Report: U.S. Spent Big on Cancer Drug

The U.S. government spent hundreds of millions of dollars helping develop Taxol, the bestselling cancer drug ever, but failed to get the money back for taxpayers, a government report issued Friday said.

Drug maker Bristol Myers Squibb earned $9 billion from Taxol, which has been used to treat 1 million cancer patients, but the National Institutes of Health, or NIH, got back only $35 million in royalties, the U.S. General Accounting Office report found.

Medicare, the cash-strapped state-federal health insurance plan for the elderly, paid $687 million for Taxol over five years -- triple what other federal programs paid for other widely used cancer drugs, the GAO found.

“NIH’s financial benefits from the collaboration with Bristol-Myers Squibb have not been great in comparison with BMS’s revenue from the drug,” the GAO said in its report, released by Sen. Ron Wyden (D-Ore.). “The federal government repeatedly dropped the ball,” Wyden told a news conference. “Their analysis shows that to this day they may be clueless about what makes drugs affordable.”

But the NIH said it considered Taxol one of its success stories, and said the U.S. public benefited in ways that cannot be counted in dollars.

“Without the NIH investments in the basic science of paclitaxel [the scientific name for the compound in the drug Taxol], its anti-cancer activity may never have been developed and the over a million people would have been without a key weapon in their fight for life,” the NIH said in a statement.

The NIH does the early research on many drugs and then licenses them to companies to develop for market.