Pfizer’s decision to not disclose its internal data showing the potential for its rheumatoid arthritis treatment Enbrel to prevent or slow the progression of Alzheimer’s disease has generated a vigorous debate about the obligations of pharmaceutical companies to the public.

Pfizer says its decision was guided by scientific uncertainty, but the decision was also likely influenced by the cost of running a study necessary to receive FDA approval for this new indication. Additionally, the looming expiration of the patent made further investment in the drug unfavorable.

So what does a pharmaceutical company owe the public when it has information about a potential treatment, but cannot profit off the discovery?

The Pfizer situation makes clear that there should be some place for potentially beneficial data to go when a drug company cannot justify the monetary investment in pursuing it further. Such a place needs the extensive scientific infrastructure to conduct large scale studies, analyze data, and present results to the public. That place may very well be the National Institutes of Health. Pharmaceutical companies should be able to “donate” data to the NIH for further development when the company chooses not to pursue the work on its own.

NIH Is Lifeblood for Pharma

The NIH already is the lifeblood of the pharmaceutical industry. A study published in the Proceedings of the National Academy of Sciences reported that NIH funding was “associated with every one of the 210 new drugs approved by the [FDA] from 2010–2016.” NIH grants and funding supports research at universities or institutes that identify receptors, drug targets, or early drug research.

But the NIH rarely receives royalties directly back when those discoveries lead to commercialized products, some that generate billions in revenue. The investment in the NIH by the public has huge financial rewards for the pharmaceutical industry, but could also provide more direct benefit to the public through the development of FDA-approved treatments.

The system could make sense financially for both the NIH and donor company. If, after further development and testing, the data results in a viable treatment, then the NIH should allow the drug to be manufactured and marketed by drug companies—at a price set by the NIH—and share a royalty stream between the donor and the NIH. A few successful treatments would be sufficient to recoup costs by the NIH, and provide an additional revenue stream for further scientific research into improving the health of the nation.

Contracts Would Enhance Public Health

The federal government already allows private manufacturers to contract with the government to produce stockpiles of drugs needed to respond to biological, chemical, or nuclear attack. And legislators, like Sen. Warren, have previously proposed allowing the government to manufacture generic drugs itself, or through contracts with manufacturers. Extending this premise to treatments that would otherwise not be pursued can greatly enhance the public health.

A government development program directly addresses the reasons that a company like Pfizer might choose to not to pursue a potential treatment. First, the time needed to set up and run a large-scale study to prove the efficacy of a new indication may be longer than the time remaining on existing patents. Any gap in time without patent coverage would allow generic competition, and so make recouping the additional cost more difficult. Allowing a company to confidentially donate this type of data would allow the NIH to pursue the studies, and provide benefits to the public.

Second, in rare circumstances, the FDA’s policy to encourage generic competition—which saved Americans $293 billion in 2018 alone—and lower costs can discourage the development of new uses discovered late in a product’s life cycle. The proposed solution above would allow drug companies to donate these discoveries to the public in those situations where the timing of a discovery would not allow for sufficient time for commercialization before generic competition comes to market.

Third, some newly discovered uses for older drugs simply fall outside the specialty of the drug company conducting the research. A company focused on developing and marketing treatments for rheumatoid arthritis may lack the expertise needed to pursue the development of treatments in other areas. In situations where a company finds uses outside its strategic focus or expertise, working with the government may provide a useful partnership to create revenue without losing control over confidential information.

Ultimately, allowing the government, through the NIH, to take on a research and development role for some products can be a way for pharmaceutical companies to responsibly disclose potentially positive data and promote the benefit of the public.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Kevin Nelson, an intellectual property partner at Schiff Hardin, focuses on his practice on patent litigation. He represents pharmaceutical clients in Hatch-Waxman matters and routinely counsels clients on navigating the legal and regulatory pathways for biosimilars.

Joel Wallace is an intellectual property partner at Schiff Hardin. His practice focuses on patent and trademark litigation across a range of industries including pharmaceuticals, medical devices and consumer goods and services.