Taxpayers finance cancer drug, but the profits will be private
NY TIMES reports: Kite Pharma, led by Dr. Arie Belldegrun, could be the first to market next year with a highly-anticipated immunotherapy treatment which harnesses the body’s immune system to attack cancer. This is key in treating cancer and the NY Times reports that immunotherapy has rescued some patients from near-certain death.
Kite’s treatment form of immunotherapy, CAR-T, was developed by a federally-funded (aka your tax $ funded them) team of researchers at the National Cancer Institute. Kite Pharma pays millions to the National Cancer Institute (reminder: funded by your tax $ money ) to support research and patents dedicated to the company, this is how Kite sells products like CAR-T. The NY Times reports that analysts expect Kite to charge at least $200,000 for CAR-T, which is intended as a one-time therapy for patients.
Here’s the process broken down for more kinesthetic thinkers:
- The American people pay (in taxes) to fund the National Cancer Institute cancer treatment.
- The National Cancer Institute uses the tax money to fund research to create treatments like CAR-T.
- Pharmaceutical companies like Kite Pharma pay money to the National Cancer Institute (and thus the government, since the National Cancer Institute is a federal institution) to essentially buy patents and/or other government support.
- Kite Pharma then sells the drugs and treatments (like CAR-T) back to the American people (who funded the initial development of the treatment to begin with).
The issue here is that many taxpayers feel that they are paying twice for the same drug – because 1) their initial tax dollars funded the research and development of the drug and 2) they have to buy the drug when federal partners like Kite Pharma sell it back to the public for, what patients feel are, questionable prices. Meanwhile, Kite Pharma as a corporation reaps all the financial profits despite American people funding the initial research and development.
However, others feel that the financial support companies like Kite Pharma provides to the government for developments like CAR-T is fair and that companies can deliver treatment to patients in ways that the government cannot do by itself. Therefore, they deserve what they feel is a fair share of profits.
My opinion:
Since the American people at-large agree that curing cancer, we support this by funding research and developments for cures and treatments, and the American people are the consumers (buyers) of the treatments, citizens should receive proper value for their contributions and role in the drug creation process. The government has leverage to hedge better deals for the American people, where extremely ill patients aren’t being charged $200,000 or other unaffordable fees for life-saving drugs (that they initially funded, might I add, again).
Government has the leverage to influence prices because companies like Kite Pharma rely on the legitimacy of publicly funded universities and academic labs for their own research and development. Also, by law the National Institute of Health (a government institution), the parent of the National Cancer Institute, has “march-in rights” which gives them power to take back control of a patent on an invention made with federal funding (like CAR-T) if the drug is not being made available to the public on “reasonable terms”. Therefore, the government can insist on fairer prices for the American people.
However, the money companies like Kite Pharma pay to the government for support and patents from taxpayer-funded institutions like the National Cancer Institute could possibly be going straight into the pockets of a myriad of pro-Pharma politicians in Congress who seek to capitalize on desperately-ill American citizens by allowing companies to charge unreasonable prices for widely unavailable life-or-death drugs. It’s a lucrative supply-and-demand model that some pharmaceutical multinational corporations utilize to exploit hundreds upon thousands of humans overseas in many countries in Africa, Asia, and in poverty and health-stricken countries like India.
It’s alarming that the American government sees fit that the Pharmaceutical industry be given this much power in America, in any capacity. It’s all in the name of corporate profit. Theoretically, corporations reward their actors in the government with gracious gifts and donations. I mean, after all, they have the money to do so if they plan on charging immunotherapy patients $200,000 for a life-or-death treatment. Theoretically.