Big Pharma companies caught committing fraud, withholding drug safety information, marketing drugs for unapproved uses, or bribing physicians, could be forced to pay fines to support funding for the US Government’s medical research wing, the National Institutes of Health (NIH), according to legislation being proposed this week.
“It’s like a swear jar,” said Senator Elizabeth Warren at last week’s Families USA Health Action Conference in the Washington DC. “Whenever a huge drug company that is generating enormous profits as a result of federal research 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.”
She argued that any firm caught “making money by skirting the law” should pay a modest “one percent of an offending company’s annual profits for each of its blockbuster drugs that can be traced to government research support,” as both an incentive to avoid industry wrongdoing and to supplement shrinking government support for research.
The legislation is a form of accountability, she added. “Instead of letting companies that break the law get off with a slap on the wrist, the Medical Innovation Act will make sure that they pay up in a way that really makes a difference.”
In 2012, GlaxoSmithKline pleaded guilty to criminal charges and paid a $3bn (€2.7bn) settlement after failing to report safety data and promoting certain antidepressant drugs for unapproved uses. But despite this “record” figure, it equated to less than 10% of what GSK made selling the drugs in question and, according to Warren, even led to the stock price going up.
“Fines for big drug companies have increasingly become just another cost of doing business,” she said. If this proposed law had been in place over the past five years, she told delegates the NIH would have benefited from an annual boost of approximately $6bn, about 20% of total funding.
“It seems that the biggest drug companies are increasingly playing by a different set of rules than everyone else. The government has kicked thousands of small and medium sized physician practices out of the Medicare program for fraud, but not one of these major drug companies has ever been kicked out.”
Misguided policy?
The Pharmaceutical Research and Manufacturers of America (PhRMA) described Warren’s proposal as “misguided” in a statement.
“The NIH plays a vital role in basic research and early discovery, and we support sufficient federal funding for their work,” said spokesman Robert Zirkelbach. “But pursuing misguided policies that siphon funding from the groundbreaking medical research happening in the biopharmaceutical industry will have devastating consequences for patients and society.”
He added that such legislation would result in fewer medicines for patients and lost jobs within the industry.