Elizabeth Warren: How about a ‘swear jar’ for drug companies?

Sen. Elizabeth Warren (D-Mass.) turned her fire from Wall Street to large pharmaceutical companies on Thursday, unveiling a bill to make big drug companies pay into a fund for medical research when they reach a settlement for law-breaking.

Warren’s bill, the Medical Innovation Act, would require large drug companies that reach a settlement with the government for breaking the law to pay a “small portion” of their profits over five years into a fund for research at the National Institutes of Health, and the Food and Drug Administration.

“It’s like a swear jar: Whenever a huge drug company that is generating enormous profits as a result of federal research investments gets caught breaking the law — and wants off the hook — it has to put some money in the jar to help fund the next generation of medical research,” Warren said.

{mosads}The bill is necessary, Warren said at the Families USA Health Action conference in Washington, because “Congress has been strangling the funding needed for medical research.”

Warren, a hero on the left for her criticism of big banks and a “rigged” economy, aimed some of her populist rhetoric at the big pharmaceutical companies. 

“It seems that the biggest drug companies are increasingly playing by a different set of rules than everyone else,” Warren said. “The government has kicked thousands of small- and medium-sized physician practices out of the Medicare program for fraud, but not one of these major drug companies has ever been kicked out.”

She said even the largest drug company settlements, as much as $3 billion, are not enough to deter the behavior. 

“Fines for big drug companies have increasingly just become another cost of doing business,” she said.

The provisions in her bill would only apply to companies that reach a settlement with the federal government for breaking the law and that sell “blockbuster drugs” with more than $1 billion in annual sales.

If the bill had been law over the past five years, Warren said, the NIH would have had almost $6 billion more in funding per year, about a 20 percent increase. 

“With too many in Congress willing to sit by and watch the NIH starve, and too many in the pharmaceutical industry willing to make a quick buck by breaking the law, it’s easy for cynicism to set in,” she said. “And it’s easy for us to forget the commitments that we’ve all made to each other.”