GAO Report on Taxol Development
Questions NIH Return on Investment
June 13, 2003 - A new General Accounting Office (GAO)
report
released June 6 criticizes the National Institutes of Health
(NIH) for not ensuring a reasonable commercial price from
the manufacturer of the drug Taxol, and for failing to negotiate
a larger royalty on its sales. The report, NIH-Private
Sector Partnership in the Development of Taxol, states
NIH made substantial investments in research related to Taxol,
but its financial benefits from the collaboration with Bristol-Myers
Squibb (BMS) pharmaceutical company, who commercialized the
drug, have not been great in comparison to BMS's revenue from
the drug. According to the report, world-wide sales of Taxol
from 1993 to 2002 exceeded $9 billion, of which NIH received
royalties at a rate of one half percent ($35 million).
In response to a draft of the report, NIH argues its negotiating
position was greatly limited because it did not hold a patent
on Taxol. Moreover, NIH believes it acted to get a promising
compound of limited supply into production and application
as expeditiously as possible. NIH's complete commentary on
the draft report is included in the final version.
Senator Ron Wyden (D-Ore), who initiated the GAO study, strongly
criticized
the NIH: "[T]his report proves that NIH does not
understand that as part of its mandate to get drugs to market
quickly, it must effectively move to make sure that patients
can afford those products. They should also work to get taxpayers
a square deal for their investment." No new legislation
has been proposed, but the release of the GAO report signals
continued congressional interest in NIH's role in drug pricing.
Information:
Stephen Heinig, Senior Research Fellow
AAMC Biomedical Health Sciences Research
sheinig@aamc.org
(202) 828-0488
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