American taxpayers will be Alex Azar’s shareholders — let’s hope he can serve them

As the Senate considers Alex Azar, former drug company executive and lobbyist, to lead the Department of Health and Human Services, the crucial question will be whether Azar is able to advocate for the interests of the public in the same way that he advocated for the interests of Eli Lilly’s investors.

In the public outrage and debate over high drug prices, policymakers often fail to acknowledge the fact that U.S. taxpayers are the largest investors into biomedical research and development. From discoveries in the labs of the National Institutes of Health to university research financed by federal grants, the public has an extensive financial interest in a wide range of medical technologies.

{mosads}Laws exist which are intended to protect the public’s investment. After an initial discovery is made, the federal agency, university, or biotech firm which owns the patent may decide to license it to a larger manufacturer who will be responsible for clinical development and bringing the drug to market.

When the research which led to this patent was publicly funded, however, the law stipulates that the licensee is responsible for making the “benefits of the invention”, or the drug created, “available to the public on reasonable terms.”

In practice, HHS has consistently failed to enforce this rule. The result is not only that United States citizens pay the highest prices in the world for medicines, but that they’re going bankrupt to pay for medicines they technically already own.

Take the case of Zinbryta, an MS drug marketed by Biogen and AbbVie. The patent on Zinbryta is owned by the federal government, but licensed out to the private companies. These pharmaceutical companies charge Americans $7,390 for a one month supply, a price two to four times higher than every other high income country.

The government maintains rights in any drug developed with federal funds, even when it does not own the patent. Probuphine, a highly effective medication assisted treatment for opioid dependence, is protected by one patent for a discovery made in the course of research financed by the National Institute of Mental Health.

Despite the fact that the government has rights in this treatment, the cost to patients can be $4,000 to $6,000 for a six month supply. The result is that the medication remains inaccessible to patients without insurance, while many insurance companies fail to cover Probuphine as a first line treatment.

The case is similar for Spinraza, the $750,000 treatment for spinal muscular atrophy, Kymerah, the $475,000 treatment for B-cell acute lymphoblastic leukemia, and Xtandi, a medicine for prostate cancer which costs more than $380 a day in the US but only $80 to $144 a day in other wealthy countries. For all of these drugs, U.S. taxpayers have invested in their development and have rights in the patents on these treatments. Will Alex Azar use his authority as the Secretary of HHS to protect the interests of U.S. taxpayers and lower drug prices?

The requirement in the Bayh-Dole Act is that the prices be “reasonable.” Senators should ask Azar if it is “reasonable” to charge Americans the highest prices in the world for drugs which were developed with public funding.

High drug prices benefited Eli Lilly’s investors while Alex Azar was an executive with the company. We can only hope that if confirmed, Azar will work for the benefit of taxpayers that have invested in these drugs as effectively as he worked for wealthy shareholders.

American taxpayers will be Azar’s shareholders now, and it is now up to their elected representatives to determine whether he is able to serve this group.

Kim Treanor works in research and communications at Knowledge Ecology International, a not-for-profit organization that advocates for access to medicines at affordable prices.