RESEARCH LABS TARGETED BY GOVERNMENT PROBE

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: TUESDAY, February 9, 1993                   TAG: 9302090030
SECTION: BUSINESS                    PAGE: A-7   EDITION: METRO 
SOURCE: Associated Press
DATELINE:                                 LENGTH: Medium
RESEARCH LABS TARGETED BY GOVERNMENT PROBE
The head of the National Institutes of Health has ordered a review of marketing agreements between drug companies and research labs that receive federal funding, officials said Monday.
The latest backlash against rising drug prices stems from lawmakers' concern about what drug companies charge for medicines that taxpayers helped pay to develop.
NIH Director Dr. Bernadine Healy called for the review but had no more details, spokeswoman Johanna Schneider said from NIH headquarters in Bethesda, Md.
The move follows publicity surrounding an alliance announced in December between Sandoz Pharmaceuticals Corp. and the Scripps Research Institute of La Jolla, Calif., in which Sandoz is to provide Scripps with $300 million over 10 years in exchange for first rights to Scripps' medical discoveries.
The government provides more than 75 percent of Scripps' research money, about $90 million a year.
The Scripps-Sandoz agreement prompted Rep. Ron Wyden, D-Ore., to write last week to Healy complaining that Sandoz would be free to determine the price of any drugs that result from the collaboration, even though they were derived from government-subsidized research.
"The taxpaying consumer gets bumped twice in the form of paying for a highly subsidized drug at a highly inflated cost," Wyden said.
Government money induces researchers to develop lifesaving drugs. By some estimates, up to half of the most promising AIDS and cancer drugs are under development in government or university labs.
Sandoz, the U.S. arm of Sandoz Ltd. of Basel, Switzerland, has noted that the money it invests in Scripps beginning in 1997 will go toward basic research and there is no guarantee any products would result.
Sandoz, in a statement issued from its headquarters in East Hanover, N.J., said it was "aware of our responsibility as to the pricing of any drug that eventually may be commercialized as a result" of the collaboration.

by Archana Subramaniam by CNB