Between 1968 and 1977 the National Institutes of Health spent $7 million on the discovery and development of cisplatin, a drug that proved dramatically successful in fighting certain kinds of cancer.
Cisplatin also has been dramatically successful as a business proposition. The patent management agent of Michigan State University, where the drug was developed, awarded Bristol-Myers Co. an exclusive license to market the drug in 1978. Since then, under the name Platinol, the drug has produced $150 million in sales for the company and has become the best-selling cancer drug in this country.
Now Bristol-Myers' license is up for renewal. And because the Health and Human Services Department provided the money that led to the invention of the drug, it has the right to decide whether the firm's monopoly should continue through 1990, or whether six other competitors should get a piece of the action.
This marks the first time since new patent rights legislation was passed in 1980 that the government has had to to decide how long a company should be rewarded for developing a tax-sponsored invention.
The decision, due later this year, could alter the uneasy balance between the socialist-type system that supports scientific research in this country (the federal government provided an estimated two-thirds of the $9.33 billion spent on basic research here last year) and the capitalist incentives used to get inventions on the market. In this case, getting the invention on the market also meant saving lives.
After years of inconsistencies between the patent policies of different agencies, Congress passed legislation in 1980, clarifying the rights of universities, nonprofit groups and small businesses to hold title to tax-supported inventions.
Drafted in part by Norman Latker, the same federal patent attorney who wrote the patent agreement with Michigan State for cisplatin, the law effectively ensured that the inventions would be turned over to the private sector.
While the government can make a product for its own use, under the law a university retains title to its tax-supported inventions. It can offer a general license to companies to market the invention or, for a limited period, an exclusive one.
This year President Reagan issued an executive order giving all government contractors the same rights universities and small businesses gained in 1980.
When the period of exclusivity--usually five years--ends, the government must decide whether the monopoly should be continued. In cisplatin's case, Research Corp., Michigan State's patent management agent, has asked HHS to extend Bristol-Myers' monopoly through 1990. Bristol-Myers and its allies say that if the firm loses its monopoly, other private firms will hesitate to take risks on unproven products. Inventions in fields as diverse as laser technology and genetic engineering could be left on the shelf, they say.
Foes argue that incentive is fine, but at some point the government must recognize that competition produces better, cheaper products. "The question is not whether Bristol should get an exclusive license but how long it should have it," said Davis R. Reese of Elkins-Sinn, one firm vying for the patent license.
An NIH committee of doctors and attorneys hopes to make a recommendation on cisplatin's future to HHS later this month. The committee met yesterday and will probably meet again before making a recommendation to HHS assistant secretary Edward N. Brandt, according to Dr. Saul Schepartz, its chairman.
"We have to evaluate the factors for or against opening up the patent," said Schepartz. "What are the potential other uses? What incentives are necessary to develop the drug for other uses? What are the cost factors for the patient?"
Bristol-Myers said it believes that the drug, now approved for treating testicular, ovarian and bladder cancer, shows promise as a therapy for cervical, prostate and some lung cancers. Some 23,000 cancer victims now use the drug, but the firm estimates that nine times that number could be treated if the new applications work. But if competition forces down the price of the drug, Bristol-Myers argues, it may not be worth it to the company to invest millions in research on new uses.
Six other manufacturing firms are vying for the license, including Stuart Pharmaceuticals, a subsidiary of the British-owned ICI Americas Inc., Adria Labs Inc. and Ellis-Sinn, a subsidiary of A.H. Robbins Co. Most agree the drug's price would drop in a competitive market, but some have pledged to initiate research into new uses of cisplatin.
Sen. Joseph R. Biden Jr. (D-Del.), writing on behalf of Adria and ICI, told the NIH: "A further period of monopolistic profits to be exacted from the unfortunate victims of cancer is too high a price to pay when others are waiting . . . to compete in the development and marketing of this product."
Research Corp., a nonprofit foundation that manages the patents of about 285 universities, solicited buyers for the cisplatin license in the late 1960s and early 1970s, but the drug produced little interest because of its severe side effects. When NIH research found a way to mitigate the side effects, three companies, including Adria and Bristol, expressed interest in acquiring rights.
According to a Research Corp. official, none would agree to market the drug under a non-exclusive arrangement. After studying the three proposals, Research Corp. selected Bristol.
Industry analyst David F. Saks of the investment banking firm of A.G. Becker noted that when an exclusive license is lost the firm that held the monopoly usually continues to control the market.
Alan R. Bennett, an attorney for Bristol, disagreed. Patients, he said, don't buy cancer drugs directly, hospital pharmacies do. And pharmacists look only for the cheapest product. If the other firms invest little in research, they can undercut Bristol, he said.
Various major research universities, including 120 represented by the Council on Governmental Relations, support Bristol. " . . . Extension of exclusivity would appear to be the only way to insure a timely commitment to further research and development necessary to benefit many more patients," the council wrote HHS. "This decision is a new procedure--everyone's groping," said George M. Stadler, executive vice president of Research Corp. "It's an interesting dilemma."
Said NIH's Schepartz: "We have to make an overall judgment based on what is best for the cancer patient population."