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Big pharma should support the NIH

Recently at a reception, one of my faculty colleagues at Johns Hopkins expressed concern about her academic future. The pay line for National Institutes of Health (NIH) grants in her field was 7 percent; that means that she has to spend two or three weeks writing a proposal that has only a 7 percent chance of getting funded. Assuming she must write 14 proposals to get one funded (a 7 percent rate), then she will be spending her entire year writing proposals and not actually doing the work. Because of this low acceptance rate, she is evaluating her options about remaining a researcher after having gotten many NIH grants and having written over 60 peer reviewed articles in major journals.

The fact that the NIH is the preeminent developer of basic medical science in the world is without question. The number of basic science discoveries funded by the NIH, Nobel Prize winners with a history of funding from NIH, and many other indicators show the tremendous influence of NIH on basic medical science. Yet today, Congress has failed to maintain a strong federal investment in NIH. The Medical Innovation Act, a bill introduced by Elizabeth Warren in the Senate and Chris Van Hollen in the House, would help jumpstart vital new research by giving the NIH a much-needed funding boost and likely keep my colleague in the field.

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The Medical Innovation Act would accomplish this by using funds from large pharmaceutical companies that have committed wrongdoing to support the NIH. The bill would ask these companies to pay a relatively small additional sum into NIH research after they enter into settlement agreements with the government.

Why should we ask pharmaceutical companies to help support NIH research? Because they take the basic science information and technology developed through NIH-funded research and use it to develop new drugs, which are then sold in the marketplace for billions of dollars. Once they receive approval from the FDA, the pharmaceutical companies are given virtual monopolies to sell the drugs for a prescribed time period and have complete freedom to set the prices that they want to charge for these drugs. Because of this, the largest drugmakers brought in a combined $90 billion in profits in 2013 alone.

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Still, pharmaceutical companies have been repeatedly caught engaging in pricing schemes and deceptive marketing practices that defraud federal and state governments. Every year, the nation's largest pharmaceutical companies pay millions — and sometimes billions — of dollars in criminal fines, penalties and restitution as part of settlement agreements with the Department of Justice and the states. The money that is recovered from these court cases goes to the Medicare and Medicaid programs to help them recover the losses they incurred from the inappropriate behavior by these drug companies.

At the same time, funding for the National Institutes for Health is being cut. This severely affects development of the basic science the NIH values.

The Medical Innovation Act would require companies to contribute 1 percent of their profits to the NIH for every $1 billion grossing drug after they enter a settlement agreement with the government. This would deter companies from engaging in fraudulent behavior and provide an additional source of funds for the basic science at the NIH.

Pharmaceutical companies may argue that this payment will reduce their ability to bring new drugs to market, but they only have to pay if they engage in inappropriate behavior, and pharmaceutical companies ultimately benefit from this increase in NIH funding.

Pharmaceutical companies have already decided it is a good investment to pay into government agencies that benefit them, anyway. Over 20 years ago, they agreed to pay user fees to the Food and Drug Administration to speed up the drug approval process. Why not also contribute a small amount to speed up the basic science that will speed up new drug development?

The new funding provided under the Medical Innovation Act would not be a large amount of money to the pharmaceutical companies. But for my colleagues who need money to fund their labs, it could be the difference in making a breakthrough discovery leading to the next life-saving drug. It may also prevent researchers like my colleague from being forced to leave basic science and do something else.

Gerard Anderson is a professor of health policy and management and international health at the Johns Hopkins Bloomberg School of Public Health; this op-ed is written in a personal capacity and is independent of his affiliation with Johns Hopkins University. His email is ganderson@jhu.edu.

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