The Dr. Virga Podcast
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The Dr. Virga Podcast
The NIH’s Role in Drug Development
In this episode, we reveal how the National Institutes of Health (NIH) funnels your tax dollars to big pharma through the Bayh-Dole Act. Passed in 1980, the Bayh-Dole Act allows universities, small businesses, and non-profits to own inventions made with federal funding and license them to private companies. This has led to significant medical advancements, but also raised questions about who benefits the most.
The NIH has earned up to $2 billion in royalties from 34 drugs sold from 1991-2019. Often, NIH’s investment in drug development is comparable to or greater than that of the pharmaceutical industry. This raises concerns about whether public funds are truly serving the public or primarily boosting pharmaceutical profits.
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#BigPharma #NIH #BayhDoleAct #TaxDollars #Healthcare
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we blame Big Pharma for everything and I'm not here to defend Big Pharma I know we pretty much lost all confidence in Big Pharma during the Covid epidemic especially when it comes to the Covid vaccine because that was a fiasco but I think it's important that we recognize the fact that we watched science in real time a lot of us don't work at research institutes we're not necessarily familiar with all of the steps that go into becoming an FDA certified drug and what we wanted was we wanted these big companies to come out with the Covid vaccine in such a short amount of time drug development only takes years sometimes decades and we were asking them to do it in a matter of weeks again I'm not here to defend Big Pharma but I wanted to unpack the second part of what RFK said in the Sean Ryan Show during his interview during this interview Robert F Kennedy Jr mentioned something called the Bay Dole Act so let's start there with how we are going to unpack all of this and I'm gonna be honest with you the amount of controversy that I found during this research is so profound this shit show just keeps getting worse I don't know what it is and I don't know why I can't just hear somebody say something do a quick Google search and be done with it because it's during that quick little Google search that I just open a can of what the fuck so this is part 2 of a series that I didn't intend on starting to be completely honest with you guys I wanted to kick start this podcast by going through the things that I really enjoyed talking about like security and health and wellness and my weight loss journey and things that I thought would be be a value but then I stumbled upon this and I was like oh shit we need I need to make sure that everybody knows about this or at least they're somewhat familiar because I'm tired of hearing people politicians presidential candidates say some random shit and not know what the fuck they're talking about or when I look it up I'm like that's not something you can just brush past so during the Sean Ryan Show Robert F Kennedy Jr who is a third party presidential candidate made a couple of statements the first statement was about an herbicide called glyphosate which is cause is causing cancer or what he is saying is saying is that there's a really strong correlation between our use of this stuff and the number of cancer cases and the number of autism cases as a globe right we're seeing that the more we use this stuff the more cancer cases that we're seeing so I unpacked that in the first episode but this is what he said in the second half of that interview so let's start with the Bay Dole Act so the Bay Dole Act is also known as the patent and Trademark Law Amendments Act which was approved in the 1980s or in 1980 more specifically now the sponsoring senators were Birch Bay of Indiana and Bob Dole of Kansas and basically what they were saying is hey guys it's the 80s we're right now pulling ourselves out of the Vietnam War financially we're in a little bit of a recession we need money the government needs money and we have you know 28,000 patterns that we are owners of that through research that we funded that we're just sitting on only 5% of these patents have we licensed out to be you know you know further in research or to hit the market and basically what that means is it was a lot of money that the government was sitting on it was a lot of money to be made that the government wasn't doing anything about these patents have been accumulating since the Second World War so we have been sitting on this research and these patents for decades and Bay Dole was like we need money let's make some fucking money but what they meant was hey we had these patents let's sell them to Big Pharma that is essentially what they meant so let's unpack this even further so when we look at the US Code specifically as it relates to patent rights and inventions made with federal assistance that is essentially the Beidou Act is right what we're saying is we have federal funds through the NIH the National Institute of health taxpayer money congressional funds goes to the NIH the NIH then gives that money in two ways internal the NIH last which is intramural and extramural which is to universities and to you know research labs so when a university wants federal funding for a project they write up a grant proposal they submit it and they hope that they receive some sort of grant funding the NIH spends nearly $48 billion on medical research and 83% of that right 83% to a majority of that money is extra mural research it's research that's going out to medical schools and universities and non and other non profits right research institutions and then we have 11% of that that's going to the NIH themselves cause the NIH does have its own research institutions they have 6,000 scientists at its own laboratories majority of which are at at the Bethesda Maryland campus then we have the remaining 6% which essentially covers overhead right that's where the $48 billion goes most of it's going out of the NIH some of it staying in and then we have 6% to go so overhead this is extremely important it's gonna come up later because the shitstorm I discovered at the tail end of my research is why I was like hold the fuck on now here is where the Badal Act really comes into play so we have a lot of this money going for federal research all over the fucking place right across the country anytime any anybody that conducts research that wants to apply for grants from the federal government they apply to the NIH now with it when the Bay Dole Act went into effect and they and Dole were trying to get some money for the US government and they were like hey we're sitting on all these patterns what they realized was we can give these patterns to the people that are making the discoveries which makes sense so if you think about it they and Dole were like hey we have 28,000 patents can you imagine how many of these would already be licensed and how much money we would already be making if we just let the university or non profit or research institute who made the discovery and filed the patent if we let them kind of do some of that leg work now that doesn't mean that the NIH doesn't still own the pen but what it means is they're allowing these research institutions and whoever else to receive money in return so if someone develops a drug or a component of a drug that could be used they license it to Big Pharma and Big Pharma kind of like we'll take it from here guys and they do the rest of the research so that doesn't mean that they do all the clinical trials cause it in some of my reading I realized that the NIH does actually do some of the clinical trials but what that means is the research institutions are now incentivized right not only are you getting federal funding for your projects you are now also able to receive what I would call a kickback because you didn't pay for the research the government did you discovered something and filed a patent and now you're getting money from the licensing agreement the NIH does own what kind of like the negotiation rights for the licensing but can you imagine if you worked on a project you're the principal investigator at your research lab you discovered fucking something and now in the NIH sells that license and gives Johnson and Johnson Pfizer Merc Abbott right the NIH basically gives those big pharma companies a license to use that to use that patent and now you receive royalties on this multi million multi billion dollar deal that's fucking huge because I'm sure if you work at Johns Hopkins University or whatever and you were a part of this project you just got that university a ton of fucking money and what RFK is saying is that because of that the actual researcher the person in the lab is now also making money now their name is on the pattern so that kind of makes sense but this is how the NIH funding works the billions of dollars of the NIH gets that they give to other research institutions are used to develop drugs but here's the kicker why the fuck do I still have to pay for drugs right why do I have to go to the doctor and pay for my medication if my tax dollars are paying for the research that shit made no fucking sense to me and as a matter of fact that was actually a really big fucking issue which we're gonna touch on here in a second so now let's get into some of the research on research we have one cross sectional study that found that out of the 356 drugs approved by the FDA from 2010 to 2019 NEH spent $1.44 billion per approval on basic or applied research for products with novel targets or 599 million per approval considering applications of basic research to multiple products spending from the NIH was not less than industry spending with full cost of these investments calculated with comparable accounting meaning the NIH contributed pretty much the same as everybody else in terms of drug development and when you read that you're like okay at least we know the NIH isn't over spending but my thing was who fucking cares the NIH is not a Big Pharma company they're not getting their money from selling drugs they're getting their money from Americans from taxpayers so I was like that's something to fucking consider that means that the NIH is spending just as much money as Big Pharma to develop drugs but the NIH is doing the groundwork and then licensing what they've discovered to Big Pharma to kind of take the torch in this FDA drug development relay race so now I wanted to get into one other thing which is how much money has the NIH actually made from all of these licenses that they're putting out according to the G a O the Government Accountability Office the NIH received up to $2 billion in royalties from its contributions to 34 drugs sold from 1991 to 2,019 but here's the thing after the Bay Dole Act was went into effect the first drug to hit the market didn't happen until 1991 so it took 11 years for one of the drugs that kind of fell into this Bay Dole act now to hit the market and then for the NIH to actually make money from it so okay cool so we've made $2 billion in like 30 years now going back to the study they also said this evidence suggests the public sector makes substantial contributions the foundational knowledge on which drug approvals are based but less to patents or development conversely the industry is primarily responsible for product development and sponsored more than 99% of the product launches in this data set but basically what that means is the NIH is patenting almost fucking everything all of this is going somewhere I promise because there was a huge investigation done so all of these things that I'm mentioning are actually extremely important as it relates to this investigation by the Government Accountability Office this study continues to say that there is no theoretical basis for applying an equivalent cost of capital to government spending basically there is a little bit of a discounted rate as it relates to the US Office of management budget for government spending now all this goes to say is that given the evidence of the NIH funding for biomedical research stimulates rather than reduces private sector investment estimating NIH investment with a 3% discount rate may be most consistent with prevailing economic principles this shit is written like like a true budget research paper and that's fine but there are some concerns specifically about public health so public health experts and patients rights advocates have raised concerns about the prices of drugs developed with with federal support and now to me that makes sense and honestly before I read this statement in the G I O research which is something that I discovered toward the end of my kind of research saga it makes sense right taxpayer money you know being used to find research the research results in drugs being developed and then I also have to pay for the drugs so it's like why am I paying for the research if I still have to pay for the drugs and the NH says basically that like you know us paying for the research offsets the cost that's a 3 to 7% discount so it's like they're trying to make us believe that that spending billions of dollars on research is actually really good for drug development and also take this with a grain of salt because wow the NIH isn't consider the affordability of the resulting drug at least there is some research being done now not all research is going into just the symptoms although a majority of it is I see from what I've seen there's a lot less research being done on you know can we cure cancer can we cure the common cold it seems like a lot more research is being done on you know how do we help sniffles and how do we help runny noses and I'm not trying to minimize the actual research being done it is phenomenal work but I think that we have our site set on how we can help Big Pharma because if you ask me if I'm a if I'm a university and I'm getting federal funding to conduct research but I also have Big Pharma with their own goals and Big Pharma is working on these particular projects or Big Pharma is developing these particular drugs and I happen to have a research study you know being conducted that helps Big Pharma it would behoove me to take that federal funding to write grants for federal funding that goes towards the research study that I know I can sell to Big Pharma that makes fucking sense and because that makes so much sense there was actually a research study done on this and I'm gonna share this chart with you guys if you're watching on YouTube but it basically shows that the NIH marketed their research to the top 20 pharmaceutical companies in the country I mean we have Johnson and Johnson Pfizer Abbott Merc we have all these big companies that are essentially receiving our licenses and then they're developing drugs now Novartis is actually one of the biggest contributors to marketing drugs they're actually not a US based company they are based in Switzerland if I remember correctly and they brought over 13 drugs to market and a lot of those drugs or all of those drugs use some sort of NIH licensing and moving past that I mean I kind of talked about a lot of different things but they fall into each of these different segments so we have the Bay Dole Act which now allows federal grant recipients to profit off of any patents that they develop we have the NIH funding and how it works now the NIH has multiple different research buckets it's not just the NCI which is the National Cancer Institute there are other research labs within the NIH and then we have NIH and drug development NIH funded lab patents something patents a discovery they sell that discovery to Big Pharma in this relay race big Pharma then takes that discovery and runs with it to make a drug that's where we're at so far the problem with all of these things as I've already stated is that why are drugs costing so much money when they're receiving federal support I'm not the only person that kind of came to that conclusion there are a ton of public health experts and patients rights advocates who thought the same thing so many so that the Government Accountability Office launched an investigation and that ladies and gentlemen boys and girls is what I'm trying to get out here because the investigation just kind of like ripped open this can of whoop ass on the NIH and the NIH kind of revealed their true colors and maybe it's just because I just finished reading the Oscar wild novel The Picture of Dorian Gray but it just to me reading the statements made by the NIH just seemed so fucking evil and now I might be a little biased so please please read it for yourself and let me know if I'm fucking crazy and I shouldn't have taken it this way but to me the statements made were ridiculous you go to the G I O website to the link that I submitted there's gonna be highlights and snapshots don't you can read it but don't don't take it for what it says open the whole report it's 80 something pages it's an easy read cause you only write on half the page so skim through it and you're gonna see what I'm about to talk to you about right now what you're gonna find is that the G a O looked into the NIH and the department of health and Human Services and what they found is and this is a quote research conducted at the department of health and Human Services HHS labs LED to 4,461 US patents owned by the agency covering a range of inventions from 1980 they don't act right through 2,019 during that period the National Institutes of health the NIH had 93 patents which was only 2% of the total patents that contributed to the successful development of 34 drugs approved by the FDA and brought to market including vaccines and treatments for cancer these 34 drugs were developed by pharmaceutical companies that were associated with 32 licenses granted to them by the NIH so the pharmaceutical companies that developed these drugs had licenses from the NIH makes fucking sense because that's the NIH does so that's kind of what the highlights say on the Gao website they also go into what their recommendations are but before I get into the recommendations let's take a deep dive into the actual investigation that was conducted and honestly they did a really good job at this investigation they brought up a lot of the concerns that they received from the public from public health experts and from patients rights advocates the Gao starts this investigation off by stating that that the department of health and Human Services engages in technology transfer that you call it the Technology Transfer Office which I believe is like within the NIH which is a process of transferring scientific findings and intellectual property to other organizations for the purpose of further development and commercialization commercialization meaning meaning bringing the drug to market this includes the Covid vaccine this is one of the things that was funded by the NIH that license was given to Big Pharma Johnson and Johnson you know Pfizer those guys and then they developed the drugs again it was license to them the federal government made money right alongside Big Pharma here is where a lot of the concern comes in since the 1980s patients rights and consumer advocates have raised concerns about the price of drugs that include contributions made by HHS funded research including that funded by the NIH and the CDC for example the drug xyduvidine was developed as a human immunodeficiency virus or HIV treatment through joint efforts of the NIH's National Cancer Institute that's that NCI that I was mentioning and the pharmaceutical company that conducted clinical trials testing its safety and effectiveness after receiving FDA approval in 1987 the manufacturer set the launch price of the drug at $10,000 per patient per year which LED to public backlash that makes fucking sense and whatever you wanna think about the whole HIV epidemic in the eighties I do tend to lean towards a certain conspiracy theory but I won't get into that basically it's like we have this life saving drug and you guys are keeping it behind this monetary curtain that we can't pass once we can pay for it similar concerns have been raised related to contributions of HHS research to the anti cancer drug Taxol and most recently with Trivata for HIV prevention exposure prophylaxis which is prep that just tells me that this shit has been happening for a very fucking long time this is a very new investigation done by the G a O which doesn't make a ton of sense to me because if we're having this conversation about prep and and about HIV drugs in the late 80s it's like well why don't you guys stop this fucking problem then but I'll continue this G a O investigation also goes on to say that out of the $2 billion that the FDA has made since 1991 a lot of that money has come from just a few drugs as a matter of fact$100 million of each of these drugs which is gonna be things like Garticill Garticill 9 Prescobics Przysta Simtuza those five drugs made $100 million each for the NIH since the royalties of the NIH makes works just like the music industry right it's dependent upon sale so the more of this drug that sold the more the NIH makes and out of those 32 licenses that I mentioned earlier so 34 drugs 32 licenses out of those 32 licenses the royalty rates range from 1% to 10% they get from 1% to 10% of the sales and in total that came to the $2 billion now here's the kicker and I'm not gonna read these verbatim cause it is a lot the kicker for me was how much money the government subsequently spent on the same exact drugs through government programs like medicated Medicare but these are two different buckets of money we have the money going to NIH research from congressional funds and the kickbacks that they're getting but then we have another bucket of money which is the bucket of money for medicated Medicare so it's like even more of our taxpayer dollars are going to Big Pharma and I hate to say that and I hate to be a conspiracy theorist because I do think a lot of good has come from research has come from drug development but I just cannot sit here and justify the money that Big Pharma has made from the government so it's like when people say oh Big Pharma has this Congress person in their pocket to me now at this moment it makes so much more fucking sense because of Congress is determining whether or not a law passes it is determining whether or not the royalties are set is you know giving more money to the NIH whatever it is Big Pharma is profiting from it all they're getting our money from 25 different ways and we're sitting here trying to figure out how we're gonna pay for food and how we're gonna deal with inflation and how if I go to the doctor am I gonna be able to afford whatever they recommend and it's like that should not be the position that we are in considering billions of dollars are going into our healthcare system to help us and there's a lot of people and doctors and researchers that are trying to do good and there are a lot of really awesome drugs out there that do improve the quality of life for a lot of people but it's like the Big Pharma folks are just rolling in the dough and the dough is ours what really pissed me off though is the next couple of things that I read in the Gaos investigation first being that NIH officials stated that the public interest is served best when commercial entities develop the medical knowledge transferred from the NIH laboratories into medical products so basically the NIH officials are saying what's in the best interest of the American public is that we give our stuff to Big Pharma so Big Pharma can make the drugs that's what that fucking means and I don't know why that just doesn't sit right with me like I guess in theory sure if you've discovered something it's best to give it to a larger institution that can continue on the research and determine whether or not this thing can be brought to market and by determine I mean go through the FDA process so I mean I get it but for some reason it just irks me like it really just it's got me fucked up but then there's this part and this is the part that I was just like fuck you N I H according to N I H officials the agency's technology transfer office do offices technology transfer offices do not consider the price or affordability of a drug based on the agency's intellectual property for several reasons and they list a bunch of reasons most of which are just verbatim at a debate dull act saying that practical application doesn't mean that the NIH has any requirement to determine pricing and they go into like reasonable terms basically what this means is when the NIH is negotiating with these big pharma companies about who's gonna get their license they don't actually say okay we'll give this to you but whatever drug you come out with has to be affordable and the reason why they did that according to the NIH is that it limits the pharmaceutical company if we tell them that a drug has to be a certain price it limits what they can do and that makes sense because the price of a drug is dependent upon how much money really they put into the research and even though a lot of the foundational research is being done by the NIH Big Pharma still has to pay the licenses they still have to pay the royalties they still have to pay for the FDA process to bring that drug to market so it makes sense that the NIH doesn't want to stifle that process and doesn't want to limit these big pharmaceutical companies with by telling them okay this has to be a certain price now this G a O investigation does go into some kind of litigation practices and giving the NIH this fiduciary responsibility to manage American taxpayer money so sure the NIH is saying no no don't worry about it right we'll make sure that it's not too expensive but then this HIV drug drops at $10,000 per patient per year so it's like was did you think that wasn't that expensive have you looked at the media income of the American population and this is why I think the NIH needs to have some more oversight and I really do agree with RFK saying that he wants to go to the NIH and kind of ruffle some feathers because there is a lot that we don't know about for example the American public is not privy to licensing negotiations the NIH technology transfer officials told the Gao that they do not consider competition after the license agreement has been signed and did not know about FTC complaints that a company had engaged in anti competitive behavior while holding an NIH license that was about a particular incident with the drug tax all however did you fucking know that I assure didn't fucking know that for I know Britney Spears is on the news during this time which was 2003 like who the fuck knows right our attention was elsewhere but the NIH does not tell the public hey we're going into negotiations and I'm not seeing the American public should have too much of a say because a lot of us probably I know I don't really know what happens during those licensing negotiations but to me it sounds like we fucking should the G a O however did go to the N I H and say hey I said hey N I H how come you know why don't you make some of this stuff more public I think that would really ease the public's mind cause a lot of the people that are bitching and moaning to us right now really just don't know you know the N I H said good old boy N I H said that's too much work this is the exact statement that is in the Gao investigation report they said NIH official stated that providing additional information about licensing and related patenting activities would involve a significant effort that would further strain the agency's technology transfer resources so you're telling me that $48 billion is not enough you can't maybe kick that 6% you give yourself to 7% you can't give yourself an extra billion dollars to publish some shit on your fucking website you have to hire like two people are you kidding me you get $48 billion a year and you're saying that that's too much work anyway they go on to say while increasing the quantity quality and granularity of information would likely increase some cost it could reduce other cost okay we'll give you some credit for that statement one example is the cost of resources NIH dedicates to reviewing requests submitted under FOIA for the freedom of Information Act by members of the public who may seek information about licensing that NIH does not publicly does not make publicly available okay so you could decrease the cost that you spend in hiring some fucking intern to answer for your request give that intern another fucking job right have him put this information on the fucking website or put this information together yes you could cut costs but to say that it would involve a significant effort and would further strain the agency's technology transfer resources maybe this is just a New Yorker at me and I'm gonna remove my professional hat right now but if they said that shit to me I would tell him to go fuck himself but I can't say that to them the way I say that to them is by pushing for my elected officials to put pressure on the NIH if you wanna continue spending $48 billion getting royalties from Big Pharma I wanna know more about it because right now I don't know anything about it and that to me is a problem considering a big chunk of money is going to you now I know this seem like a bit of a Tangent but that is what happens when you unpack a simple statement like there is this thing called the Bay Dole Act and when you accuse the NIH of making money from things like the Covid vaccine that is that's something to unpack now I didn't look specifically at how much money the NIH made from the Covid vaccines themselves but it does seem like they're making a ton of fucking money and to be to be completely honest I'm pretty sure a majority of these financial documents on NIH budget and spending they're pretty old so we really have to wait for the newer stuff to come out to really see you know how much in royalties the NIH making from these things and really where did that money go did it go to NIH institutions did it go to universities or did it go directly to Big Pharma these are questions that we should be asking I am not going to do another part of this but if you guys did like this kind of content I have no problem jumping down the rabbit hole and recurgitating kind of some of the main facts consolidating all of my research and making that available to you with that being said I'll see you guys on the flip side
