The Story of Xtandi
Each underlined sentence links to further readings on relevant topics. Sorry for how rough it is, I will be making improvements throughout the next couple days. -Kayla
Have you ever heard of the quote “Financial ruin for medical bills is almost exclusively an American disease”? It must be patently clear how incorrect this statement is for those of you with global health experience. If the disease in this quote refers to the $3 trillion, or 17% of GDP we spent last year on healthcare in the US, this disease is certainly not exclusively American. If it is, it must be a contagious one because it has been spreading. The story Xtandi is another example of how the high cost of US healthcare raises the healthcare cost of everywhere else in the world.
Xtandi was developed here at UCLA. It was our proud example of how bench invention leads to drug creation that saves lives. Funded by the NIH, a group of talented researchers successfully synthesized a compound that’s very effective in treating metastatic prostate cancer. This compound is now sold under the name Xtandi
The next part of the story is not unique. Patents of many novel drugs developed at universities, whether government-funded or privately funded are often sold to pharmaceutical companies after its creation. 1, Because Big Pharma is believed to be efficient at clinical trials and pushing drugs to market. 2, because universities could actualize earlier return and avoid risks associated with the volatility of the pharmaceutical market.
UCLA chose to license the patents to Medivation, a SF based biotech firm, who then collaborated with Astellas Pharmaceuticals, a Japanese drugmaker, to complete Xtandi’s clinical trials and put Xtandi for sales. Last March, UCLA sold its royalty interest- that means future profit on the patents, to Royalty Pharma for $1.14 billion. Medivation was later acquired by Pfizer. (Read even more about this acquisition.) So now Pfizer, Astellas and Royalty Pharma are the three companies who profit from Xtandi.
And how was the profit?
The profit was good. Xtandi costs $129,000 per year. The average treatment period is 8 months. So that is $296 /d. It is a lot cheaper in countries where their medical system is able to negotiate better prices ($ 39,000 in Japan & Sweden, $ 30,000 in Canada). But it is still very expensive relative to their income level. In India it costs about $180 a day, when its average patients make only $4/d. Is such a price necessary to recuperate the cost of developing this drug? Well, Prostate cancer is the second most common cancer among men worldwide. Xtandi’s net sales in its first year was around $2.2 billion, it’s sales in 2022 is projected to be $4.71 billion, ranking top ten in all drug sales.
And don’t forget, Xtandi was from the beginning created from federal funding, yet its price is so unreasonably high. Many, including Bernie Sanders have called for the government to override its patent. That didn’t happen, the Pharma still holds Xtandi’s patent in the US, but not in India. India rejected its patent application in 2016 on the grounds of “obviousness and lack of patentable invention”.
It’s not the first time India dared to reject patents for a blockbuster drug. In a 15 yr long patent battle over Gleevec, India’s Supreme Court eventually upheld its decision to reject its patent, on similar ground as Xtandi. It’s not hard to fathom why India has a high bar for a drug to be qualified as patentable. India has the world’s biggest generics industry. It also has growing demands for medicine but very limited consuming power.
So its rejection of Xtandi’s patent could allow other generic drug competitors to bring the cost down. In a way, it aligns well with UCLA’s public benefit mission where it is stated in UCLA’s licensing guideline that it pledges to pursue patents only in those developed countries which can afford it and to not seek patent protection in developing countries. Yet contrary to its own guideline, UCLA challenged the patent decision in the Delhi High Court in this patent lawsuit case. More than 50 health watchers all have urged UCLA to drop the patent claim in India.
In patent controversies, a strongly ingrained belief is often brought up which is that “without patents, companies wouldn’t have the incentive to bring a medicine to market”. It is referring to the high risk and cost associated with drug development.
But what exactly is the risk and how much does it cost to make a drug?
Research has shown that the most risky part of drug development, which is novel drug creation is mostly funded by government money. Every year $30 billion goes into research through the NIH. Then what is the cost after a drug is created? Doctors without borders did a very interesting experiment. What they found is that, many valuable drugs were not put to market after creation because the Pharma doesn’t deem them profitable. One example is an effective vaccine for Ebola virus created long before its 2014 epidemics. So Doctors without Borders created a non-profit pharmaceutical company called Drugs for Neglected Disease Initiative (DNDI) where they develop drugs for diseases that afflict the poor most, that the Pharma has turned its back to. To create seven drugs, with 30 more in testing, DNDI has spent under $300 million. Now let’s give it a conservative clinical trial success rate of 7%, that means for every 14 drugs made, only one can make it to the market, then the avg cost of making a drug is around 6 million. Far lower than what the Pharma has claimed which is $2.5 billion/drug. In reality, pharmaceutical companies devotes more in marketing rather than R&D.
Our current political climate is allowing pharmaceuticals so much power that they are able to arbitrarily keep the cost of life saving, tax-funded drugs up. Do you still remember the infamous price gouging on EpiPen two years ago? In the eco-system of medicine, pharmaceuticals can be the most vicious predator while the patients the most vulnerable prey.
Politicians in DC have made it so that 1) it is legal for the private industry to own patent on drugs that are publically funded, 2) when drugs are priced unreasonably high, the government rarely interves, 3) Americans can’t buy drugs lawfully in other countries, and 4) Medicare, the nation’s biggest drug purchaser is not allowed to negotiate lower prices with pharmaceutical companies. I can’t imagine a system created more in favor of the big pharma.
Are we powerless as health advocates?
No, just two years ago, students and faculty member at Hopkins were able to successfully pressure the university to enter its groundbreaking Tuberculosis drugs into Medicine Patent Pool to ensure the drugs are accessible to the most the vulnerable population instead of giving exclusive licensing rights to the industry. So perhaps the fate of Xtandi is in our hands, we can still raise more awareness, we can raise our dissent in the board of regents meeting this March at UCLA, we can actively participate in University’s patent decision and become a close supervisor to ensure that our universities act in accordance to its public interest mission. If you are inspired to take actions in the case of Xtandi, please fill out this google form or email me at kaylagu92@gmail.com. Thank you.
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