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Is crown use licensing a loaded threat for pharma?

Words by:
Senior Account Executive
February 15, 2019

The battle between NHS England and American pharmaceutical company Vertex over the cost of the revolutionary cystic fibrosis drug, Orkambi, rages on.

In the latest development, campaign groups are upping the ante, backed in Parliament by Conservative MP Bill Wiggin, by calling for the government to invoke Crown use licensing. This would take the patent for Orkambi from Vertex, allowing it to be manufactured at a lower cost as a generic medicine. Earlier this week, Shadow Health Secretary Jonathan Ashworth took up the mantle, backing the call for the patent to be removed in a direct-to-camera message to Vertex on the BBC’s Victoria Derbyshire Show.

How likely is it that this will happen? In short, not very.

The suggestion to strip a company of its exclusive patent is highly controversial. Crown use licensing has only been used in very rare occasions, such as in cases of emergencies where a patent was not available at all in the UK. It has not been used as a tool to take a drug from a company simply to supply a medicine for a cheaper rate.

While it may feel like a quick fix, it is probable that the process would be very drawn out. The government would have to compensate Vertex, legal battles would likely ensue, and it could take several years before a generic manufacturer would be able to produce the medicine.

Vertex, who have several pipeline drugs for cystic fibrosis, argue that the price of Orkambi is a return on investment for years of ongoing research and development in this sector. Stripping them of the ability to sell profitably in the United Kingdom would, they argue, be highly detrimental to cystic fibrosis patients in the long run who would not benefit from this or future innovative new medicines.

For the wider sector (who are watching the standoff closely), such a bold more would be highly provocative. It would be a damning signal to industry, who already see the UK as a relatively small market on a global scale and could risk the UK’s position as an attractive launch market. Companies may increasingly turn to markets, such as Germany, for their technology appraisal processes and launch. In short, Crown use licensing could lead many to reassess their relationship and ongoing commitment to the UK.

As a single payer, the NHS has negotiated preferential rates for decades, and it is feasible that industry would start to see the UK as a less influential and more volatile market, particularly given the existing pressures created by Brexit.

Invoking crown use licensing would, to put it briefly, appear to directly contradict the sentiment of the Accelerated Access Review and the Life Sciences Sector Deal, both of which promised faster access to innovative treatments.

Who will blink first? It is not clear. But as Vertex gears up to appear in front of the Health and Social Care Select Committee, there is little doubt that tensions need to cool if progress is going to be made.

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