose to give it away--valuable in and of itself.  According to the experts at the WHO on C-Span, there is almost unprecedented sharing with labs around the world concerning the sequence of the genome of the virus as well as the sharing and development of tests of the virus. 

Legislation Introduced to Raise Manufacturing of Active Pharmaceutical Ingredients in the United States

On March 11, 2020, Senators Blackburn and Menendez introduced a bill, Securing America’s Medicine Cabinet, designed to raise the manufacturing of active pharmaceutical ingredients in the United States to stem reliance on China.  The Press Release notes that part of the reason for doing this is concerns with the safety and quality of active pharmaceutical ingredients from China.  The Press Release states: 

Blackburn, Menendez Lead Bipartisan Bill to Increase US Prescription Drug Manufacturing 

WASHINGTON, D.C. – Senators Marsha Blackburn (R-Tenn.) and Bob Menendez (D-N.J.) have introduced the Securing America’s Medicine Cabinet (SAM-C) Act to increase American manufacturing of active pharmaceutical ingredients (APIs), the building blocks of prescription drugs. Currently, only 28% of API-producing facilities are in the United States and the number of Chinese facilities has more than doubled since 2010. “When confronted with a serious challenge such as the corona virus, it is important to take stock, look at lessons learned and build upon them in order to respond better the next time,” said Senator Blackburn. “Currently, we are too reliant on foreign manufacturing of critical APIs. The SAM-C Act is one step on the right path to strengthen our drug supply chain.” “The COVID-19 is a real health emergency and we have to do everything in our power to increase our preparedness and response,” said Senator Menendez. “This bipartisan proposal will do that by encouraging drug manufacturers to partner with our best minds in higher education on new advancements, creating good jobs and increasing the national production of vaccines and drugs that can save lives. With New Jersey’s concentration of pharmaceutical companies and institutes of learning, we can lead the way and make a difference.” The corona virus outbreak has heightened concerns about dependence upon China and India for prescription medications. On February 27, 2020, the FDA announced the shortage of one drug used to treat patients with coronavirus. They attributed the shortage to difficulties obtaining the API from a site in China affected by coronavirus. Additionally, in its 2019 report to Congress, the U.S.-China Economic and Security Review Commission revealed “serious deficiencies in health and safety standards in China’s pharmaceutical sector.” Dependence upon China and others for prescription drugs combined with safety concerns needs to be addressed. This urgent health event provides an impetus to improve our pharmaceutical supply chain. The SAM-C Act will encourage pharmaceutical drug manufacturers to spur innovations similar to those in other industries such as automotive, aerospace and semiconductors and bring drug manufacturing back to the United States, where ingredients and processes can be more easily verified.  The legislation would expand upon the Emerging Technology Program within the Food and Drug Administration to prioritize issues related to national security and critical drug shortages, as well as bring pharmaceutical manufacturing jobs to the United States. In addition, the SAM-C Act authorizes $100 million to develop centers of excellence in advanced pharmaceutical manufacturing in order to develop these innovations as well as train the workforce needed in this industry. These centers will be partnerships between institutes of learning and the private sector.  RELATED Last month, Senator Blackburn wrote about how the coronavirus outbreak exposes the U.S.’s pharma supply chain vulnerability: “Without intervention, the FDA expects the pharmaceutical industry will continue to rely on Chinese companies to make active pharmaceutical ingredients… The status quo has made us vulnerable. The fix, however, is sitting right in front of us.”

Proposed Act on Curbing Anticompetitive Conduct in the United States

On March 10, 2020, former Presidential Candidate and Senator Amy Klobuchar introduced legislation designed to address abuses of market power by basically making it easier to prove violations of the antitrust laws.  The Press Release states, in part: 

The Anticompetitive Exclusionary Conduct Prevention Act would deter anticompetitive abuses that harm consumers and innovation

WASHINGTON – U.S. Senator Amy Klobuchar (D-MN), Ranking Member of the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights, introduced new legislation today to deter anticompetitive abuses that distort the competitive process and harm consumers, innovation, and new business formation. The Anticompetitive Exclusionary Conduct Prevention Act prohibits anticompetitive exclusionary conduct that risks harm to the competitive process. It also makes reforms to improve antitrust enforcement across the board. The bill was cosponsored by Senators Richard Blumenthal (D-CT) and Cory Booker (D-NJ).

“We have a major monopoly problem in this country, which harms consumers and threatens free and fair competition across our economy. Companies need to be put on notice that exclusionary behavior that threatens competition cannot continue,” Klobuchar said. “Our legislation will deter anticompetitive abuses, helping to protect the competitive markets that are critical to ensuring fair prices for products and services, spurring innovation, and preserving opportunity for American entrepreneurs.”

Today’s economy – including key sectors like online commerce, pharmaceuticals, and agriculture – is characterized by growing market concentration and market power. Harmful exclusionary practices by powerful companies threaten free and fair competition, as decades of federal court decisions have chilled enforcement under existing laws. As a result, U.S. enforcement against the anticompetitive conduct of powerful firms has lagged behind efforts in other countries, creating an increased danger of our markets becoming less competitive and of our economy becoming less prosperous.     

Overview Anticompetitive Exclusionary Conduct Prevention Act of 2019:

KEY PROVISIONS

1. Prohibit Anticompetitive Exclusionary Conduct: Amends the Clayton Antitrust Act to prohibit “exclusionary conduct” that presents an “appreciable risk of harming competition.”

1.       Shifts the Burden of Proof so that powerful companies that have a market share of greater than 50% or that otherwise have substantial market power would have to prove that their exclusionary conduct in the markets they dominate does not present an “appreciable risk of harming competition.”

2.       Allows DOJ and FTC to seek substantial civil penalties for violations of up to 15% of total U.S. revenues or 30% of the affected U.S. revenues in addition to other remedies available under the Clayton Act.

2. Eliminate Unnecessary “Market Definition” Requirements: Courts often require claimants to prove a relevant market to establish liability under the antitrust laws, even in the face of clear evidence of competitive harm. The bill clarifies that the antitrust laws do not require definition of a relevant market, unless the statutory language explicitly requires it to resolve the case. 
3. Prevent Courts from Improperly Implying Antitrust Immunities: Courts have implied immunity from the antitrust laws for certain conduct based on the existence of federal regulation, in certain circumstances ignoring statutory savings clauses passed by Congress. This bill limits the ability of courts to imply antitrust immunity for regulated conduct. 

The legislation has the support of leading national consumer welfare and antitrust policy organizations American Antitrust Institute, Consumer Reports, and Public Knowledge.

“AAI supports Senator Klobuchar’s bill to strengthen U.S. law to limit harmful conduct by dominant firms -an area of antitrust that has been largely unenforced for decades,” said Diana L. Moss, President, American Antitrust Institute. “The bill will set forth clear, strong, and needed criteria for policing conduct that is designed to drive rivals from markets. It should garner broad bi-partisan support from members of Congress who seek to protect our markets, competition, consumers, and workers.”

"Senator Klobuchar's bill addresses a key shortcoming in our law. Current antitrust law doesn't apply to a company until it already has a monopoly, or is on the verge of one -even when it has enough market power to sabotage the competitive process,” said George Slover, Senior Policy Counsel, Consumer Reports. “This targeted, measured bill would move the line where it needs to be to address the kinds of anticompetitive abuse we are seeing too much of in today's marketplace. This is particularly important as commerce and communications increasingly take place online, with dominant platforms presenting new challenges to making sure we have a competitive marketplace that works for consumers and for all who seek to reach them." 

“For far too long, antitrust enforcers have been fighting with one hand tied behind their backs. This legislation will revitalize antitrust enforcement in exclusionary conduct cases by sharpening the tools of our antitrust agencies,” said Charlotte Slaiman, Competition Policy Director at Public Knowledge. “We commend this effort to address the problem of exclusionary conduct to ensure these competitive harms do not escape scrutiny.”

The full press release is available, here.  The full proposed legislation is available, here. 

Alliance for Regenerative Medicine: 2019 is Second Best Year in History for Regenerative Medicine Financing

The Alliance for Regenerative Medicine (ARM) has recently released its annual report.  Notably, ARM states that 2019 was the second-best year in history for regenerative medicine financing.  A whopping $9.8 billion US was raised globally.  $7.8 million was raised for gene modified and cell therapy.  Tissue engineering received $442 million.  The report further specifies deals for significant sums as well as public offerings.  The financing numbers are also broken down by type, such as venture capital, with comparison to 2018 and 2017 numbers.  VC financing is up almost a billion dollars in 2019 over 2018.  Financing numbers are also reviewed for the EU and Israel.  The report also specifies that there are 1,066 clinical trials proceeding at the end of 2019.  New approvals and expected approvals are also discussed. 

Another Government Report Tackling Pharmaceutical Pricing in the United States that Takes Aim at Patenting Practices

The State of Minnesota has recently released a 94 page report on drug pricing and access titled, “Report of Minnesota Attorney General’sAdvisory Task Force on Lowering Pharmaceutical Drug Prices.”  The Executive Summary of the very thorough report points to several problems leading to the high cost of pharmaceuticals in the United States and the state of Minnesota, including 1) product hopping; 2) abuse of the patent system, including the creation of patent thickets (with Humira as the example); 3) pharmaceutical benefit manager practices and a lack of transparency with respect to pricing; and 4) pharmaceutical company practices with respect to direct marketing to consumers and price discounts to consumers for selecting brand name drugs.  The report has many recommendations, including the formation of a commission to investigate and deal with pharmaceutical pricing and other issues; importation of four important drugs from a vendor (insulin, epipens, Truvada and Naloxon); create price gouging legislation; “Strengthen Minnesota’s consumer fraud laws;” “Enact a state anti-kick back law;” “Strengthen Minnesota’s antitrust laws;” advocate for change to federal patent and data exclusivity laws; heavily regulate pharmaceutical benefit managers; ensure greater transparency; more utilization of the federal 340B drug pricing program; and improved usage of bulk purchasing.  The report also includes action steps for the various recommendations. The report details the impact of high drug prices on citizens of Minnesota as well as case studies of drug prices that are “excessive.”  

I am sure the issue regarding the cost of healthcare and pharmaceuticals in the United States will receive a lot of attention in U.S. presidential race this year.  Last April, Chris Holman and I co-organized a conference at University of the Pacific, McGeorge School of Law, in Sacramento, California, on pharmaceutical IP and pricing that tackled the issue. The conference website is available, here.  We may offer a follow-up conference next year after the presidential election.  If you have an interest in attending or participating, please let me know.