CRADA "Reasonable Price" Clause Becomes Part Of HHS Approps Bill

"Reasonable" pricing for drugs developed with federal funding is closer to making a comeback with passage of an amendment to the fiscal 2001 Labor/HHS/ Education appropriations bill in the House.

The amendment offered by Rep. Sanders (I-Vt.) states that none of the funds provided to HHS by the bill "may be used to grant an exclusive or partially exclusive license" for a product developed with NIH funds "except in accordance with Sec. 209 of such title (relating to the availability to the public of an invention and its benefits on reasonable terms)."

The amendment passed with a 313-109 vote on June 13. The House appropriations bill was sent to the Senate June 15.

Sanders said on the House floor that his amendment "requires that NIH abide by current law and ensure that a company that receives federally owned research or a federally owned drug provide that product to the American public on reasonable terms" by bringing back the "reasonable pricing" clause that was required for a Cooperative Research And Development Agreement under the Reagan and Bush Administrations.

Sanders claimed that NIH abandoned the pricing clause "under heavy pressure from the pharmaceutical industry."

NIH removed the reasonable pricing clause in 1995. The agency's former director, Harold Varmus, MD, expressed frustration with the clause when he announced the withdrawal, indicating that forcing drug companies to negotiate prices with NIH discouraged industry from participating in R&D projects.

Bristol-Myers Squibb's Taxol was the only product whose price was negotiated with NIH under the old clause.

Sanders has introduced legislation to restore reasonable pricing for CRADA licenses several times since 1995, most recently as HR 626. He has also sponsored legislation that seeks to lower drug prices by allowing drugs to be imported into the U.S., a topic that recently received a hearing in the Senate Health Committee (¹ (Also see "Jeffords Rx Re-Importation Bill Gains Sen. Gorton's Support" - Pink Sheet, 19 Jun, 2000.)).