May 29, 2018 News

ICYMI: A Push for Affordable Prices for Taxpayer-Funded Drugs

‘Paying Twice’: A Push for Affordble Prices for Taxpayer-Funded Drugs
Robert Pear // The New York Times // May 28, 2018


  • “We have an incredibly powerful, incredibly productive research and development program being run by N.I.H.,” Ameet Sarpatwari, an instructor at Harvard Medical School, said. “Taxpayers put in money that is paying big dividends, and yet we pay higher prices for prescription drugs than any other country. In effect, we have taxpayers paying twice.”


WASHINGTON — On Aug. 30, the Food and Drug Administration approved a radical new cancer treatment that harnesses a patient’s immune system to attack tumor cells. The drug, known as Kymriah, grew out of research conducted and supported by the National Institutes of Health.

Seven weeks later the F.D.A. approved a second cancer therapy that uses similar technology. This treatment, Yescarta, “got its start right here at N.I.H.,” said Dr. Francis S. Collins, the director of the health institutes. It was developed by Kite Pharma using technology licensed from the N.I.H.

Kymriah costs $475,000 for a one-time treatment, and Yescarta goes for $373,000.

As President Trump vows to lower prescription drug prices, consumer advocates and health policy experts are increasingly saying that the government should insist on reasonable prices for drugs developed with taxpayer funds. New pharmaceuticals can seem miraculous — Kymriah and Yescarta are made from souped-up versions of a patient’s own immune cells — but they are useless if unaffordable, patient advocates say.

“We’ve heard from thousands of patients who tell us devastating stories of skipping doses, cutting pills in half, going without food and even declaring bankruptcy because of the prices of their drugs,” said Ben Wakana, the executive director of Patients for Affordable Drugs, a consumer group. “In the absence of N.I.H. action to address this issue, patients and families will be hurt, and our system will buckle under the weight of amazing drugs we cannot afford.”

Health policy experts pressed their case in a recent meeting with N.I.H. officials, who say their mission does not include judging or evaluating drug prices, even when the drugs use breakthroughs patented by the health institutes.

“We have an incredibly powerful, incredibly productive research and development program being run by N.I.H.,” Ameet Sarpatwari, an instructor at Harvard Medical School, said. “Taxpayers put in money that is paying big dividends, and yet we pay higher prices for prescription drugs than any other country. In effect, we have taxpayers paying twice.”

Officials at the health institutes say that nearly every new drug has some basis in research funded by their agency. But they oppose any stipulations that would limit or regulate the prices of drugs developed with the fruits of federal research.

Some in Congress disagree. Senator Ron Wyden, Democrat of Oregon, has been saying for years that federal health officials should focus on the affordability of drugs developed with the help of federal funds.

Doctors also express concern.

“The government has to have some say” in drug pricing, said Dr. Julie M. Vose, the chief of hematology and oncology at the University of Nebraska Medical Center, in Omaha. “Unfortunately, patients can’t get medicines because they’re so expensive. Sometimes they can’t even handle the co-payments. Something has to be done.”

A major goal of the health institutes is to encourage the development of commercial products that benefit public health. Its laboratories are immensely productive, generating hundreds of discoveries and inventions. Just this year the agency has posted on its website more than 225 inventions produced by N.I.H. scientists.

And government researchers who have historically focused on the basic science that drug companies then exploit are increasingly involved in drug development.

In October, the N.I.H. announced a partnership with 11 drug companies to speed the development of cancer treatments. The companies will contribute a total of $55 million to the five-year project. Taxpayers, through the health institutes, will contribute $160 million.

“The public sector now has a much more direct role in the applied-research phase of drug discovery,” said Mark L. Rohrbaugh, a federal official who coordinates the patenting and commercial licensing of inventions made by N.I.H. scientists.

Some of those products have become blockbusters. Scientists at the health institutes developed much of the technology used to create Gardasil, a vaccine to prevent cervical cancer caused by a common sexually transmitted virus. The agency secured patents for the technology and licensed it to Merck, which conducted clinical trials. In its annual report, Merck said sales of Gardasil totaled $2.3 billion last year.

The government is eager for such successes, because they benefit public health. And N.I.H. officials fear that if they insist on “reasonable prices” for commercial products that result from taxpayer-funded research, their collaboration with industry will shrink.

The output of the health institutes is growing, along with its budget. Congress has increased funding for the agency by 23 percent in the last three years, to $37 billion, fully expecting that it will contribute to new cures.

Health policy experts who met with N.I.H. officials in January urged the agency to reconsider its position on the pricing of drugs developed with federal funds. “We applaud them for taking the time to meet with us, but they showed little appetite for tackling this admittedly vexing problem,” Mr. Sarpatwari said.

The health institutes contributed to published research that was associated with every one of the 210 new drugs approved by the F.D.A. from 2010 to 2016, according to a study this year in the Proceedings of the National Academy of Sciences.

Dr. Fred D. Ledley, a professor at Bentley University in Waltham, Mass., and an author of the study, said that 84 of the 210 drugs were “first in class,” meaning first in a new class of drugs to treat a particular disease.

The views of government scientists are shaped by their experience.

At the height of the AIDS crisis, federal health officials tried to impose “reasonable pricing” terms on drugs developed with N.I.H. technology, and their experience soured them on the idea.

When the F.D.A. approved the first drug to treat AIDS in 1987, doctors and patients expressed alarm at the price, $8,000 to $10,000 a year for a patient. In 1989, the government added a clause that required “reasonable pricing” when it provided an exclusive license to a drug company to develop commercial products using N.I.H. technology.

In 1995, after extensive study and two public hearings, Dr. Harold E. Varmus, who was then the director of the health institutes, dropped the reasonable pricing clause. “One has to have a product to price before one can worry about how to price it, and this clause is a restraint on the new product development” that the public wants, he said then.

Dr. Varmus, now a professor at Weill Cornell Medical College in New York, reaffirmed that view this month. “Like many others,” he said, “I am distressed by the prices of many new drugs, and not just cancer drugs.” But he added, “N.I.H. is not a regulatory agency and would place itself in a lot of unnecessary jeopardy by trying to police prices.”

Drug and biotech companies say they do the vast majority of research to translate basic science into new medicines.

“The collective annual research budget of the biopharmaceutical industry is more than $150 billion, roughly four times the entire N.I.H. budget,” said Thomas DiLenge, the president for advocacy, law and public policy at the Biotechnology Innovation Organization, a trade group. At the same time, he said, “our members recognize that too many patients, even those with insurance, cannot afford access to the lifesaving cures and treatments that biotech companies are developing.”


Patients For Affordable Drugs is the only independent national patient organization focused exclusively on achieving policy changes to lower the price of prescription drugs.