‘Paying Twice’: A Push for Affordable Prices for Taxpayer-Funded Drugs

The output of the health institutes is growing, along with its budget. Congress has increased funding for the agency by 23 percent in the last three years, to $37 billion, fully expecting that it will contribute to new cures.

Health policy experts who met with N.I.H. officials in January urged the agency to reconsider its position on the pricing of drugs developed with federal funds. “We applaud them for taking the time to meet with us, but they showed little appetite for tackling this admittedly vexing problem,” Mr. Sarpatwari said.

The health institutes contributed to published research that was associated with every one of the 210 new drugs approved by the F.D.A. from 2010 to 2016, according to a study this year in the Proceedings of the National Academy of Sciences.

Dr. Fred D. Ledley, a professor at Bentley University in Waltham, Mass., and an author of the study, said that 84 of the 210 drugs were “first in class,” meaning first in a new class of drugs to treat a particular disease.

The views of government scientists are shaped by their experience.

At the height of the AIDS crisis, federal health officials tried to impose “reasonable pricing” terms on drugs developed with N.I.H. technology, and their experience soured them on the idea.

When the F.D.A. approved the first drug to treat AIDS in 1987, doctors and patients expressed alarm at the price, $8,000 to $10,000 a year for a patient. In 1989, the government added a clause that required “reasonable pricing” when it provided an exclusive license to a drug company to develop commercial products using N.I.H. technology.

In 1995, after extensive study and two public hearings, Dr. Harold E. Varmus, who was then the director of the health institutes, dropped the reasonable pricing clause. “One has to have a product to price before one can worry about how to price it, and this clause is a restraint on the new product development” that the public wants, he said then.