Last week, Massachusetts Senator Elizabeth Warren announced she is sponsoring a bill that would take on Big Pharma. The Medical Innovation Act would tackle the issues of the lackluster investment in medical research from the government and illegal activity by major drug companies.
“We now live in the era of blockbuster drugs,” said Warren at the Families USA Health Action Conference. “About a hundred different drugs are used by so many people that each drug brings in more than a billion dollars in revenue. Many have called these blockbuster drugs the holy grail of the pharmaceutical industry, literally transforming the treatment of high cholesterol, diabetes, HIV, asthma, rheumatoid arthritis, breast cancer, colon cancer, and leukemia.”
“Blockbuster drugs that generate billion dollar profits and are used by millions of consumers don’t just appear overnight as if by magic,” Warren continued. “Rarely do they appear as the result of a single, giant company’s individual genius. Drug companies make great contributions, but so do taxpayers. In other words, we built those innovations together.”
Warren noted that the “American engine of medical innovation has begun to sputter,” citing the government as the first problem. Congress has continued to cut funding for the NIH rather than increasing it “at the pace of potential scientific innovation.” As it stands now, federal funding can’t even keep up with the rate of inflation.
The second problem, Warren pointed out, is the drug companies themselves, who have been “ making money by skirting the law.” Warren called out these companies for defrauding Medicare and Medicaid, withholding information regarding their drugs’ safety, marketing drugs for unapproved uses, and giving doctors “kickbacks for writing prescriptions for their drugs.”
“These companies are not getting caught up in minor paperwork mistakes,” said Warren. “They are not victims of over eager regulators. Between 2007 and 2012, the world’s largest pharmaceutical companies paid over $13 billion — that’s billion with a ‘B’ — in fines and settlements stemming from violating federal laws. That doesn’t happen without serious wrongdoing.”
Warren’s bill, which should be introduced to Congress this week, looks to solve the first problem by using the second.
“It’s like a swear jar,” Warren said. “Whenever a huge drug company that is generating enormous profits as a result of federal investments gets caught breaking the law – and wants off the hook – it has to put some money in the jar to help fund the next generation of medical research.”
This legislation would increase the National Institutes of Health’s funding without raising taxes and without going after small- or medium-sized companies — only the giants. And even the costs then wouldn’t be bank-breaking, “just one percent of an offending company’s annual profits for each of its blockbuster drugs that can be traced to government research support.”
According to Warren’s figures, if the bill had been in place over the past five years, the NIH would have gotten approximately $6 billion, or 20 percent, more each year for research.
“If Big Pharma were fined even ten percent of the time they broke the law and that money was then used for medical research,” said Tim O’Brien, product liability attorney with the Levin, Papantonio Law Firm, “we would have enough money to find cures for diseases that actually exist, as compared to the faux diseases created by drug companies to meet Wall Street expectations.”
“Who would ever say ‘no’ to such legislation?” asked O’Brien. “The ‘we’ve cured too many diseases’ lobby?”
Warren’s plan kills two birds with one stone while helping to potentially save the lives of millions of Americans. Holding Big Pharma accountable for its actions and increasing innovation is a win for the American people.
