Sen. Wyden Holds News Conference on Anti-Cancer Drug Taxol
WYDEN:
For more than decade, I've followed the development of Taxol, a pharmaceutical which, in 2001, became the biggest-selling cancer drug in the world. Taxol is derived from the bark of the Pacific yew tree, found in my home state.
Originally, in the early 1990s, our government gave near total control of that life-saving plant species to just one company. The government nurtured the drug's development with millions and millions of dollars of research conducted at the National Institutes of Health.
Because a substantial percentage of breakthrough drugs get to market with such federally funded research, I asked the General Accounting Office to analyze Taxol as a case study. I wanted the General Accounting Office to determine how the federal government balances the need to get breakthrough medicines to market quickly while making sure that patients can afford these medicines and the interests of taxpayers are protected.
The report that I'm releasing today shows that the federal government repeatedly dropped the ball and, in fact, didn't even realize it had the ball when it came to protecting the public's interest in Taxol.
The report exposes serious dysfunction in the way the National Institutes of Health transfers health care cures to the American people. The public and the Congress shouldn't stand for it one day longer.
Here are the numbers that jump out at you. As of 2002, Bristol- Myers had sold more then $9 billion worth of Taxol. Because of the National Institutes of Health's lackluster negotiation on behalf of the patients and the taxpayer, the government has received about $35 million in royalties. That's about one-half of 1 percent of all the sales of Taxol.
It's interesting but painful for taxpayers to note that researchers at Florida State University used a National Institutes of Health grant to create synthetic Taxol, and they got a better deal. They licensed their process to Bristol-Myers Squibb, and they made more off it in a year than the National Institutes of Health has ever made on Taxol.
WYDEN:
What the government gets is obviously important, but it isn't the most important point to so many patients and those who are suffering across our country. I'm talking about the moms, the moms with breast and ovarian cancer. I'm talking about those with AIDS who have skin cancer. These folks have paid at least $1,000 a dose for each of 10 rounds of Taxol treatment. They want the National Institutes of Health to focus on affordability, because having the drug on the shelf doesn't mean a whole lot if you can't pay for it.
But this report shows that the National Institutes of Health didn't do all it could to advocate for the patients. In 1996, both the National Institutes of Health and Bristol-Myers knew that they had a big winner on their hands. In three years, Taxol had racked up $1 billion in sales. But in their contracts, the National Institutes of Health didn't use its authority to require an accounting from the drug company that Taxol would be reasonably priced.
They did eventually ask for information on pricing. The National Institutes of Health mentions this in their report. But their analysis shows that they may be clueless to this day about what makes drugs affordable and what doesn't.
For example, in the agency's response to the report, the National Institutes of Health said they believe that the government fee schedule to discount medicines would effectively cut the cost to the taxpayers. But the fact, is Medicare is not part of that discounted fee schedule. In fact, Medicare is paying 6.6 times the amount other federal programs pay for Taxol, to the tune of more than a half- billion dollars.
Now, I'm not sure whether NIH doesn't know or forgot that Medicare isn't on the fee schedule. But I'll tell you, either way, it's a pretty costly oversight for the patients and for the taxpayer.
Now, because NIH didn't use its power to get a better deal for the patients and the taxpayer, Medicare has paid more than a half- billion dollars in taxpayer money to buy a taxpayer-funded drug for the taxpayers who funded it.
The National Institutes of Health is a vitally important agency staffed by thousands of dedicated and caring people, and I've long supported the agency. Developing drugs in America is a risky business, and NIH is important because it does research that might not otherwise get done by the private sector.
Yet this report proves that the National Institutes of Health does not understand that, as part of its mandate to get drugs to market quickly, it must effectively move to make sure that the patients can afford the products.
I'm always struck at home when I have town hall meetings and people come up to me and say, "Ron, thanks for working to get the funding up at the National Institutes of Health, but we can't afford the medicines that their research is producing."
So I'm going to do everything I can to drain the dysfunction at the National Institutes of Health. I want to reorient the agency's focus to zero in on affordability as a key part of their technology transfer work.
The agency's just been a little myopic. They don't seem to understand that accessibility and affordability are two sides of the same coin, and I'm going to try to close this institutional mental gap.
The report shows that the patients and the taxpayers could have gotten a better deal for Taxol under existing law, but there was a failure of will at the National Institutes of Health. If NIH continues to drop the ball, I'm not going to sit around and let Congress stay on the sidelines.
Why don't we throw it open to your questions. Friday morning softball questions are especially welcomed, but let's talk about what you're interested in. And we have copies of the report, and of course it's being released this morning.
WYDEN:
Yes?
QUESTION:
(OFF-MIKE)
WYDEN:
Well, what's really striking is that the agency seems clueless right up to this day. I mean, for example, in the response to the report, and that's something that was just done in the last few days, they weren't aware that Medicare wasn't part of the fee schedule the way, say, the VA is.
So my sense is that they just see their job as getting the drugs to market, which, of course, I support, and it's critically important. But I think what we've now seen is that you need a better balance, you need to make sure that drugs do get to market, but also you consider the concerns of patients when it comes to affordability, and taxpayers when it comes to getting a good deal.
And as of last week, it seems that National Institutes of Health wasn't even familiar with the law on this.
QUESTION:
(OFF-MIKE)
WYDEN:
Well, of course the key, as you look at this report, is do you use your existing authority? What's so striking, for example, on this question of affordability is that the report shows that the agency didn't even try to get an accounting, didn't even try to get the evidence that the pricing was reasonable.
I mean, it is one thing to have some kind of price control regime, I'm not for that, it's another to have all kinds of elaborate, you know, legal requirements, prescriptive requirements, written into law. It's another, as you see in this report, to not even require evidence that the pricing was reasonable.
And I will just tell you, I think this system is dysfunctional. At this point, the public doesn't know what agreements are being negotiated, it doesn't know what the National Institutes of Health is getting back in terms of dollars, and it doesn't know the terms of the agreements with the companies.
And, basically, what we've learned is you've got to ask for a General Accounting Office report to get some accountability. And the reason that I did here is that this the biggest-selling cancer drug in the world, and I just want to make sure that if taxpayers are paying again and again and again for these medicines that they start getting a better value, as do the patients.
I mean, just think about this. The taxpayers basically paid three times here: The taxpayers paid for the research; the taxpayers paid through Medicare's purchase of the drug, at 6.6 times the rate, as if it had been procured, say, by the VA; and the taxpayers pay again when Bristol-Myers is using the 30-month extension that they can get of a patent exclusivity.
So the question you find is, how many times should taxpayers pay again and again, and how long is the Congress going to sit on the sidelines before it stands up for the patients who can't afford these medicines that get to market with taxpayer money?
QUESTION:
(OFF-MIKE)
WYDEN:
I am not accusing Bristol-Myers of doing anything other than being very aggressive and very tough in negotiating with the National Institutes of Health.
What failed here is that the National Institutes of Health didn't stand up for the patients, and they didn't stand up for the taxpayer. And I think that's what's unfortunate. That's the failure here.
And Bristol-Myers went out and fought and pushed for the best deal that they could get. That is their right to do it. But it's the job of the federal government to think not just about the well-being of pharmaceutical companies, but to think about the well-being of patients and taxpayers, as well. And that's what happened here.
QUESTION:
(OFF-MIKE)
WYDEN:
Again, we don't know the answer to that. What we know is that a big chunk of the breakthrough medicines get to market with taxpayer money.
WYDEN:
We're talking about the cancer drugs, we're talking about the AIDS drugs. There have been some estimates that up to 50 percent of those breakthrough drugs get to market with taxpayer money.
So my sense is that, if we know for a fact that the public isn't aware about what agreements are being negotiated, they don't know what the NIH is getting back in terms of dollars, they don't know the details of the agreements with the companies, suffice it to say it ought to make everybody concerned about whether the federal government is doing right by the patients and the taxpayers.
I'd also point out that this is particularly timely right now. Congress is going through a debate, a lengthy debate will begin in the next few weeks about Medicare reform.
How do you reform Medicare if, in fact, Medicare is paying almost seven times what other purchasers are paying for the biggest-selling cancer drug in the world? It's not exactly Medicare reform if you don't deal with that kind of issue.
QUESTION:
You mentioned that Bristol-Myers is very aggressive. Do you think it's a matter of the NIH is simply not matched or, as you mentioned, is it just a matter of will? I mean, why would they not aggressively counter Bristol-Myers negotiations?
WYDEN:
I don't think that NIH feels at this point that they really have any other obligation other than just try to do the research and get the product out.
And what I and, I think, others are saying is, when you're talking about taxpayer money, you've got a mission that goes beyond that, you've got a mission that says, "Yes, we've got to have the research, we've got to get those breakthrough cures to market, but you also have to be looking out for patients and for taxpayers."
And my sense is that NIH believes that because the United States Congress supports the research -- we obviously want the products, you now, derived for it -- that that's all we're going to, you know, care about.
I think what we're saying is that we're going to start holding them accountable for these other concerns, particularly affordability and the concerns of taxpayers.
QUESTION:
(OFF-MIKE)
WYDEN:
Well, again, what I think will happen as people learn about this report is constituents are going to start coming to members of Congress of both political parties and say, "Let me see if I get this right. The biggest-selling cancer drug in the world, the federal government is paying almost seven times what other payers, you know, are paying for it. What are you going to do, Mr. or Ms. Congress person, to make sure that I get a fair shake?"
In the past what people have said is, "We like the research, support the National Institutes of Health, but what are you going to do about affordability?"
Now we have the details of how the government dropped the ball. The government dropped the ball here. National Institutes of Health tells the United States Congress it needs more authority to do the job, we can look at that.
One of the things I've been looking at is whether we might want to make just a change in the NIH's mission, and to say that in addition to getting the drugs to market and how important it is, we want them to start factoring in affordability and accessibility for patients.
That's the kind of thing that I think would get bipartisan support, when people learn that the federal government has not gotten a fair shake for the patients and the taxpayers.
And many of you know that health is my specialty. I've written a number of laws that have picked up bipartisan support in the past, the National Practitioner Data Bank, the Medigap law, the Community Health Center law being three examples.
So I'm very confident that I can get bipartisan support if we need to go the legislative route to turn this around. I'm hopeful that the NIH, with the facts of this report getting out, will make the changes of its own volition.
But I've dealt with these kinds of issues in the past, and I think we can get bipartisan support up here if we do need to legislate.
Yes?
QUESTION:
(OFF-MIKE)
WYDEN:
If the NIH were to say, "We need some people who know more about negotiation," I think the Congress will be very receptive, you know, to doing that.
WYDEN:
I mean, there are people, for example, at the federal government who could even be detailed to the agency, you know, to deal with it.
What I'm saying is that we can't tolerate a situation where, again and again, the National Institutes of Health does this breakthrough research, fantastic science, done by caring people, and yet the American people can't afford the medicines, and taxpayers say, "We just paid, you know, hundreds of millions of dollars for the research, the company made $9 billion in sales, we got $35 million in royalties." It's just not credible from a taxpayer's standpoint and from a patient's standpoint to allow the status quo.
And I was, I'll tell you, I was just pretty much flabbergasted when the agency didn't even know how the Medicare fee schedule worked. I mean, they thought that they were going to bat for patients with respect to pricing. It's all there in the footnotes, in fact, page 17, footnote 25, you will see all the details with respect to how the fee schedule works.
And in their response, they thought that they were going to be factoring in the interests of patients because Medicare was in some fee schedule. And as you see in those footnotes, Medicare is not in the fee schedule. Medicare doesn't get the break, for example, the VA does. So the agency's pretty much clueless on an issue that is vitally important to the American people.
And to give you an idea of my history, this comes from the bark of the Pacific yew tree. It was originally given to Bristol-Myers for free. This is what witnesses said at my hearing. This is the only instance I know where literally the most valuable tree in the forest was transferred to, you know, one company, given literally monopoly control for a substantial period of time.
And so I followed this for years. And one of the reasons I insisted on the General Accounting Office inquiry is that when I asked the agency about this drug, they would always tell me that they were getting substantial sums of money back from Bristol-Myers, but they could never say, you know, what the specifics were.
So I said, if we're going to see more and more of this work done -- and it will because the Congress keeps voting additional funds, as I have, for research at the National Institutes of Health -- I want the government to sit down and start negotiating for the patients and the taxpayers.
I want to take one other and then wrap it up.
QUESTION:
(OFF-MIKE)
WYDEN:
Well, the way the agreements were written, and maybe I'll take you through that, there were essentially several, kind of, stages of the process with respect to the negotiations. There was an original research agreement, there was a second research agreement, and then there was the licensing agreement.
And what GAO says is that repeatedly, at each stage, and it's in the report, the agency didn't use its opportunities to go to bat for the patients and the taxpayers.
And certainly, by the third round of it -- this began in the early-'90s -- by 1996, everybody knew you had a very, very impressive drug on your hands. You'd racked up a billion dollars worth of sales.
So what I'm saying is, NIH has got to open its eyes, it's got to look at the pricing issue. And by 1996, by that third round of the discussions, they clearly should have been standing up for the patients on affordability.
And the staff could take you through the three stages, but there were three parts of it. And my view is, even if you discount the first two stages -- and I think that there is a lot of evidence that they should have, from the beginning, begun to think about this -- certainly, if you look at how anxious Bristol-Myers Squibb was, you got a sense that this would be very valuable.
By the third stage, when they'd racked up a billion dollars worth of sales, the government, it was all over the health care community that this was going to be a big seller.
I'll stick around if you folks want to visit, and the staff can take you through if you're interested in those eyeball-glazing footnotes, you can do that too. Thanks.