January 29, 2015

Senators Introduce Medical Innovation Act to Increase Federal Investments in Research

Bill Asks Big Drug Companies Caught Breaking the Law to Reinvest in NIH Research

Bill Fact Sheet Available Here

Bill Text Available Here

WASHINGTON, DC - United States Senators Elizabeth Warren (D-Mass.), Ben Cardin (D-Md.), Sherrod Brown (D-Ohio), and Tammy Baldwin (D-Wis.) today introduced the Medical Innovation Act, a bill that would boost funding for critical medical research. Congressman Chris Van Hollen (D-Md.) plans to introduce the Medical Innovation Act in the House of Representatives next week with Congresswoman Jan Schakowsky (D-Ill.), Congressman Peter Welch (D-Vt.), and Congresswoman Kathy Castor (D-Fla.). The legislation would require large pharmaceutical companies that break the law and settle with the federal government to reinvest a small percentage of their profits into the National Institutes of Health (NIH). If the policy had been in place, over the past five years, NIH would have had nearly $6 billion more every year to fund thousands of new grants to scientists and universities and research centers around the country - almost a 20 percent increase in NIH funding.

"For decades, American medical research has been a remarkable success, transforming medicine, saving lives, and keeping our families healthy. We can't allow this engine of innovation to sputter," Senator Warren said. "The Medical Innovation Act is an important first step toward breaking Congress's stalemate over supporting NIH and renewing our nation's commitment to developing critical medical research."

"The NIH is one of the greatest federal assets serving the American people. Headquartered in Bethesda, Maryland, the work being done by NIH researchers is not only ground breaking, it is lifesaving. Recent budgets have stalled important research and unknown discoveries," said Senator Cardin. "For every dollar we invest in the NIH, we know that $2.21 goes back into the economy. I hope my colleagues this will support this commonsense legislation that invests in innovation and sharpens America's biomedical edge."

"Investing in research means jobs and medical innovation in Ohio. Our nation is the global leader in research and innovation - spurring discoveries that save lives and have revolutionized medicine," Senator Brown said. "But short-sighted budget cuts have slashed funding over the past decade - halting critical projects and preventing advancements. It's time we prioritize this research and support the work conducted at NIH, along with universities and institutions around Ohio. This bill will continue our nation's proud legacy while assuring long-term investment and saving lives."

"My home state has a rich history in research and science, and the Medical Innovation Act will ensure that Wisconsin remains a leader in helping our nation develop cures and strengthen our competitiveness when it comes to out-innovating the rest of the world," Senator Baldwin said.

"I'm proud to represent the NIH and FDA and the work they do to support the development of new treatments for diseases affecting American families, from cancer to Alzheimer's to heart disease. Despite the critical role these agencies play in driving scientific innovation and U.S. global competitiveness, federal investments in medical research have stagnated for too long," said Congressman Van Hollen. "I am pleased to join Senator Elizabeth Warren in introducing the Medical Innovation Act, an innovative way to inject additional vital funds into medical research at no cost to taxpayers. I hope my Republican colleagues will join us in this effort to invest in science and grow our economy."

"Drug companies that rely on federally-funded research to develop their blockbuster drugs should not be allowed to make defrauding consumers and taxpayers part of business as usual," Congresswoman Schakowsky said. "The Medical Innovation Act would make it more difficult for drug companies to game the system because it would require them to provide a share of their profits to increase investments in biomedical research at the National Institutes of Health. We can continue to be a leading force in medical innovation and this legislation will help ensure that we can cure diseases and save lives."

"The NIH provides crucial medical science breakthroughs, maintaining our international leadership in science and biomedical research and ensuring American medicine remains cutting edge. The Medical Innovation Act is a commonsense approach to advancing medical research," said Congressman Peter Welch.

"For many communities across the country research funding is not only about important health breakthroughs, but also about jobs and economic growth. For example, the Tampa Bay area is home to the renown Moffitt Cancer Center and the University of South Florida and their research missions have boosted higher-paying jobs while discovering the cures of the future. A recent Journal of the American Medical Association study shows research funding is suffering in the United States, while other countries are increasing support. Bills like the Medical Innovation Act help fill medical research and economic growth needs," said Congresswoman Castor.

Critical federal investments in medical research have been flat for more than a decade, and today 9 out of 11 research proposals are left unfunded, threatening the pace of new discoveries and undercutting America's status as the world's leader in medical innovation. The last decade has also seen a worrisome increase in the number of major drug companies settling with the government for breaking the law and defrauding taxpayers.

The Medical Innovation Act would reverse both trends by making it easier for drug companies to develop the next generation of cures and making it harder for them to profit from breaking the law and defrauding taxpayers. Funding is generated from the biggest and most profitable drug companies - only when they rely on government-supported research to develop billion-dollar, "blockbuster" drugs, and only when they subsequently break the law and enter into major settlement agreements with the government.

In such cases, the government settlements would go forward as they normally do, but the offending company would also be required to reinvest a relatively small portion of the profits it has generated as a result of taxpayer-supported research right back into the NIH. These supplemental payments would equal one percent of the offending company's profits for each of its blockbuster drugs that can be traced back to government research support, over a period of five years. This provides a much-needed boost to NIH funding and strengthens accountability for big drug companies caught committing wrongdoing.

The bill text is available here and a fact sheet is available here.