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Welch, Warren Introduce Legislation to Boost NIH and FDA Medical Research

December 1, 2017
Press Release
Funding would come from pharmaceutical companies caught breaking the law who then enter into settlement agreements

WASHINGTON - Rep. Peter Welch (D-Vt.) has joined Senator Elizabeth Warren (D-Mass.) in introducing legislation that would boost funding for critical medical research. The bill would pay for the new research by requiring large pharmaceutical companies that break the law and settle their cases to reinvest a percentage of their profits into medical research conducted by the National Institutes of Health (NIH) and Food and Drug Administration (FDA).  

“Too often, drug companies game the system to maximize corporate profits at the expense of consumers and taxpayers,” said 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.”

Critical federal investments in medical research have remained nearly flat for over a decade. Today 9 out of 11 research proposals are left unfunded, threatening the pace of medical breakthroughs and undercutting America’s status as the world’s leader in medical innovation. The last decade has also seen a troublesome spike in the number of major drug companies settling with the government for breaking the law and defrauding taxpayers.

The Medical Innovation Act (H.R. 4487) would reverse both trends by making it easier for drug companies to develop the next generation of cures, while making it harder for them to profit from breaking the law and defrauding taxpayers.  Drug company 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 and only when they subsequently break the law and enter into major settlement agreements with the federal government.

In such cases, the 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 back into the NIH and FDA. These supplemental payments would equal between 0.75% and 1.5% 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.

The full text of the bill can be found here.