WASHINGTON – Veterans are missing out on a cure for hepatitis C because of the cost of the drug – a drug that a Department of Veterans’ Affairs research employee created.
Raymond Schinazi, a previous VA research employee, worked for the agency for over 25 years. While employed with the VA, he claimed ownership of the drug sofobuvir, a drug reported to cure 99 percent of patients with Hepatitis C.
Schinazi, who has a doctoral degree in chemistry, teaches at Emory University. In August, the Schinazi won the VA’s highest honor for biomedical research.
Rep. Jeff Miller, R-Fla., House VA committee chairman, said the committee asked Schinazi testify at Wednesday’s hearing on Jan. 20. He said Schinazi filed for retirement the next day. He did not testify.
“This drug, reportedly developed by a VA employee resulted in an $11 billion sale, a $444 million personal profit from that VA employee,” Miller said.
Miller said Schinazi was a 7/8 VA employee, meaning an eighth of his time was spent on work other than VA research. Schinazi sold his company, Pharmasset, to Gilead after the drug was invented.
More than 200,000 veterans have been diagnosed with hepatitis C. The drug used to cure hepatitis C costs the VA $40,000 per veteran, or $8 billion to treat all veterans who have been diagnosed, Miller said.
“Veterans deserve the right to reap the benefits of those inventions, given the fact they were created by employees and the taxpayer resources specifically designed for their use,” he said.
Rep. Mike Bost, R-Ill., said the case is still pending, but he trusts those in charge at the VA to look into the problem.
He said with Southern Illinois University Carbondale being a research university, he understands how costs should be split.
“To develop a drug at this level, and then all of a sudden reap the benefits of it to the level that he did and then immediately quit once discovered, it’s questionable at best,” he said.
Bost said the VA cannot allow someone to rip off taxpayers and those who need the drug.
“It’s almost like murder by charging them this much, then for one person to reap such a large benefit for something that we, the taxpayer, paid a majority of the price for,” Bost said.
Dr. David Shulkin, undersecretary for health for the VA, told the committee that he is going to get to the bottom of the problem.
“I am asking for a review of all of these facts, and should there be anything that comes out of that review where we have violated the policies or procedures including disclosure or anything else, we are going to take full rights to make sure VA does get proper ownership,” he said.
Shulkin said he wants to review all of the information to restore his confidence and that of Congress in the VA’s procedures and internal controls.
“Today I cannot tell you that we have the right internal controls in place. We absolutely have internal controls, I just can’t tell you that they’re robust enough and that they’re working well enough,” Shulkin said.
Miller said the VA invests $1.8 billion a year in research, but in 2014 the agency had 304 inventions, 25 patents and 15 licensing agreements. He compared this to the USDA which has a billion dollar budget and had 117 inventions, 119 patents and 412 licensing agreements in 2014.
“I think these lost opportunities should serve as a lesson to be learned by everyone,” Shulkin said. “The VA should be supporting and developing the program so that no other potential opportunities are lost.”
Reach reporter Tia Rinehart at [email protected] or 202-408-1490. SHFWire stories are free to any news organization that gives the reporter a byline and credits the SHFWire. Like the Scripps Howard Foundation Wire interns on Facebook and follow us on Twitter and Instagram.
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