Economic considerations in cooperative research and development agreements (CRADA): The case of Taxol, NIH, and technology transfer

The General Accounting Office (GAO) of the U.S. Congress released a 2003 report examining the legal and financial issues by the National Institutes of Health (NIH) in the technology transfer of Taxol, a cancer treatment drug, which was commercialized quickly by Bristol-Myers Squibb (BMS). The GAO concludes that the 1991 cooperative research and development agreement (CRADA) transferring Taxol to the private sector met an NIH primary goal of facilitating the transferring of discoveries to the patients’ bedside: by 2001, Taxol had become the best-selling cancer treatment drug in pharmaceutical history. Nevertheless, criticism of NIH's concern for economic and financial considerations when the agency negotiates CRADAs has generated the following four policy recommendations: (1) recognize reasonable pricing as good corporate citizenship; (2) encourage multiple partner CRADA applications; (3) require lowest federal fee schedule for all government purchases; and (4) calculate a royalty payback fee that covers NIH investment.