"For more than a decade,
I have followed the development of Taxol, a pharmaceutical which
in 2001 became the biggest-selling cancer drug in the world.
Taxol is derived from the bark of the Pacific yew tree, found in
my home state. Originally in the early 1990’s our government
gave near-total control of that life-saving plant species to one
company. The government nurtured the drug’s development with
millions and millions of dollars of research conducted at the National
Institutes of Health.
Because a substantial percentage of breakthrough drugs get to market
with such Federally funded research, I asked the General Accounting
Office to analyze Taxol as a case study. I wanted the GAO to determine
how the Federal government balances the need to get breakthrough
pharmaceuticals to market quickly, while making sure patients can
afford these medicines and the interests of taxpayers are protected.
The report I’m releasing today shows that the federal government
repeatedly dropped the ball – or didn’t even realize
they had the ball – when it came to protecting the public’s
interest in Taxol.
The report exposes serious dysfunction in the way the National
Institutes of Health transfers health care cures to the American
people. The public and the Congress shouldn’t stand for it
one day longer.
Here are the numbers that jump out at you. As of 2002, Bristol
Myers Squibb had sold more than $9 billion worth of Taxol. Because
of the National Institutes’ of Health’s lackluster negotiation
on behalf of patients and taxpayers, the government has received
about $35 million in royalties. That’s about one half of one
percent of all the sales.
It’s interesting but painful for taxpayers to note that researchers
at Florida State University used an NIH grant to create synthetic
Taxol, and got a much better deal. They licensed their process to
Bristol Myers Squibb – and they make more off it in a year
than the National Institutes of Health has ever made on Taxol.
What the government gets is obviously a key point. But it’s
not the most important point in this report. More essential, is
what NIH’s negotiations have meant for patients. I’m
talking about the American moms with breast and ovarian cancer.
I’m talking about AIDS patients with skin cancer. These folks
have paid at least $1,000 a dose for each of 10 rounds of Taxol
treatment. They needed NIH to focus on affordability, because having
the drug on the shelf doesn’t mean anything if you can’t
pay for it. But this report shows NIH did not do all it could to
advocate for patients.
In 1996, both NIH and Bristol-Myers-Squibb knew they had a winner
on their hands. In three years Taxol had racked up a billion dollars
in sales. But in their contracts, NIH didn’t use its authority
to require an accounting from the drug company that Taxol would
be reasonably priced.
They did eventually ask for information on pricing. NIH mentions
that in their response to this report. But their analysis shows
they may be clueless to this day about what makes drugs affordable
– and what doesn’t.
In the agency’s response to this report, NIH said they believed
the government fee schedule to discount pharmaceuticals would effectively
cut taxpayers’ costs. But the fact is, Medicare is not part
of that discounted fee schedule. In fact, Medicare is paying 6.6
times the amount other Federal programs do for Taxol – to
the tune of more than a half billion dollars.
I can’t be sure whether NIH doesn’t know or forgot
that Medicare isn’t on the fee schedule. But either way, it’s
an extremely costly oversight. Now, because NIH didn’t use
its power to get a better deal for taxpayers and patients, Medicare
has paid more than a half-billion taxpayer dollars to buy a taxpayer-funded
drug for the taxpayers who funded it.
The NIH is a vitally important agency which I have long supported.
Developing drugs in America is a risky business, and NIH is an important
agency because it does research that might not otherwise get done
by the private sector. Yet this report proves that NIH does not
understand that as part of its mandate to get drugs to market quickly,
it must effectively move to make sure that patients can afford those
products. They should also work to get taxpayers get a square deal
for their investment.
I’m going to do everything I can to drain the dysfunction
at NIH. I want to re-orient the agency’s focus to include
affordability as a key part of their tech transfer mission. The
agency’s a little myopic. They don’t seem to understand
that accessibility and affordability are two sides of the same coin,
and I want to close this institutional mental gap.
The report shows that patients and taxpayers could have gotten
a better deal under existing law – but for a failure of will
at the National Institutes of Health. But if NIH continues to drop
the ball, I’m not going to let the Congress continue to sit
on the sidelines."
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