How the Senate Paved the Way for Coronavirus Profiteering, and How Congress
Could Undo It
By Ryan Grim and Aida Chavez, The Intercept
03 March 20
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administration capitulated to pharmaceutical industry pressure and rescinded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 people.”
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 research.”
Ryan Grim
✔
@ryangrim
Bernie Sanders in 2000, arguing on behalf of his successful House amendment to
require drugs funded by public dollars to be sold to the public at a reasonable
price. It was stripped out in conference.
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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 NIH.
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.
