ACTG Complexities

A number of pharmaceutical companies view the process of working through the ACTG as cumbersome, bureaucratic, and inflexible. This has led some companies to conclude that they can develop candidate drugs more quickly on their own than through government partnerships. Another particularly divisive issue for industry is the question of sponsor access to data in ongoing clinical trials. Some in industry argue that since NIH staff are allowed early access to data without apparently threatening the successful completion of studies, there should be a way to permit senior executives of pharmaceutical companies to have interim access to data as well. Although such preliminary or early examinations of data should not be permitted to affect the conduct of the clinical trials, some in industry consider it important for sponsors to be aware of these data for long-term operational and financial planning purposes.

CRADA Negotiations

Industry also considers the process of establishing CRADAs to be lengthy, complex, and inefficient. Negotiating the agreements and achieving final approval entails several layers of review and involves numerous government officials and technical or CRADA committees. The process typically takes about a year, which many investigators believe is far too long to advance innovative research. Indeed, many NIH and industry collaborators are frustrated by this unwieldy process and view it as a disincentive to continued participation in the NIH CRADA program.22

OVERCOMING OBSTACLES TO COLLABORATION AND PROMOTING HIV DRUG DEVELOPMENT23

Pharmaceutical executives and government officials are committed to improving collaborative research efforts. Both groups also believe that the relationships must be as clear, consistent, and stable as possible. Industry representatives stress that if collaborations are often subject to future revisions or added expectations from other parts of government or new political leadership, engaging in collaborative research will be seen as a poor business decision because of the many uncertainties involved.

22  

Seenote 17.

23  

This section is based on material presented by Martin Delaney, David Barry, Anthony Fauci, Timothy Westmoreland, David Schulke, Patrick Gage, and Peter Barton Hutt.



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Government and Industry Collaboration in AIDS Drug Development: Summary of a Workshop Held on May 6, 1994 ACTG Complexities A number of pharmaceutical companies view the process of working through the ACTG as cumbersome, bureaucratic, and inflexible. This has led some companies to conclude that they can develop candidate drugs more quickly on their own than through government partnerships. Another particularly divisive issue for industry is the question of sponsor access to data in ongoing clinical trials. Some in industry argue that since NIH staff are allowed early access to data without apparently threatening the successful completion of studies, there should be a way to permit senior executives of pharmaceutical companies to have interim access to data as well. Although such preliminary or early examinations of data should not be permitted to affect the conduct of the clinical trials, some in industry consider it important for sponsors to be aware of these data for long-term operational and financial planning purposes. CRADA Negotiations Industry also considers the process of establishing CRADAs to be lengthy, complex, and inefficient. Negotiating the agreements and achieving final approval entails several layers of review and involves numerous government officials and technical or CRADA committees. The process typically takes about a year, which many investigators believe is far too long to advance innovative research. Indeed, many NIH and industry collaborators are frustrated by this unwieldy process and view it as a disincentive to continued participation in the NIH CRADA program.22 OVERCOMING OBSTACLES TO COLLABORATION AND PROMOTING HIV DRUG DEVELOPMENT23 Pharmaceutical executives and government officials are committed to improving collaborative research efforts. Both groups also believe that the relationships must be as clear, consistent, and stable as possible. Industry representatives stress that if collaborations are often subject to future revisions or added expectations from other parts of government or new political leadership, engaging in collaborative research will be seen as a poor business decision because of the many uncertainties involved. 22   Seenote 17. 23   This section is based on material presented by Martin Delaney, David Barry, Anthony Fauci, Timothy Westmoreland, David Schulke, Patrick Gage, and Peter Barton Hutt.

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Government and Industry Collaboration in AIDS Drug Development: Summary of a Workshop Held on May 6, 1994 Workshop participants offered a variety of proposals for eliminating or reducing the obstacles seen as thwarting collaborative HIV research. Foremost, they identified alternative approaches to NIH's “reasonable pricing” provisions and methods of assigning intellectual property rights, and they examined options that can be used to deal with several operational impediments. They also surveyed the political landscape of government and industry collaboration, focusing particularly on the issue of “reasonable pricing.” “Reasonable Pricing” Considerations Pharmaceutical executives argue that NIH should simply remove the “reasonable pricing” clauses from all CRADAs. At a minimum, they say, NIH could eliminate the pricing provisions in HIV/AIDS research collaborations as a test case and monitor the number and products of collaborative research projects that result. Industry believes that a likely outcome of this approach would be an acceleration of HIV drug and vaccine development. Because the “reasonable pricing” clause was inserted into NIH agreements by administrative discretion, industry representatives maintain that the clause could be similarly deleted. Government officials state, however, that NIH can do this only if there is public and congressional support. To address concerns about gaining access to promising new therapies that are developed through collaborations, NIH could require pharmaceutical companies to enter into contractual agreements stipulating that no patients who need important drugs would be denied access to them because of an inability to pay. Many companies already have special patient access programs through which needed drugs, once approved for marketing, are provided to individuals who are unable to afford them. The principal difference would be to make such agreements formal and required. Consumer representatives caution, however, that this approach may still exclude some people, for instance, those who are not sufficiently impoverished to meet the standard set for special access provisions but who are unable to pay for the drug on their own without incurring significant financial hardship. Government also could increase the use and perhaps size of royalty payments. For example, in exchange for an exclusive license, the industry partner could pay the government a negotiated royalty on product sales, which would be determined in advance and thus would be predictable and could be factored into the company's financial planning calculations and marketing decisions. Several workshop participants expressed concern, however, that royalties might in fact increase the cost of a drug because they may be added to the market price. They also questioned how the royalty would ultimately be calculated. To address pricing concerns and to achieve broad access to cooperatively developed drugs, some combination of these options may be required. Both

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Government and Industry Collaboration in AIDS Drug Development: Summary of a Workshop Held on May 6, 1994 industry and government representatives expressed their readiness to negotiate agreeable and swift solutions. To this end, NIH recently assembled representatives from industry, academia, and the federal government at a July 1994 forum to advise the director of NIH on ways to improve the negotiation, execution, and implementation of CRADAs. Intellectual Property Rights Because patents are a keystone of the pharmaceutical industry, its representatives propose that both CRADAs and CTAs should automatically guarantee prospective property rights or licenses to industrial partners. Companies receiving patents would pay the government appropriate royalties agreed upon in advance. Some industry and government representatives suggest that this solution should be accomplished through legislation to insulate the policy mandate from being buffeted by the winds of political change. Others say that although legislation may be welcome, existing contract law may offer more immediate relief. If permitted administratively, NIH and companies entering into CTAs could contractually agree to the automatic flow of property rights to the industrial collaborator. Contracts also offer a solution in cases in which clinical trials involving drugs developed by industry are conducted through universities. The Bayh-Dole Act now requires the federal government to assign to universities the patent rights to most intellectual property arising from government-funded research. However, such follow-on inventions might be handled contractually by stipulating that the university, as a condition of engaging in the clinical trial, would agree to grant the industrial partner a license and would receive a specified royalty in return. As a model of the potential value of using contract law to settle patent rights, industry representatives cited the success of the Intercompany Collaboration for AIDS Drug Development (ICC). Sixteen pharmaceutical companies, ordinarily competitors that closely guard their intellectual property, have joined together under a cooperative contract to conduct collaborative research on anti-HIV drugs. A representative from one of the participating companies stated that under the ICC agreement each company retains proprietary rights to its compound. The companies completed their contractual agreements in about 6 weeks, which industry contrasts to the lengthy negotiations typically required in government collaborations. ACTG Reorganization and Management Although industry's experience with the ACTG has often been frustratingly slow and cumbersome, most companies recognize that the ACTG can play an

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Government and Industry Collaboration in AIDS Drug Development: Summary of a Workshop Held on May 6, 1994 important and otherwise neglected role in helping define standards for HIV-related care and the optimum ways for using approved drugs to treat HIV disease and its associated conditions. NIH officials involved with the ACTG report that the recent reorganization and reform of the group are intended to place a heavy emphasis on improved efficiency and management and thus should address many of industry 's concerns about its responsiveness. In addition, NIH and ACTG researchers want to address industry's interest in gaining early access to clinical trial data, comparable to the access available to NIH staff. Industry and NIH representatives identified several key components of a possible resolution to this concern. First, all participants need to clearly identify the types of study data to which access should be limited to protect study integrity and quality. Second, companies must make a clear and convincing argument for gaining access to specific data and develop ways to safeguard the integrity of a study if such access is granted. Finally, government in turn needs to recognize and accept the role that access to these data plays in the corporate planning process and find ways to either accommodate necessary access or develop and adhere to a more consistent policy that similarly limits access by NIH staff. Streamlining the CRADA Process NIH also recognizes the need to simplify, clarify, and accelerate the negotiation process involved in developing CRADAs, and officials reported that a streamlined review and approval process for NIH CRADAs should be in place shortly. One suggestion is that NIH should assign additional staff members or establish a centralized committee to monitor and coordinate negotiations. A centralized committee, it was proposed, could eliminate the need for multiple levels of review by providing a single site for negotiating and approving CRADAs. Streamlining the CRADA process will allow this type of collaborative research to better keep pace with a steadily changing commercial and scientific environment. Political Overview Congress seeks to reconcile the need to stimulate and support pharmaceutical research and development with the public's need for access to innovative drugs. Many congressional representatives believe they are protecting the public's interest in asserting the right to require “reasonable pricing” when a product is developed (at least partially) in collaboration with government at taxpayer expense.

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Government and Industry Collaboration in AIDS Drug Development: Summary of a Workshop Held on May 6, 1994 Members of Congress have proposed, or are in the process of proposing, several legislative initiatives. Among them, Representative Ron Wyden has offered a twofold approach. One step would establish an enforcement mechanism for negotiating “reasonable prices” for products resulting from CRADAs or NIH grants to private research institutions and universities. A second measure, designed to create incentives for industry to collaborate with government in clinical research, would authorize NIH to enter into CTAs with companies and would stipulate up front that the institutes will not claim intellectual property rights or assert “reasonable pricing” provisions for products that result from the collaborations. Although industry representatives supported the proposal to eliminate the possibility of pricing considerations in CTAs, they questioned the basis for attaching “reasonable pricing” clauses to all CRADAs. Workshop participants agreed that differentiation among the various types of CRADAs is important with respect to application of “reasonable pricing” considerations. Although some CRADAs include a critically important invention or intellectual contribution from government, others involve situations in which government acts more like a contractor than an inventor, providing little more than screening techniques or other testing procedures. Thus, industry maintains that it is critical to avoid regulations or requirements that would assume similar major government contributions and rights in all CRADAs. Instead, the rights of government should be commensurate with its actual contributions. For example, in collaborations in which government has had a minimal role in developing a pharmaceutical product (i.e., a company discovers and patents a drug, but then brings it to government for additional screening or clinical evaluation), “reasonable pricing” provisions are less defensible. Industry executives argued that a broad, generic assertion of government rights or involvement in pricing decisions is likely to discourage industry from entering into such research collaborations. Indeed, some companies have already cited pricing clauses as the reason for their refusal to participate in CRADAs.24 The message, then, is that NIH and industry must find ways to work together to resolve pricing concerns in ways that reduce industry 's anxiety about achieving a sufficient return on investment and allow government to protect public interests. Congressional staff cautioned that continued failure to achieve practical and mutually agreeable solutions could lead to unilateral action by Congress. If the majority of pharmaceutical companies object to congressional solutions, some observers predict that research collaborations and, in particular, investments in HIV drug development will diminish. Because many companies view HIV drug research and development as an inherently risky venture, further erosion of an already fragile research enterprise could hamper efforts to develop more effective treatments for HIV infection and AIDS. 24   Seenote 17.