WASHINGTON _ The National Institutes of Health (NIH) hasscheduled a second Forum on Cooperative Research and DevelopmentAgreements (CRADAs) to elicit the views of consumer and patientadvocacy groups. The first CRADA forum, which featured an NIH-appointed advisory panel of industry and government officials, met onJuly 21 and recommended that the so-called "reasonable pricingclause" be eliminated as a standard feature of NIH intramuralCRADAs.Although a second panel was not originally planned, NIH officialsdecided that the first panel was not sufficiently diverse in makeup. Thesecond panel, scheduled to meet on Sept. 8, will include officials fromvarious branches of the Department of Health and Human Services,including the Health Care Financing Administration, the Public HealthService and the Health Resources and Services Administration.The second CRADA advisory panel also will include representativesfrom consumer and patient groups, such as the National Organizationfor Rare Disorders (NORD) and, possibly, the American Association ofRetired Persons. Although the panel's makeup is not finalized,representatives from the health insurance industry, minority advocacygroups and AIDS activist groups have been invited to serve.The NIH pricing clause has been a sore point for the pharmaceuticaland biotechnology industries since it was first inserted into CRADAs in1989. The clause states that there must be a "reasonable relationshipbetween the pricing of a licensed product" and "the public investmentin that product." Further, the clause states that in the case of exclusivelicenses for NIH technologies that relationship may need to besupported by "reasonable evidence."Although the NIH has never enforced the clause, industry advocateshave argued that its mere presence in legally binding agreementssquelches technology transfer. Industry has not been the only critic ofthe clause _ NIH scientists who spoke at the July CRADA forumcomplained that the clause was hampering scientific collaborationswith the private sector.But consumer groups have argued that taxpayers are paying twice forsome drugs, once when their taxes support basic research at NIH andagain when they buy the drug. At least two high-priced drugsdeveloped under CRADAs, namely the breast cancer drug taxol and theAIDS drug AZT, created storms of controversy.Due to the spiraling costs of health care, NIH director Harold Varmusfaces a political environment in which concern about drug prices,especially those drugs developed with federal funding, is running high.On July 27, just a few days after the first CRADA forum, Rep. RonWyden (D-Ore.) wrote to Varmus, saying that the reasonable pricingclause must be enforced by NIH until an alternative mechanism ofsafeguarding taxpayers' investment in drugs can be found."There may be other approaches that can protect taxpayer andconsumer rights and interests," wrote Wyden. "I am open to looking atany alternative language that 1) gives taxpayers reasonable access tofederally financed drugs, and 2) gives the federal government realleverage against excessive pricing of important new drugs."Wyden said that alternative means of accounting for significant federalfunding of drugs could include royalty payments to NIH, discountpricing for public health clinics or public insurance programs or a moreselective enforcement of the reasonable pricing clause (i.e., only forCRADAs that cover technology that has been "significantly" financedby the government).Wyden's chief health aide David Schulke told BioWorld that the NIH'sdecision to get more input on CRADA policies is a wise one. "It'sanother sign that Varmus is open to different points of view."The first CRADA panel was composed of five NIH officials, one FDAofficial, four pharmaceutical industry executives, two biotechnologyindustry executives, one official from the Centers for Disease Controland Prevention, one executive from a hospital and one attorney.Absolutely No Pricing ClauseIndustry representatives on the panel adopted a take-no-prisonersapproach at the July meeting to anything short of annihilation of thereasonable pricing clause. Suggestions by NIH panel members toreplace the clause with wording to require that companies provide"access" to drugs (i.e., programs to distribute drugs free to those whocan't pay for them) was rejected. Another suggestion to set up specificcriteria for CRADAs that could exclude the clause was also rejected."What happened was, we had the first CRADA meeting and we all satthere and heard bad things about the reasonable pricing clause," saidone NIH official who insisted on anonymity. "It became very apparentthat we needed to address more aggressively the consumer view. Wehave an obligation to consider the view of the average consumer whomay have breast cancer and be paying $5,000 a year for drugs."NORD president Abbey Myers, one of the confirmed members of thesecond CRADA panel, told BioWorld that she believes the NIH maynot be the appropriate government agency to rule on the reasonablenessof drug prices. She said that an "independent panel" could decide suchmatters for the NIH and that they should do so in a way that doesn'trequire companies to hand over proprietary information."I tend to think that the NIH should just better enforce the tools theyalready have," said Myers. "If the NIH grants an exclusive license andthen the drug is priced extraordinarily high, they should be able to givethe technology to others on a non-exclusive basis. America is based oncompetition so why are some in the drug industry so opposed tocompetition?" n

-- Lisa Piercey Washington Editor

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