Who Pays for U.S. Prescription Drug R&D?
Prescription drug prices for the American taxpayer increased from over $50 billion dollars in 1993 to over $93 billion dollars in 1998.
Almost all of the health care research and development dollars in the United States, both public and private, is spent on the development of prescription drugs. In 1970, 70 percent of the money came from the American taxpayer. Beginning in 1985, spending on the treatment of AIDS began, with most of these R&D dollars going towards the development of anti-AIDS prescription drugs. As of 1995, the last year for which data is available, taxpayer-paid R&D and AIDS dollars amounted to 55 percent of $41 billion dollars spent on heath care R&D in the United States, with 45 percent of this coming from the pharmaceutical industry.
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Health Care R&D & AIDS Funding - minus Private Non-Profit Organizations -- Data from Tables 126 and 127 , HHS Handbook, Health, 2000 ( funds in $ millions) |
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1995 |
1994 |
1993 |
1990 |
1985 |
1980 |
1970 |
|
|
TOTAL R&D +AIDS |
$41,312 |
$38,452 |
$35,201 |
$25,199 |
$13,234 |
$7,662 |
$2,632 |
|
Industry |
$18,645 |
$17,106 |
$15,711 |
$10,719 |
$5,360 |
$2,459 |
$795 |
|
45% |
44% |
45% |
43% |
41% |
32% |
30% |
|
|
Federal Taxpayer R&D |
$13,423 |
$12,821 |
$12,108 |
$9,791 |
$6,791 |
$4,723 |
$1,667 |
|
Federal Taxpayer AIDS |
$6,821 |
$6,329 |
$5,328 |
$3,064 |
$205 |
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|
State /Local Taxpayer |
$2,423 |
$2,196 |
$2,054 |
$1,625 |
$878 |
$480 |
$170 |
|
TOTAL Taxpayer |
$22,667 |
$21,346 |
$19,490 |
$14,480 |
$7,874 |
$5,203 |
$1,837 |
|
55% |
56% |
55% |
57% |
59% |
68% |
70% |
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F ederal Taxpayer dollars for AIDS Funding: 1996-$7,522; 1997-$8,363, 1998-$8,931, and 1999-$9,988 |
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As can be seen, the American taxpayer continues to pay most of the money spent on health care R&D and AIDS spending in the United States, almost all of it for the development of prescription drugs. One would think that the American taxpayer would somehow benefit from this investment, perhaps in the reduction of the prices for those prescription drugs their taxpayer dollars paid to develop. But this is not happening. As Congressman Bernie Sanders of Vermont said in 1995, "When 42 percent of all U.S. health care research and development expenditures is paid for by the taxpayer, and 92 percent of the cancer drugs developed since 1955 were developed with Federal funding, we owe it to the taxpayer to give them a fair return on their investment with a reasonable price on the drugs they paid to develop." Congressman Sanders figures excluded the money spent on the development of drugs for AIDS since 1985.
And the Pharmaceutical Industry Keeps on Winning
On August 3rd, 1995, Congressman Sanders (I-VT) introduced an amendment to HR.2127, the FY1996 appropriations bill for the HHS, requiring the National Institute of Health to require that all such drugs developed with taxpayer dollars be marketed at a "reasonable price."
In House Roll Call Vote 624 on August 4th, 1995, the Sanders amendment LOST on a vote of 141 AYES to 284 NAYS. Of the 141 AYES, there were (4R, 136D, 1I). Of the 284 NAYS, there were (225R, 59D,) with 9 Representatives not voting (2R, 7D).
Of the 229 Republicans voting, 225 (98%) voted AGAINST the Sanders amendment, and 4 (2%) voted FOR it. Of the 195 Democrats voting, 136 (70%) voted FOR the Sanders amendment, and 59 (30%) voted AGAINST it.
In 1996, Congressman Sanders proposed a similar amendment to HR.3755, the FY1997 appropriations bill for HHS. This was defeated in House Roll Call Vote 306 on September 27, 1996 on a vote of 180 AYES (23R, 156D, 1 I) to 242 NAYS (205R, 37D), with 11 Representatives not voting.
Of the 228 Republicans voting, 205 (90%) voted AGAINST the Sanders amendment, and 23 (10%) voted FOR it. Of 193 Democrats voting, 156 (81%) voted FOR the Sanders amendment and 37 (19%) voted AGAINST it.
On September 27th, Congressman Sanders also introduced HR.4270, the Health Care Research and Development and Consumer Protection Act. It required NIH reporting on research and development expenditures for drugs approved for marketing. HR.4270 was killed and buried in the Republican-controlled "Health and Environment" Subcommittee of the Republican-controlled House Commerce Committee on October 11, 1996.
On February 8th, 1999, Sanders and 35 other Representatives (including one or two Republicans) introduced H.R.626 - the Health Care Research and Development and Taxpayer Protection Act. HR.626 again called for "reasonable pricing" on prescription drugs developed with Federal taxpayer dollars. Again, the bill was killed and buried in the "Health and Environment" Subcommittee, this time on February 24th, 1999.
The Republican Representatives of the Pharmaceutical Industry in 1999:
House Commerce Committee - The 16 Members of the Republican Majority on the "Health and Environment" Sub-Committee -- Michael Bilirakis, (R-FL) Chairman; Tom A. Coburn, (R-OK) Vice Chairman; Brian P. Bilbray, (R-CA), Ed Bryant, (R-TN) ,Richard Burr, (R-NC), Barbara Cubin, (R-WY), Nathan Deal, (R-GA), Greg Ganske, (R-IA), James C. Greenwood, (R-PA), Rick Lazio, (R-NY), Charlie Norwood, (R-GA), Charles "Chip" Pickering, (R-MS),John B. Shadegg, (R-AZ), Cliff Stearns, (R- FL), Fred Upton, (R-MI), Ed Whitfield, (R-KY)