Thiru Balasubramaniam thiru at keionline.org
Fri Mar 6 22:21:18 PST 2020


Ryan Grim, Aída Chávez
March 2 2020, 6:30 p.m.

BEFORE A VACCINE to combat the coronavirus pandemic is within view, the
Trump administration has already walked back its initial refusal to promise
that any remedy would be affordable to the general public. “We can’t
control that price because we need the private sector to invest,” Alex
Azar, Health and Human Services secretary and a former drug industry
executive, told Congress.

After extraordinary blowback, the administration insisted that in the end,
any treatment would indeed be affordable. President Donald Trump on Monday
morning tweeted that he would be meeting with “the major pharmaceutical
companies today at the White House about progress on a vaccine and cure.
Progress being made!” The federal government, though, under the Clinton
administration, traded away one of the key tools it could use to make good
on the promise of affordability.

Gilead Sciences, a drugmaker known for price gouging, has been working with
Chinese health authorities to see if the experimental drug remdesivir can
treat coronavirus symptoms. World Health Organization officials say it’s
the “only one drug right now that we think may have real efficacy.” But
remdesivir, which was previously tested to treat Ebola virus, was developed
through research conducted at the University of Alabama at Birmingham with
funding from the federal government.

That’s how much of the pharmaceutical industry’s research and development
is funded. The public puts in the money, and private companies keep
whatever profits they can command. But it wasn’t always that way. Before
1995, drug companies were required to sell drugs funded with public money
at a reasonable price. Under the Clinton administration, that changed.

In the 1994 midterms, the Republican Revolution, built largely around a
reaction to Bill Clinton’s attempt to reform the health care system, swept
Democrats out of Congress. On its heels, in April 1995, the Clinton
administration capitulated to pharmaceutical industry pressure and
rescinded the longstanding “reasonable pricing” rule.

“An extensive review of this matter over the past year indicated that the
pricing clause has driven industry away from potentially beneficial
scientific collaborations with [Public Health Service] scientists without
providing an offsetting benefit to the public,” the National Institutes of
Health said in a 1995 statement announcing the change. “Eliminating the
clause will promote research that can enhance the health of the American

The move was controversial, and a House member from Vermont, independent
Bernie Sanders, offered an amendment to reinstate the rule. It failed on a
largely party-line vote, 242-180.

Then in 2000, Sanders authored and passed a bipartisan amendment in the
House to reimpose the “reasonable pricing” rule. In the Senate, a similar
measure was pushed by the late Paul Wellstone of Minnesota.

“Many in Congress find it hard to argue with Sanders’ line that ‘Americans
must pay twice for life-saving drugs, first as taxpayers to develop the
drug and then as consumers to pad pharmaceutical profits,’” Nature wrote at
the time.

Then-Sen. Joe Biden of Delaware voted to table Wellstone’s amendment, and
it was defeated 56-39.

“Our amendment requires that the NIH abide by current law and ensure that a
company that receives federally owned research or a federally owned drug
provide that product to the American public on reasonable terms,” Sanders
said in a floor speech. “This is not a new issue. During the Bush
administration, the NIH insisted that co-operative research agreements
contain, quote, a reasonable pricing clause that would protect consumers
from exorbitant prices of products developed from federally funded

A related effort from Sen. Ron Wyden, D-Ore., made it into the final Senate
bill, watered down to say that the director of the NIH should offer “a
proposal to require a reasonable rate of return on both intramural and
extramural research by March 31st, 2001.”

The two measures were hashed out in a conference committee, and Sanders’s
tougher House language was stripped out. The conference report included
this language: “The conferees have been made aware of the public interest
in securing an appropriate return on the NIH investment in basic research.
The conferees are also aware of the mounting concern over the cost to
patients of therapeutic drugs. By July 2001, based on a list of such
therapeutic drugs which are FDA approved, have reached $500,000,000 per
year in sales in the United States, and have received NIH funding, NIH will
prepare a plan to ensure that taxpayers’ interests are protected.”

That plan has never been implemented, while the federal government has
continued to fund research that leads to private gain. The Antiviral Drug
Discovery and Development Center at the University of Alabama in 2019
received a five-year, $37.5 million grant from the National Institute of
Allergy and Infectious Diseases — one of the 27 institutes that make up the

Democratic presidential candidates have pledged to use authority they say
is inherent in a federal law already on the books, known as Bayh-Dole, to
force reasonable prices, and have pledged to go even further with new
legislation. But the public might not need to wait for Election Day. With
Congress set to contemplate a round of funding to mitigate the pandemic,
the Sanders-Wellstone amendment could make a comeback.

Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International
41 22 791 6727
thiru at keionline.org

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