Fun_People Archive
13 Apr
Two Bits of Corporate Welfare Info

Date: Thu, 13 Apr 95 13:13:20 PDT
From: Peter Langston <psl>
To: Fun_People
Subject: Two Bits of Corporate Welfare Info

From: Janice Shields <>
Date: Thu, 13 Apr 1995 12:12:43 -0400

TALK OF THE NATION (NPR, 3 p.m. EST) today will focus on corporate
welfare.  Guests include Stephen Moore of the CATO Institute or Robert
Shapiro of the Progressive Policy Institute, and Janice Shields of the
Center for Study of Responsive Law.

Janice Shields
Center for Study of Responsive Law
202-387-8030			|   Internet:

[Oops!  I guess we just missed that one... -psl]
Forwarded-by: Janice Shields <>
Subject: TAP on Elimination of "Reasonable Pricing" on Government Funded Drugs

[Yesterday the NIH announced that it was eliminating the "reasonable
pricing" clause in all Public Health Service Cooperative Research and
Development Agreements (CRADAs) and exclusive license agreements,
regardless of any circumstances.  This was the TAP statement, which was
quoted in today's NYT.  -Janice]

From: James Love <>


FOR IMMEDIATE RELEASE                        James Love
April 11, 1995           (Wed-202/387-8030;

Today Dr. Harold Varmus, the Director of the National Institutes
of Health (NIH), announced that the "reasonable pricing" clause
would be dropped from the PHS model Cooperative Research and
Development Agreement (CRADA) and the PHS model Exclusive License
Agreement.  Dr. Varmus has actively sought to eliminate the
reasonable pricing clause from all Public Health Service (PHS)
contracts with pharmaceutical companies, and today we find out
that he has persuaded the Clinton White House to do so.  Industry
lobbying on this issue has been intense, and pharmaceutical and
biotechnology firms want to eliminate any and all reviews of
their pricing of new drugs, including those where the development
was funded in part or in whole by the taxpayers.

Today's decision to completely eliminate the reasonable pricing
agreement from all contracts between the Pharmaceutical industry
and the federal government is a complete victory for the
shareholders of biotechnology and pharmaceutical companies and a
complete sell-out of consumer and taxpayer interests.
Pharmaceutical development is a complex process, and in some
cases it may have been appropriate to eliminate the reasonable
pricing agreement, in order to facilitate drug development.
However, there are also many other cases where the government's
role in the development of the drug is so significant, and the
development opportunities so clear, that it is clearly wrong to
eliminate the reasonable pricing clause.  Rather than provide the
PHS with mechanisms to avoid problems that may exist, the Clinton
Administration is abandoning any conceivable effort to protect
consumers and taxpayers.  Under today's actions, a drug company
will be able to charge any conceivable price, for any drug, no
matter how small the private sector's role in the development of
the drug, and no matter how comprehensive and complete the
government's role in the drug's development.  It is impossible to
imagine a more irresponsible action by the government, which
currently funds more than $10 billion per year in health care

Studies by TAP and others have demonstrated that the government's
role in the development of new drugs is extensive, particularly
for drugs used in the treatment of severe illnesses, such as
cancer or AIDS.  For example, from 1955 to 1993, the National
Cancer Institute played a major role in the development of 34 of
37 new drugs used to treat cancer.  According to a study by TAP
of FDA priority drugs approved for marketing from 1987 to 1991,
government funded drug inventions were priced roughly three times
as high as drugs developed without government support.  Today's
decision is expected to further errode what little pricing
restraint there is.

                                   James Love, Director, TAP
April 11, 1995

James Love, TAP; internet:
P.O. Box 19367, Washington, DC 20036; v. 202/387-8030; f. 202/234-5176
12 Church Road, Ardmore, PA 19003; v. 610/658-0880; f. 610/649-4066

[=] © 1995 Peter Langston []