What Could Senator Warren's "Swear Jar" Bill Mean For Pharma's Image?

By Anna Rose Welch, Editorial & Community Director, Advancing RNA

President Obama’s recent State of the Union speech addressing precision medicine wasn’t the only government initiative to hit headlines recently. Massachusetts’ senator, Elizabeth Warren, recently proposed what she has dubbed the "swear jar" bill, aka the Medical Innovation Act, which would require big, law-breaking drug makers to send 1 percent of each blockbuster’s annual profits to the NIH for research.

Warren stresses this bill is not a tax, nor would it be in effect for small or medium-sized companies. However, she sees it as a proper punishment for the “biggest and most successful” drug companies that are convicted and fined for defrauding Medicare or Medicaid, withholding necessary safety information, and/or plying doctors with kickbacks for prescribing certain drugs. And according to the National Journal, federal government fines have cost the pharma industry quite a bit: from 2007 to 2013, drug companies shelled out $13 billion in settlements.  

“Between…shrinking government support for research and increased rule-breaking by companies that have blockbuster drugs lies a solution: requiring those big-time drug companies that break the law to put more money into funding medical research,” says Warren. She expects that, had this bill been in place over the past five years, the NIH would’ve seen a 20 percent increase in funding — roughly $6 billion more a year, which could have been put towards additional research grants.

The bill has already spawned dissent from PhRMA, which says, “The National Institutes of Health plays a vital role in basic research and early discovery, and we support sufficient federal funding for their work. But pursuing misguided policies that siphon funding from the groundbreaking medical research happening in the biopharmaceutical industry will have devastating consequences for patients and society. The proposed legislation would result in fewer medicines for patients and lost jobs at a time when our economy can least afford it.”

However, I’m less interested in debating the merits or faults of the proposal, either as a financial penalty or as a tool to increase dwindling R&D funding. I’m more interested in the language Warren used to justify her decision. As Warren said in her statement, “We celebrate the accomplishments of our pharmaceutical industry, because these blockbuster drugs let people live longer, healthier lives. But we are also mindful that these companies did not do it alone."

Many of the blockbuster drugs that have been put to market and have brought in billions in revenues were the product of government-funded research. Of course, government funding is a broad term, which as a whole is made up of funds received from a variety of sources. However, one of the sources providing the government with money is the public, which helps fund research by paying taxes, by contributing to a research organization, or by buying a company’s product, according to University of California, Berkley.  

Warren’s statement about how the pharma industry didn’t achieve its blockbusters alone paints pharma’s work as that of an entire nation — a country that is made up of patients that have, in some way or another, been affected by the pharmaceutical industry at least once in their lives. This is a familiar form of rhetoric for Warren, which was a key part of her campaign in 2012, various media outlets have reported.  

However, rhetoric aside, pharma has set its sights on becoming a more patient-centric industry. The goal is to realign drug development to make the patient a drug development partner. But a lot of the struggle is also to ensure that patients view the industry itself as a patient-centric entity and partner. Patient-centricity is just as much a key to carry drug development into the future and boost patient quality of life as it is a branding opportunity.

Whether or not this bill even makes it to the President’s desk, Warren’s mindset could be a valuable one for pharma in its work to make and keep the patient a central player as business continues pressing forward.