Astellas Evades Attacks on Cancer Drug Price as Critics Regroup

Pharmaceutical industry watchers are split on whether Astellas Pharma’s Xtandi will continue to be targeted by attempts to lower drug prices following the prostate cancer treatment’s absence on the Biden administration’s list of drugs subject to Medicare negotiations.

Xtandi has long been a costly drug for Medicare. In 2020, the agency’s Part D program spent $2 billion on the Astellas drug. Thus, when the Biden administration in August unveiled the list of drugs up for Medicare pricing negotiations, analysts, industry insiders, and Astellas itself were shocked. Astellas had sued the HHS to stop the program.

Lawmakers and other critics of drug industry behavior say the US price of the drug is too high—without insurance, the retail price could come out to over $13,000 a month—and that the government should take steps to bring the cost more in line with what other countries pay. They point out that grants provided by the US government were used in the development of innovations behind several patents on the drug, the rights to which were granted to the University of California.

“It’s outrageous that Astellas is shamelessly profiteering off of Xtandi—forcing Americans to pay up to six times more for a drug that U.S. taxpayers helped to develop and then suing in bad faith to stop Medicare negotiation, only to drop the case once Xtandi was excluded from negotiation,” Sen. Elizabeth Warren (D-Mass.) said in a statement to Bloomberg Law.

Warren is among several senators who have pressured the Biden administration to use its authorization, known as march-in rights, to lower Xtandi’s price.

Several petitions have been submitted to—and rejected by—the federal government urging it to exercise its right to “march in,” seize Astellas’ patents on Xtandi, and license them to produce lower-cost generic versions. One of those petitions is on appeal with the Health and Human Services Department. HHS Secretary Xavier Becerra previously noted his openness to deploying the march-in process.

The HHS’ National Institutes of Health, which received the march-in requests, said the agency has no update on the status of the most recent rejection.

Xtandi could still be in the crosshairs for cost-control efforts but time may be running out, those for and against government intervention in drug prices say.

Industry insiders say that while the drug could end up on Medicare’s 2024 list of drugs for negotiations, lower prices wouldn’t take effect until 2027. By then, Xtandi patents could expire, which experts say could ease the way for lower-cost copycat drugs to enter the market, meaning savings from negotiations could be limited.

Caution on March-In Rights

Though agency actions and guidance indicate an openness to exercising march-in rights, the Biden administration has yet to take that step to claim a drug company’s patents.

Lawmakers, activists, and state attorneys general have pushed for march-in rights to be used as a cost-control measure.

But Joseph Allen, executive director of the scientific and research organization group the Bayh-Dole Coalition, said that’s not quite how the law works.

That’s “neither sanctioned by the law nor reality,” said Allen, a former congressional staffer involved in the passage of the Bayh-Dole Act, the law that created march-in rights.

Under the Bayh-Dole Act, the government can “march in” and relicense an invention if the government helped fund the invention’s research and development.

Among the triggers for marching in are whether the patents resulted in an actual product and whether the government needs the intellectual property to address an unmet health or safety need, Allen said. Price controls are not part of that list, he said.

The Biden administration’s last rejection of a march-in petition on Xtandi, Allen said, was “actually one of the strongest, saying you can’t march-in on a successful commercialized product because you don’t like the price.”

Becerra has said he wouldn’t entirely rule out using march-in rights as a vehicle for lowering drug costs. In 2021, the HHS put out a report identifying march-in as one of many levers at the government’s disposal for price control.

But Becerra has “backtracked a little,” said Tahir Amin, CEO of the nonprofit Initiative for Medicines, Access & Knowledge, or I-MAK.

In March the National Institutes of Health rejected a petition to march in and force lower prices for Xtandi. Yet at the same time, the HHS and the Commerce Department also said they would review march-in authority.

Astellas Responds

Bloomberg Law reached out to Astellas for comment, and the company pointed to several statements it had issued on march-in rights and Medicare negotiations.

“A drug’s list price does not reflect the amount most patients will pay for their prescription medication,” Astellas argued in one of the statements.

In addition, it said, “References to the wholesale acquisition cost (WAC) and average wholesale price (AWP) are misleading reflections of what most purchasers and patients pay for XTANDI. WAC and AWP also do not account for rebates that manufacturers individually negotiate with insurance companies.”

In April, the drugmaker decried march-in as a means for controlling costs, while voicing support for pharmacy benefit manager and insurer reforms and noting its dedication to working with lawmakers and others on policy solutions for prices.

The NIH’s rejection of the prior-march in petition “reinforces NIH’s consistently held position that invoking the Bayh-Dole Act’s ‘march-in’ rights authority is not an appropriate means to control prescription drug prices,” a company spokesperson said in one of the statements.

“XTANDI is widely available among advanced prostate cancer patients in the U.S. and is a good example of how innovation and collaboration between early-stage public research and private development can benefit American consumers,” the spokesperson said.

The administration’s decision to exclude Xtandi from the list of the first 10 drugs to be negotiated under Medicare was a surprise.

“Quite honestly, probably would have been easier for them to put it on there,” said a drug industry leader, who spoke on the condition that they not be identified.

It would be an easy thing to say to pro-price control lawmakers, “we rejected the march-in, sure. But it’s on the negotiation list. So you’re kind of getting what you want anyway,” said the drug industry source.

Other Options

Lawmakers and advocates continue to urge the Biden administration to broaden its scope into march-in use and beyond. They say the government has other levers available to lower prices for Xtandi and other drugs.

“I’ve long called on the Biden administration to use its authority to lower the price of Xtandi and stop Astellas from price-gouging patients—and it’s time for the administration to deliver,” Warren said.

Meanwhile, the drug industry leader noted the “issue du jour” around lowering costs has shifted a bit away from march-in.

One example is section 35 U.S. Code 202, under which the government retains the right for royalty-free use of a government-backed invention. Steve Knievel, advocate for Public Citizen’s Access to Medicines program, said Public Citizen has raised this as a possibility with the administration, as it would allow them to avoid march-in in proceedings to authorize a generic. Public Citizen advocated in support of march-in petitions against Xtandi.

Another option frequently floated is 28 U.S. Code 1498, a section of the law designed to shield federal contractors when infringing patents for government benefit. In this case, that could mean the government authorizing a generic manufacturer to copy a high-cost drug.

Most favored nation pricing—or tying a drug’s cost to another country’s lower price—has also been suggested.

“When you look at drug pricing, when you look at the world of advocacy around it, there are many entry points. There’s no sort of silver bullet,” Amin said.