By Lisa Larrimore Ouellette, Nicholson Price, Rachel Sachs, and Jacob Sherkow
One of the dizzying stream of innovation and health law stories to emerge last week is Oracle’s partnership with the White House to study unproven pharmaceuticals for treating COVID-19. We decided to unpack this story for ourselves and then to collectively share our thoughts in a short explainer.
What are the drugs being studied?
The initial stories about Oracle’s platform mention its use for two older drugs approved to treat malaria—chloroquine and hydroxychloroquine—that are now being tested to treat COVID-19. Both drugs are quite old: chloroquine was first approved by the FDA in 1949 and sold, until recently, under the brand name Aralen. Hydroxychloroquine, which is also used to treat lupus and rheumatoid arthritis, is sold under the brand Plaquenil and was first approved in 1955.
The impetus behind studying these two drugs stems from in vitro studies following the 2005 SARS-CoV-1 outbreak. Those studies suggested the drugs could inhibit some types of coronaviruses from both entering cells and replicating after infection—potentially serving as a preventative and a treatment. But the studies were small, in cell culture rather than living animals, and not conducted against the virus that causes COVID-19, SARS-CoV-2. Some early work with the drugs against SARS-CoV-2 may be promising but it, too, has been done in a test tube rather than an animal model.
Monday, March 30, 2020
Wednesday, March 25, 2020
Does Gilead's (withdrawn) orphan designation request for a potential coronavirus treatment deserve your outrage?
Many commentators were outraged by the FDA's announcement on Monday that Gilead received orphan drug designation for using the drug remdesivir to treat COVID-19. The backlash led to a quick about-face by Gilead, which announced today that it is asking the FDA to rescind the orphan designation. For those trying to understand what happened here and the underlying policy questions, here's a quick explainer:
How could the Orphan Drug Act possibly apply to COVID-19?
Under 21 U.S.C. § 360bb(a)(2), a pharmaceutical company can request orphan designation for a drug that either (A) treats a disease that "affects less than 200,000 persons in the United States" at the time of the request or (B) "for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for such disease or condition will be recovered from sales in the United States of such drug." An ArsTechnica explainer suggests that remdesivir received orphan designation under option (B), but this email from the FDA indicates that it was option (A).
The designation seems correct based on the plain language of the relevant statute and regulations: As of Monday, there were 44,183 cases diagnosed in the United States (and even fewer at the time of Gilead's request), and the Orphan Drug Act regulations indicate that orphan designation "will not be revoked on the ground that the prevalence of the disease . . . becomes more than 200,000 persons." But given the CDC's low-end estimates of 2 million Americans eventually requiring hospitalization, commentators have noted that this feels like a loophole that gets around the purpose of the Orphan Drug Act.
What benefits would Gilead have received from an orphan designation?
The main effect would have been a tax credit for 25% of Gilead's expenses for the clinical trials it is running to figure out whether remdesivir is actually effective for treating COVID-19. (The tax credit was 50% when the Orphan Drug Act became effective in 1983, but was reduced to 25% by the December 2017 tax reform.)
How could the Orphan Drug Act possibly apply to COVID-19?
Under 21 U.S.C. § 360bb(a)(2), a pharmaceutical company can request orphan designation for a drug that either (A) treats a disease that "affects less than 200,000 persons in the United States" at the time of the request or (B) "for which there is no reasonable expectation that the cost of developing and making available in the United States a drug for such disease or condition will be recovered from sales in the United States of such drug." An ArsTechnica explainer suggests that remdesivir received orphan designation under option (B), but this email from the FDA indicates that it was option (A).
The designation seems correct based on the plain language of the relevant statute and regulations: As of Monday, there were 44,183 cases diagnosed in the United States (and even fewer at the time of Gilead's request), and the Orphan Drug Act regulations indicate that orphan designation "will not be revoked on the ground that the prevalence of the disease . . . becomes more than 200,000 persons." But given the CDC's low-end estimates of 2 million Americans eventually requiring hospitalization, commentators have noted that this feels like a loophole that gets around the purpose of the Orphan Drug Act.
What benefits would Gilead have received from an orphan designation?
The main effect would have been a tax credit for 25% of Gilead's expenses for the clinical trials it is running to figure out whether remdesivir is actually effective for treating COVID-19. (The tax credit was 50% when the Orphan Drug Act became effective in 1983, but was reduced to 25% by the December 2017 tax reform.)
Tuesday, March 17, 2020
Challenging what we think we know about "market failures" and "innovation"
I really enjoyed the final version of Brett Frischmann and Mark McKenna's article, "Comparative Analysis of Innovation Failures and Institutions in Context." The article was published in Houston Law Review in 2019. But I initially encountered it when the authors presented an early draft at the 2012 Yale Law School Information Society Project's "Innovation Beyond IP Conference," conceived and brought together by Amy Kapczynski and Written Description's Lisa Ouellette. The conference explored mechanisms and institutions besides federal intellectual property rights (IP) that government uses, or could use, in order to achieve some of IP's stated goals. Examples explored include research grants, prizes, and tax credits, among countless others.
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