Drug Industry Gets Significant Help From U.S. Taxpayers, Report Says Associated Press

WASHINGTON—More than half the money needed to create top-selling prescription drugs came from U.S. taxpayers and not industry investment, says a federal report released Monday by critics of the drug companies. Best sellers like the ulcer-curing Zantac or Zovirax, which treats herpes simplex, were developed and tested chiefly through grants from the National Institutes of Health, the report said.

Out of 131 studies, clinical trials and other tests on five best sellers from 1995, the NIH deemed only one industry study as key to a drug’s development for use and sale, the report said.

And taxpayers paid again at the counter, contend advocates who released the NIH document.

“The drug industry is stealing from us twice,” said Frank Clemente, director of Public Citizens Congress Watch. “First it claims that it needs huge profits to develop new drugs, even while drug companies get hefty taxpayer subsidies. Second, the companies gouge taxpayers while spending millions from their profits to buy access to lawmakers and defeat pro-consumer prescription-drug legislation.”

The drug industry responded that, besides the federal funding, manufacturers spend billions of dollars on testing drugs and bringing them to market. Officials from the NIH said Monday that the report was only meant for internal use. Key contributions were based on researchers’ scientific judgment, not hard and fast criteria, said spokeswoman Anne Thomas.

The NIH document was designed to examine federal contributions to prescription-drug research. The internal study, obtained by Public Citizen through the Freedom of Information Act, showed that taxpayer-funded scientists and foreign universities conducted 85% of the published research studies, tests and trials leading to the discovery and development of five top-selling drugs.

Zantac costs about $100 for 60 pills. Zovirax costs about $145 for 60 pills. The government also played key roles on developing the hypertension drugs Capoten and its variation, Vasotec, which retail for about $135 for 60 pills, and the antidepressant Prozac, which costs about $75 for 30 pills.

Mr. Clemente’s group said the NIH document supports its argument that prescription drugs could be more affordable to middle and low-income seniors. The advocates rejected contentions by some companies that the cost of developing new medicines is causing the escalation of prices. But industry officials countered that drug companies still spend significant amounts on getting a drug to market, even when breakthrough studies are achieved with government help.

“There has been an honorable division of labor,” said Jeff Trewhitt, a spokesman for the Pharmaceutical Research and Manufacturers of America, an industry trade group.

NIH scientists and grant winners conduct fundamental research, he said. “The companies are primarily researching and developing new drugs and taking them through the 12-to 15-year drug-approval process at great expense,” he said, adding that the industry expects to spend $30 billion on research and development for 2001.

Consumer groups have long blamed drug makers’ aggressive marketing for soaring drug prices. Public Citizen also said that drug makers had spent $262 million during the 1999-2000 election, which includes $177 million on lobbying, $65 million on issue ads and $20 million on campaign contributions.

Lawmakers trying to bring a prescription-drug benefit to the federal health program Medicare also criticized drug makers Monday. “Millions of our seniors have paid taxes for decades and contributed to the development of new drugs,” said Rep. Tom Allen (D., Maine). “Now in their retirement, they pay the highest prices in the world for these drugs.”

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