TEXT ON SCREEN: April 12, 1955

ARCHIVAL: (MYFOOTAGE.COM, 1962):NEWSREEL: An historic victory over a dread disease

NARRATION: When Jonas Salk developed the polio vaccine.

ARCHIVAL (MGM, 04-12-55):NEWSREEL: The Salk vaccine against crippling polio has proved to be a sensational success.

NARRATION: He famously opposed the idea of patenting and profiting off the discovery.

PETER SALK: They werent in this for making money. It just didnt interest him.

NARRATION: Today, patents and profits have become central to the development of innovative drugs.

LORI REILLY: Without patents companies wouldnt have the incentive to bring a medicine to market.

NARRATION: But with skyrocketing drug prices making headlines

ARCHIVAL (CBS 10-10-11):ANCHOR: In recent months the price shot up almost 5000%.

MICHAEL DAVIS: They are priced disastrously, almost criminally, too high.

NARRATION:..has the system designed to bring innovative drugs to market shortchanged the very people its supposed to help?

BARBARA HISER: I think the public is not aware of all the stuff that goes on. Its not right. Its not fair.


NARRATION: When the polio vaccine was rolled-out in 1955, Dr. Jonas Salk, the scientist who developed the drug with funding from the March of Dimes, became an overnight celebrity.

ARCHIVAL (MGM, 04-12-55): NEWSREEL: And the entire world heralded the discovery, which assured an end to one of mankinds most dreaded diseases.

PETER SALK (PETER L. SALK, M.D., PRESIDENT, JONAS SALK LEGACY FOUNDATION): Following that, Ed Murrow, who had a television program interviewed my father and one of the questions he asked was:

ARCHIVAL (CBS, 1955): EDWARD R. MURROW: Who owns the patent on this vaccine?

JONAS SALK: Well, the people I would say. There is no patent.

PETER SALK: If you look at the original tape of that interview, theres a moment where theres sort of a little bit of-of pausingAnd he thought for a moment, and then you could see the expression on his face just-just light up. He said:

ARCHIVAL (CBS, 1955): JONAS SALK: Could you patent the sun?

PETER SALK: He just saw this as, this was just a natural evolution of science. The results belong to the people.

DR. MARCIA ANGELL (FORMER EDITOR IN CHIEF NEW ENGLAND JOURNAL OF MEDICINE): Well thats the way it was in those days. Scientists had the view that you could either do well or do good but that it was tough to do both.

ARCHIVAL (ABC, 10-18-82): REPORTER: AIDS is the most serious epidemic to strike this country since the polio epidemic of the 1950s.

NARRATION: By the time another public health crisis hit America, three decades later

ARCHIVAL (CBS, EVENING NEWS, 12-10-82): DAN RATHER: The often dreaded disease was unknown five years ago.

ARCHIVAL (ABC, 10-18-82): ANCHOR: Doctors now say its a national epidemic.

NARRATION the pharmaceutical industry had changed dramatically. The costs of research and development had soared, and drug development, with expensive clinical trials, had become increasingly reliant on investment.

Jonas Salk was interested in trying to develop an AIDS vaccine when he was approached by a venture capitalist and asked to collaborate and form a biotech company.

KEVIN KIMBERLIN (CHAIRMAN, SPENCER TRASK & CO.): My job was to finance the company. To start on an ambitious effort like the one we did with Dr. Salk, to get the best people working on this, you need to give them the opportunity that this is not going to just be a puff of smoke or a tumbleweed thats just going to blow away.

ARCHIVAL (ABC, 6-14-91):PETER JENNINGS: Salk began to experiment with a vaccine using the AIDS virus itself.

KEVIN KIMBERLIN: Patents are fundamental to that process. This was not a charity.

NARRATION: And so, Jonas Salks company ended up filing several patents on a potential AIDS vaccine.

PETER SALK: Its not what my father wouldve chosen. Different world, a different reality.

NARRATION: Today, the pharmaceutical industry has evolved into a trillion-dollar business.

LORI REILLY (EXECUTIVE VICE PRESIDENT FOR POLICY & RESEARCH, PHARMACEUTICAL RESEARCH AND MANUFACTURERS OF AMERICA (PHRMA)): Its clear any for-profit company has to answer to both investors and it has to answer, in our case, to patients, as well.

NARRATION: In 2004, Barbara Hiser was diagnosed with a rare form of cancer called chronic myeloidleukemia.

BARBARA HISER: When my oncologist told me what the diagnosis was, my first question to him was, How long am I going to live? And he said, Up until about three years ago, you wouldve had three to five years to live, but, he said, now we have this new drug and, he said, youre not going to die from leukemia.

ARCHIVAL (NBC, 9-22-10): ROBERT BAZELL: Gleevec has been hailed as a real life cancer-fighting miracle. But this pharmaceutical marvel has a drawback that is becoming increasingly important in the worsening economy.

NARRATION: Gleevec had a list price of around $26,000 a year when the drug came on the market in 2001. Hiser was getting a deep discount from the manufacturer Novartis. But in 2012, after she changed insurance companies, her costs went up.

BARBARA HISER: So I called to renew my drugs and the operator said Im going to charge your credit card $5,000. And I said What? At that time, I said to my husbandI said, You know, I feel like Im being faced with the choice of either keep our house and keep the lifestyle that we have, or stay on Gleevec. We couldnt do both.

NARRATION: Today, the price of the drug can run to more than $100,000 a year, earning Novartis around $4.7 billion in sales in 2015.

Hiser says the price is outrageous, especially considering that some of the cost of researching and developing Gleevec was paid for with federal funds.

BARBARA HISER: When my money goes to help fund the development of it, and then theyre going to turn around and charge me exorbitant prices that I cant afford, then there is something wrong with that.

LORI REILLY: I think its important to look at the advancements that weve gotten and ask whether or not those advancements would have occurred without a for-profit industry.

NARRATION: But over the past few decades, innovative drugs have increasingly stemmed from federally-funded research. Thats because of a little known law called the Bayh Dole Act.

MARCIA ANGELL: This law changed everything.

NARRATION: This 1980 law allowed researchers who made discoveries funded by public institutions like the National Institutes of Health to license their patents to private companies who could develop and market new drugs.

LORI REILLY: Despite the fact that America was investing a significant amount in research and development dollars, only five percent of patents were ever getting used by the private sector because there was uncertainty around those patents. What the Bayh-Dole Act really did was cause a transformation in terms of the ability of the private sector to utilize that research in the hopes of bringing in new product to market.

MARCIA ANGELL: That one law said to the big drug companies: you can market drugs, but you dont have to come up with your own, original, innovative drugs. That will be done with NIH dollars. And thats exactly what has happened. But do they have a right to be rewarded as though they were the innovators?

NARRATION: And, she says, the problem with pharmaceutical pricing today extends beyond drugs.

ARCHIVAL (NBC, 8-25-16): LESTER HOLT: A growing firestorm about the soaring cost of the potentially life-saving EpiPens.

ARCHIVAL (CBS, 8-23-16): ANCHOR: The price of EpiPens has skyrocketed.

NARRATION: Mylan Pharmaceuticals licenses the patent on EpiPen a special syringe whose precursor was originally developed with public funds at the Department of Defense that injects epinephrine, or adrenaline, to treat life-threatening allergic reactions.

ARCHIVAL (NBC, 8-29-16): REPORTER: Over 10 years, the EpiPen has gone from $100 to $600.


NARRATION: So Jim Duren led a team at King County Emergency Medical Services that developed a less expensive way of administering the drug.

JIM DUREN: It would only take about $10 worth of equipment, plus $5 worth of epinephrine to put a package together. We developed a kit what we call the Check and Inject kit. So, inside the kit we have our little check sheet, two safety syringes and then your bottle of adrenaline.

NARRATION:King Countys emergency services are saving more than $300,000 a year with this alternative kit. And emergency services around the country are now buying kits or learning how to make their own as an alternative to Mylans EpiPen.

ARCHIVAL (NBC, 8-25-16): HEATHER BRESCH (MYLAN CEO): We are going to continue to run a business and we are going to continue to meet the supply and demand of whats out there.

NARRATION: The complaints against high prices have risen

ARCHIVAL (NBC, NIGHTLY NEWS, 2-14-16): REPRESENTATIVEELIJAH CUMMINGS (D-MD): Its not funny, Mr. Shkreli. People are dying. And theyre getting sicker and sicker.

NARRATION: particularly with some drug companies making record profit margins

ARCHIVAL (CNN, 8-24-16):SENATOR AMY KLOBUCHAR (D-MN): Weve seen these prices creep up and up every single year for so many drugs.

NARRATION: and some have pointed to another provision of that 1980 Bayh-Dole law, which allows federal authorities to march in and take over the patent of a publicly-funded drug in extenuating circumstances.

MICHAEL DAVIS (PATENT LAW PROFESSOR, CLEVELAND STATE UNIVERSITY): The Bayh-Dole Act says the patent has to be made available to the public on reasonable terms. If the patent, drug, or whatever else it was, wasnt sold at a reasonable price to the public the government could march in and lower the price.

LORI REILLY: Theres no history at all that it was intended to address drug prices. I would argue that if march-in rights are used to address drug prices and the government could come in and, and either give license to someone else or try and control the price, it would undo the positive influence and the positive aspects of the Bayh-Dole Act.

NARRATION: The NIH has declined to use the march-in rule for drug pricing, despite six petitions to apply it to high-priced drugs for such diseases as AIDS and cancer.

Barbara Hiser says she is not waiting for the government to solve her drug price problem.

BARBARA HISER: Ill be honest with you the drug that I take has a generic that comes out of India, but that generic is not legal in this country.

NARRATION: Since the Indian version costs a small fraction of the drug price in the US, Barbara has started ordering her pills directly.

BARBARA HISER: When I get my-my shipment, I almost feel like Im looking over my shoulder to open it up. I feel like a law-abiding citizen has become a drug importer. And that doesnt feel very good.

NARRATION: But she says she risks it, since its the only way she could afford her life-saving medication.

BARBARA HISER: If I were doing it the traditional route, I would pay $1,300 out of pocket. Going through India it comes to about $250 for a months worth.

PETER SALK: We have to remember that there are people on the other end of this, and that we not end up depriving people of life saving medications.

BARBARA HISER: The reasons that I cant get it at a reasonable price from my neighborhood drug store, are all political. And that stuff needs to be fixed.

PETER SALK: There was a phrase that my father used: Which is more important, the human value of the dollar, or the dollar value of the human? Somehow in this complex world we have to find the mix between the two.