November 06, 2019

Senator Warren Reintroduces the Medical Innovation Act

Rep. Peter Welch Reintroduces House Companion Bill; Bill Increases Funding for Medical Research by Requiring Drug Companies Accused of Breaking the Law to Reinvest in NIH and FDA

Washington, DC – United States Senator Elizabeth Warren (D-Mass.) today announced the reintroduction of the Medical Innovation Act. The bill, along with companion legislation reintroduced today by Congressman Peter Welch (D-Vt.), would increase funding for critical medical research by requiring large pharmaceutical companies that are accused of breaking the law and settle allegations of criminal wrongdoing with the federal government to reinvest a small percentage of their profits in the National Institutes of Health (NIH) and the Food and Drug Administration (FDA).
"When big pharmaceutical companies are caught breaking the law, they’re typically given slap-on-the-wrist settlements and go right back to side-stepping regulators and jacking up prices,” said Senator Warren. “We need real accountability for big pharma, and the Medical Innovation Act helps us get there by forcing big drug companies that are fined by the federal government to invest in future life-saving medical research.”
"Too often, drug companies game the system to maximize corporate profits at the expense of consumers and taxpayers," said Congressman Welch. "This commonsense legislation will hold them accountable, while funding vital medical research that will keep America on the cutting edge of innovation, medicine, and scientific progress."
Federal funding is critical to maintaining America’s dominance in medical research. However, in Fiscal Year 2018, the NIH could fund only 20% of the applications it received. Meanwhile, the past decade has seen repeated instances of major drug companies engaging in misconduct. Companies have allegedly defrauded Medicare and Medicaid, marketed drugs for uses they aren’t approved for, illegally incentivized doctors to prescribe drugs, and engaged in other violations or criminal and civil law. The companies have settled many of these claims with the federal government, treating the fines as a cost of doing business.
The Medical Innovation Act would increase funding for medical research by:
  • Requiring large pharmaceutical companies that settle alleged criminal violations with the federal government to reinvest a small percentage of their profits in NIH and FDA. These payments, which would vary according to the severity of the settlement penalty, would only be required of companies that rely on federally-funded research to develop billion-dollar, “blockbuster” drugs.
  • Investing in initiatives at NIH and FDA that will save lives. Funds collected under the Act would be used to develop treatments and diagnostics to address unmet medical needs; support research grants for early career scientists; research diseases that disproportionately contribute to federal healthcare spending; and advance basic biomedical research, among other FDA and NIH initiatives. 
  • Promoting sustained investments in biomedical research. To ensure that the Act results in a net increase in funding for medical research, money from the supplemental settlement fees would only be available in years that annual appropriations for NIH and FDA are equal to or greater than appropriations for the agencies in the prior fiscal year.
The bill is cosponsored by Senators Sherrod Brown (D-Ohio), Tammy Baldwin (D-Wis.), Bernie Sanders (I-Vt.), and Kamala Harris (D-Calif.).
The Medical Innovation Act has been endorsed by AIDS United, Families USA, the National Women’s Health Network, Public Citizen, the Society of Behavioral Medicine, and the University of Massachusetts Medical School.
Senator Warren also introduced the Corporate Executive Accountability Act to hold executives of large corporations criminally responsible when their companies commit crimes, harm large numbers of Americans, or repeatedly violate federal law.