The US federal government’s National Institutes of Health (NIH) has declined a petition from a public interest group to lower the price of a drug for advanced prostate cancer developed with tax revenue. In January of this year, Knowledge Ecology International petitioned the NIH to reduce the $129,000-a year list price of Xtandi, a drug developed by Japan’s Astellas Pharma and allow a generic product to enter the market.

The petition was supported by the Union for Affordable Cancer Treatment, along with Democratic Party presidential candidate Bernie Sanders and two congressmen from the US states of Vermont and Texas respectively. NIH director, Francis Collins, said that there was no justification for allowing a generic drugmaker to produce Xtandi because there is no shortage of the medicine, Knowledge Ecology International nevertheless said it planned to appeal the decision to the US Department of Health and Human Services.

Astellas and San Franciso-based Medivation jointly market Xtandi within the US, while   Astellas sells it outside the US. Knowledge Ecology said it had asked the NIH to use its "march-in rights" to break the companies' monopoly before the patent on Xtandi expires, invoking the rarely used Bayh-Dole Act (after US Senators Birch Bayh and Bob Dole) from 1980, which allows the US government to both give any generic manufacturer a non-exclusive license to make a drug and use its own royalty-free license to have it manufactured.

Currently, the government covers much of the cost for Xtandi prescriptions filled under federal health programs such as Medicare, Medicaid and the Veterans Administration.

Knowledge Ecology said Collins' letter indicated NIH failed to evaluate evidence presented by the non-profit and the Union for Affordable Cancer Treatment that Astellas charges $88.48 per pill, two to four times more than in other wealthy countries.

Astellas said in a statement that many patients with low incomes and either no insurance or inadequate insurance covering get Xtandi free, and about 80% of patients covered by Medicare or private insurers have a monthly copayment of $25 or less, with their health plans paying the remainder.