July 31, 2019

Van Hollen, Scott Introduce Landmark Legislation to Address Skyrocketing Prescription Drug Costs

We PAID Act Would Ensure Drugs Based on Taxpayer Funded Research are Fairly Priced

Today, U.S. Senators Chris Van Hollen (D-Md.) and Rick Scott (R-Fla.) introduced first-of-its-kind legislation to address skyrocketing prescription drug costs. The We PAID (Protect American Investment in Drugs) Act of 2019 will ensure that the prices of drugs developed using federally funded research (like NIH or CDC grants) are set at reasonable levels. Taxpayer-funded research plays a critical role in the development of prescription drugs – yet those same taxpayers are struggling to afford these drugs as companies continue to set unaffordable prices and gouge patients with unjustifiable price hikes year after year.

In fact, according to a study from the Proceedings of National Academy of Sciences, every single one of the 210 drugs approved by the Food and Drug Administration from 2010-2016 was based on NIH-funded research. For example, a study found taxpayers invested more than $200 million through NIH to develop the concepts around CAR-T cancer therapies. When Novartis came to market with the first CAR-T therapy in 2017, the company set the price of a one-time infusion at $475,000 and supplementary care associated with the drug is estimated to cost an additional $500,000. And this is just one of many examples.

“Maryland is proud to be home to NIH, and their talented scientists are on the front lines of life-saving research. I’ve consistently fought to increase our federal investment in NIH, but we must also make sure that taxpayers are getting a fair return on their investment – instead of being gouged by drug companies,” said Senator Van Hollen. “The premise of this bill is simple: If the research behind your drug has been funded by taxpayers, then you have to set a reasonable price and limit price hikes. Private companies using publicly funded science should not be raking in huge profits while consumers and taxpayers are struggling to pay the skyrocketing prices of the very drugs they helped fund in the first place.” 

Senator Rick Scott said, “There is no reason drug companies, especially those using taxpayer dollars to fund their research, should be charging Americans unreasonable prices for life-saving drugs. Families in Florida and across our nation are struggling to afford the prescription drugs they need to survive. The We PAID Act is one thing we can do to reduce the costs of drugs. If you used taxpayer-funded research to develop your drugs, you can’t charge unreasonable prices to American patients. It’s as simple as that. I urge all my colleagues to join Senator Van Hollen and I in support of this bipartisan and common sense legislation.”

“The We PAID Act will help American patients get the innovative new drugs supported by taxpayer investment while ensuring fair prices at the pharmacy counter. We are grateful for the leadership of Senators Van Hollen and Scott. As a patient with incurable cancer who lives with hope for a cure that will be in reach of all Americans, this legislation carries special significance,” said David Mitchell, a cancer patient and the founder of Patients For Affordable Drugs.

The We PAID Act of 2019 would:

  • Direct the National Academy of Medicine to complete a study on how to determine the reasonableness of a drug’s price, taking into account factors such as federal investment in the development of the drug; the affordability of the drug to payers, purchasers, and patients; research and development costs; the market for the drug; global and domestic sales of the drug; the price of the drug in other similar, industrialized countries; and expenditures of public payers for purchasing the drugs.
  • Establish an independent Drug Affordability and Access Committee to determine a reasonable price for each applicable drug based on the results of the National Academy of Medicine study.
  • Require drug manufacturers that enter into licensing agreements for technology patented by the U.S. government or by an entity that developed the technology using federal funding through NIH or other federal agencies to agree to:
    • Not exceed the reasonable price determined by the Drug Affordability and Access Committee beginning after one year on the market
    • Limit the annual price increase on any drug developed using this licensed technology to the rate of medical inflation
    • Submit the manufacturer’s drug price and information on the development of the drug to the Drug Affordability and Access Committee for a reasonable pricing determination
  • Require proper disclosure of government support in the development of patented technology, and allow a private right of action and/or a claim to be brought under Inter Partes Review before the U.S. Patent and Trademark Office’s Patent and Trial Appeal Board in the event proper disclosure does not occur.

To read the full text of the bill, click here.