[Ip-health] The Hill on Sanders Bill on Drugs Developed with Taxpayer Money

[Mike Palmedo]

http://thehill.com/leading-the-news/sen.-sanders-renews-push-on-drug-pricin=
g-bill-2007-05-02.html

Sen. Sanders renews push on drug pricing bill

David Mikhail
May 03, 2007
The Hill

Sen. Bernie Sanders (I-Vt.) introduced legislation yesterday that seeks
to reinstate a provision known as the reasonable pricing clause, which
would provide the government price negotiating-authority for drugs that
are developed with federal funding.

The measure was filed as an amendment to another prescription drug bill,
according to Sanders spokesman Mike Briggs.

With the provision=92s history of acquiring significant cross-party
support and the populist character of the legislation, the Sanders
measure provides Democrats=92 their best chance of sending a prescription
drug price-control measure to the White House, paving the way for what
could be President Bush=92s third veto.

Sanders said that the lack of the provision has helped create the
situation where Americans are paying the highest drug prices in the
world, =93while Americans pay for research, [the pharmaceutical drug
industry] receives a discount.=94 He went on to blast the drug industry
lobby, calling it =93the most powerful lobbying force in the capital=94 and
attributing the repeal of the clause in 1995 to its efforts.

But while the GOP is linked with the pharmaceutical industry, it was a
Democrat in the White House who was responsible for the policy change.

In an effort to use federal funding to overcome barriers to drug
development, the reasonable pricing clause was adopted in 1989 and was
required for drugs that were collaboratively developed with the National
Institutes of Health (NIH) under exclusive licensing agreements. The
Clinton administration ultimately repealed the provision after the
NIH-convened two panels found that the clause undermined the speed with
which pharmaceutical drugs were developed.

Sanders initiated several attempts for the provision=92s return as a
member of the House, including an effort in 2000 when he introduced
renewal legislation as an amendment to the health appropriations bill.
In spite of the Republican controlled Congress, the measure passed the
House -- garnering 118 Republican votes, over half of the House GOP
delegation --yet was stripped from the final bill during conference
committee, according to the senator.

A notable =93no=94 vote came from former congressman Billy Tauzin (R-La.),
head of the Pharmaceutical Research and Manufacturers of America (PhRMA).

Rep. Dana Rohrabacher (R-Calif.), a supporter of the provision, plans on
supporting new legislation on the issue. Setmayer added that the
congressman believes that the federal government has a vested interest
in setting the price of drugs developed with federal funds and that =93a
lot of GOP members=94 would likely support the legislation due to the
exorbitant costs of healthcare.

Bush has publicly stated that he would veto legislation that seeks to
extend the same price-negotiating authority for drugs distributed under
the Medicare Part D program. With help from the White House, Republicans
leaders in the Senate torpedoed that bill in a cloture vote three weeks
ago. Most believe Bush will likewise oppose the Sanders measure

The White House=92s statement of administration policy on the Part-D bill
echoes the criticism of the reasonable pricing clause, that such a price
control would impede competition and undermine drug development efforts.

However, the Sanders bill =96 unlike the Part D legislation =96 has a
reasonable chance to attract 60 votes. In addition to the five
Republican senators who broke rank with the party to vote for cloture on
the Part D bill, two GOP senators, Tom Coburn (R-Okla.) and John Thune
(R-S.D.) voted in favor of the Sanders measure in 2000 as members of the
House. Both offices did not respond to calls for comment.

Ken Johnson, senior vice president for PhRMA, issued a statement
denouncing the Sanders measure, offering a hint into future lobbying
efforts against the bill: =93Clearly, policies such as the reasonable
pricing clause disincentivize collaborative research that helps patients
live longer, healthier lives.=94

Sanders dismissed the argument, however, contending that a large amount
of drugs have been developed with federal funds, adding, =93Don=92t believe=
 it.=94

--
Mike Palmedo
Research Coordinator
Program on Information Justice and Intellectual Property
American University, Washington College of Law
4910 Massachutsetts Ave., NW Washington, DC 20016
T - 202-274-4442 | F 202-274-0659
mpalmedo@wcl.american.edu