June 06, 2003

Sen. Wyden's Prepared Statement for Taxol News Conference

"For more than a decade, I have 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 1990's our government gave near-total control of that life-saving plant species to 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 GAO to determine how the Federal government balances the need to get breakthrough pharmaceuticals to market quickly, while making sure patients can afford these medicines and the interests of taxpayers are protected.The report I'm releasing today shows that the federal government repeatedly dropped the ball - or didn't even realize they 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 Squibb had sold more than $9 billion worth of Taxol. Because of the National Institutes' of Health's lackluster negotiation on behalf of patients and taxpayers, the government has received about $35 million in royalties. That's about one half of one percent of all the sales. It's interesting but painful for taxpayers to note that researchers at Florida State University used an NIH grant to create synthetic Taxol, and got a much better deal. They licensed their process to Bristol Myers Squibb - and they make more off it in a year than the National Institutes of Health has ever made on Taxol. What the government gets is obviously a key point. But it's not the most important point in this report. More essential, is what NIH's negotiations have meant for patients. I'm talking about the American moms with breast and ovarian cancer. I'm talking about AIDS patients with skin cancer. These folks have paid at least $1,000 a dose for each of 10 rounds of Taxol treatment. They needed NIH to focus on affordability, because having the drug on the shelf doesn't mean anything if you can't pay for it. But this report shows NIH did not do all it could to advocate for patients.In 1996, both NIH and Bristol-Myers-Squibb knew they had a winner on their hands. In three years Taxol had racked up a billion dollars in sales. But in their contracts, NIH 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. NIH mentions that in their response to this report. But their analysis shows they may be clueless to this day about what makes drugs affordable - and what doesn't. In the agency's response to this report, NIH said they believed the government fee schedule to discount pharmaceuticals would effectively cut taxpayers' costs. 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 do for Taxol - to the tune of more than a half billion dollars.I can't be sure whether NIH doesn't know or forgot that Medicare isn't on the fee schedule. But either way, it's an extremely costly oversight. Now, because NIH didn't use its power to get a better deal for taxpayers and patients, Medicare has paid more than a half-billion taxpayer dollars to buy a taxpayer-funded drug for the taxpayers who funded it. The NIH is a vitally important agency which I have long supported. Developing drugs in America is a risky business, and NIH is an important agency because it does research that might not otherwise get done by the private sector. Yet this report proves that NIH does not understand that as part of its mandate to get drugs to market quickly, it must effectively move to make sure that patients can afford those products. They should also work to get taxpayers get a square deal for their investment. I'm going to do everything I can to drain the dysfunction at NIH. I want to re-orient the agency's focus to include affordability as a key part of their tech transfer mission. The agency's a little myopic. They don't seem to understand that accessibility and affordability are two sides of the same coin, and I want to close this institutional mental gap. The report shows that patients and taxpayers could have gotten a better deal under existing law - but for a failure of will at the National Institutes of Health. But if NIH continues to drop the ball, I'm not going to let the Congress continue to sit on the sidelines."