Table 13
Illustrations of US government role in supporting development of new health care inventions

May 25, 2000, Joint Economic Committee-The Benefits of Medical Research and the Role of NIH.

A study of the 21 drugs introduced between 1965 and 1992 that were considered by experts to have had the highest therapeutic impact on society found that public funding of research was instrumental in the development of 15 of the 21 drugs (71 percent). Three-captopril (Capoten), fluoxetine (Prozac), and acyclovir (Zovirax)-had more than $1 billion in sales in 1994 and 1995. In addition to these drugs, other members of the group of 21 drugs, including AZT, acyclovir, fluconazole (Diflucan), foscarnet (Foscavir), and ketoconazole (Nizoral), had NIH funding and research to help in clinical trials.

April 23, 2000, Jeff Gerth and Sheryl Gay Stolberg in the New York Times, MEDICINE MERCHANTS- Drug Companies Profit From Research Supported by Taxpayers. Quotes from this case study of Xalatan, an eyedrop for glaucoma marketed by Pharmacia.
In a 1997 study commissioned by the National Science Foundation, C.H.I. looked at the most significant scientific research papers cited in medicine patents. It found that half the cited studies were paid for with United States public funds, primarily from government and academia; only 17 percent were paid for by industry. (The rest came from public and private foreign sources.

And in a study with the National Eye Institute, published in 1996, C.H.I. found that 41 percent of patented eye-care technology was linked to research financed by the health institutes, including Dr. Bito's studies, which have been cited in 15 patents, including Xalatan's.

"I think that is very typical," Dr. Narin said of Dr. Bito's work. "If you find any good advanced biomedical patent, and you look at its science references, most of them are going to be public," meaning from publicly financed research.

. . .last year, Pharmacia spent $650 million to buy Sugen, a biotech concern in San Francisco that is collaborating with the National Cancer Institute on clinical trials of its two leading drugs. The company's co-founder, Dr. Joseph Schlessinger, is a New York University scientist whose initial financing included a nine-year grant from the cancer institute, N.I.H. records show.

So the pharmaceutical companies have become more efficient, in part because university researchers are more efficient. As Dr. Levy put it, the companies are "not having to dig as many dry holes."

The Phase 3 study of Xalatan was relatively small, just 829 people. The company will not say what it spent on that study, or any other. But Dr. Stjernschantz, the project manager, said the total costs for all trials was significantly less than $30 million, an estimate that, a Columbia researcher said, Pharmacia provided to the university before the testing had begun.

Today, Xalatan is approved for sale around the world, from the United States to Japan, Australia and all across Europe. The key ingredient is still being manufactured at Chinoin in Budapest, although the Hungarian company has since become a subsidiary of Sanofi, the French pharmaceutical giant.

The Chinoin-Pharmacia partnership has been a profitable one. Chinoin is making a 50 percent return on its prostaglandin investment, company officials said. And Pharmacia pays Chinoin slightly more than $5 million a year for the manufacturing of latanaprost, said Tibor Szabo, who directs the prostaglandin business unit at Chinoin.

That amounts to roughly one one-hundredth of Xalatan's $507 million in annual sales last year. Or, to put it another way, the cost of making the key ingredient is just 1 percent of the revenue Xalatan generates.

April 5, 1998, Alice Dembner and the Boston Globe Spotlight Team, "Public handouts enrich drug makers, scientists," and April 5, 1998, "Private Profits from Public Funds:"
"The Globe looked at 50 top-selling drugs approved by the Food and Drug Administration over the past five years: 35 new drugs, which are bestsellers among those the FDA deemed most important or most unique, and 15 "orphan" drugs targeting rare diseases. Thirty-three of the 35 new drugs and 12 of the 15 orphans received money from the National Institutes of Health or the FDA to help in discovery, development, or testing."
March, 1997, CHI Research Newsletter, Vol. V, No.1, "Industry Technology has Strong Roots in Public Science."
CHI traced more than 45,000 references from U.S. patents to the underlying research papers, and tabulated both the institutional and financial origins of the cited science. We found that more than 70 percent of the scientific papers cited on the front pages of U.S. Industry patents came from public science -- science performed at universities, government labs, and other public agencies.

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