REBECCA E. WOLITZ
Historically, the United States has been the largest public funder of biomedical innovation in the world, yet public contributions to drug research and development (“R&D”) often fail to translate into affordable medications. The Inflation Reduction Act presents an opportunity to reconsider the relationship between public funding and public returns by requiring the consideration of federal funding as a factor in the Medicare Drug Price Negotiation Program (“MDPNP”). However, neither the statute nor agency guidance articulate clear normative principles for what the public is owed based on our contributions to drug R&D. This Article makes two key contributions. First, it offers an original scholarly analysis of the MDPNP’s “prior Federal financial support” factor, critically examining the program’s treatment of federal funding in fair drug pricing. Second, it valuates a range of fairness principles and argues that policymakers should adopt a principle of proportionality as the default for allocating benefits from public contributions to drug R&D. By establishing a default in favor of proportional fairness, this approach ensures that public returns are meaningfully aligned with public contributions, flexibility is maintained to protect biomedical innovation, public confidence in institutions can be bolstered, and what we—the public—are owed is better secured. This Article charts a path toward a more equitable and accountable recognition of public contributions to privatized medical innovations within existing agency authority.