Senator Proposes 'Swear Jar' for Drug Companies

A bill slated for introduction in the United States Senate would generate funding for medical research by adding a new penalty for drug companies that break the law.

A bill slated for introduction in the United States Senate would generate funding for medical research by adding a new penalty for drug companies that break the law.

Sen. Elizabeth Warren (D-Mass.) plans to introduce the “Medical Innovation Act,” in the coming days. The bill would add a new wrinkle to the settlements pharmaceutical firms make with the government when they violate laws or regulations. In addition to any regular fines, the drug companies would be required to make a payment to the National Institutes of Health. The payment would be equal to a “small portion” of the profits the company has made as a result of federal research investment.

“It’s a swear jar—but it’s also a simple form of accountability,” said Warren, in Jan. 22 remarks. “Instead of letting companies that break the law get off with a slap on the wrist, the Medical Innovation Act will make sure they pay up in a way that really makes a difference.”

Warren says that if the policy were in place over the past 5 years, NIH would have received an additional $6 billion each year, roughly a 20% increase. However, Warren insisted the new revenue isn’t a tax.

“It is simply a condition of settling to avoid a trial in a major case of wrongdoing,” she said. “If a company never breaks the law, it’ll never pay the fee.”

She also noted that companies who choose to forgo a settlement and take the case to trial also won’t be subject to the fee, even if the company loses at trial.

It’s unclear whether Warren’s bill has any chance of passing in the Republican-controlled Senate, or whether it’s simply a shot across the bow at companies that run afoul of federal law. The Senate’s GOP leadership has thus far emphasized other healthcare priorities, such as a desire to alter or repeal the 2010 Affordable Care Act.

In her comments, Warren said she knows it will be difficult to pass the bill, but she is optimistic Democrats and Republicans “will be able to come together to support this idea.”