…with the help of the federal government and universities. Action Alert!
The high cost of prescription drugs has recently made headlines, evidenced by price-gouging schemes that cause drug prices to skyrocket 5,000% (as in the case with the infamous Martin Shkreli and the drug Daraprim) or Mylan’s more recent price hike on EpiPen’s to over $600 for a two-pack. What’s often left out of these stories, however, is how the federal government helped the pharmaceutical industry have this kind of power over drug pricing by allowing the industry to take advantage of publicly-funded research.
This stunning history is discussed at length in an article in The New Republic magazine, but here are the highlights: of the 210 medicines approved by the FDA between 2010 and 2016, every one originated in government labs, or university labs funded by the government. But it wasn’t always the case that the pharmaceutical industry could rake in billions of dollars in profit from publicly-funded research. For a long time, the US government retained the patents that sprung from government research.
This began to change in 1968, when the National Institutes of Health (NIH) revived the Institutional Patent Agreement program which allowed non-profits—mostly universities, in this case—to claim the licenses of medicines developed with government funds. Whereas before, inventors using NIH funds were required to assign patents back to the federal government, now they could be sold to the pharmaceutical industry. This trend was solidified in 1980 with the University and Small Business Patent Procedures Act, which allowed universities, non-profits, and small businesses to own, patent, and commercialize inventions developed with government research dollars.
Universities get government money to do research, patent any novel inventions that arise from that research, and sell the patents to the pharmaceutical industry. Consumers are forced to pay monopoly prices for drugs that their tax money helped develop.
Later in 1980, the Supreme Court decided that genes and genetically modified organisms (GMOs) could be patented, which sparked a gold rush in biotechnology. In the following years, more Pharma-friendly legislation was passed. The Orphan Drug Act, for example, provided incentives to the pharmaceutical industry to develop drugs for rare diseases; the Prescription Drug User Fee Act of 1992 put Big Pharma in charge of funding the FDA, the agency tasked with overseeing the industry; and the FDA Act of 1997 paved the way for direct-to-consumer drug advertising.
These policies have created the pharmaceutical industry as we know it today. We have a series of monopolies created and protected by the power of the federal government for drugs that can be dangerous and (often times) don’t work. Meanwhile, natural alternatives to these drugs are harassed and restricted by federal regulators, all in the name of protecting the bottom line of the drug companies.
And now, as we’ve been reporting for some months, we see pharmaceutical companies turning supplements into drugs, selling them at exorbitant prices, and removing the supplement versions. Our tax dollars fund their blockbuster drugs, and with those profits they are taking our supplements away. This cannot be allowed to stand.
Action Alert! If you haven’t already, send a message to Congress telling them to close the back-channel at the FDA that allows Big Pharma to turn nutrients into drugs. Please send your message immediately.