Skip to main content
Premium Trial:

Request an Annual Quote

Put It in the Jar

Under a proposed bill, drug makers that break the law will have to pay into a sort of pharmaceutical "swear jar," writes Ed Silverman at Pharmalot.

This Medical Innovation Act, proposed by Senator Elizabeth Warren (D-Mass.), would have rule-breakers pay 1 percent of their profits that are derived from public sector research into US National Institutes of Health coffers for five years. She's calculated that if this rule had been put into place five years ago that there would have been an extra $6 billion to fund research grants each year, Silverman adds.

"Between these two problems — shrinking government support for research and increased rule-breaking by companies that have blockbuster drugs — lies a solution: requiring those big-time drug companies that break the law to put more money into funding medical research," Warren said at the Families USA Health Action Conference.

Currently, the fines paid by drug makers go to the general US Treasury, Silverman notes.

At In the Pipeline, Derek Lowe says that this populist idea may stem from a misunderstanding of how drug companies make their money. "In this idea, the tie [between pharma and NIH] is pretty indirect — unless, of course, Warren is one of those people who believe that the drug industry mostly makes its money by ripping off NIH-funded discoveries," he says.

The Pharmaceutical Research & Manufacturers of America also calls the proposal "misguided." But others, like those at Taxpayers Against Fraud say stiffer penalties may help cut down on fraud.