National Institute of Arthritis and Musculoskeletal Diseases Act of 1985

National Institute of Arthritis and Musculoskeletal Diseases Act of 1985 - Amends title IV (National Research Institutes) of the Public Health Service Act to establish a National Institute (Institute) of Arthritis and Musculoskeletal Diseases in the National Institutes of Health (NIH). Redesignates the existing National Institute of Arthritis, Diabetes, and Digestive and Kidney Diseases as the National Institute of Diabetes and Digestive and Kidney Diseases.

States that the Institute shall conduct research and related activities concerning arthritis, musculoskeletal diseases and skin diseases. Requires the Director of the Institute, with the advice of the National Arthritis and Musculoskeletal Advisory Council, to establish a national plan to coordinate such activities.

Establishes within the Institute: (1) the National Arthritis and Musculoskeletal Diseases Data System; and (2) the National Arthritis and Musculoskeletal Diseases Information Clearinghouse. Authorizes appropriations through FY 1988.

Establishes within the Institue: (1) an Arthritis and Musculoskeletal Diseases Interagency Coordinating Committee; and (2) a Skin Diseases Interagency Coordinating Committee. Requires annual reports to the Secretary of Health and Human Services and to the Director of NIH.

Establishes within the Institute a National Arthritis and Musculoskeletal Diseases Advisory Council.

Authorizes appropriations through FY 1988 for arthritis and musculoskeletal demonstration projects and multipurpose disease centers.

Requires the Institute to submit a biennial report.

Transfers arthritis-related functions (including data system, advisory functions, coordinating functions, demonstration project, and multipurpose center), funds, personnel, and assets to the Institute from the existing National Institute of Arthritis, Diabetes, and Digestive and Kidney Diseases. Requires the secretary to report to the appropriate congressional committees and to the Comptroller General within 60 days regarding such transfers. Requires the Comptroller General to report to the appropriate congressional committees within 80 days regarding such transfers.

Terminates the National Arthritis Advisory Board.

Makes conforming amendments.

Requires the Secretary, through NIH, to conduct a study of the existing combinations of disease research programs within the institutes and of the standards to be followed in establishing new or realigning existing institutes. Requires a report to the appropriate congressional committees within 18 months. Prohibits the establishment of any new institutes within six months of such report's submission.

Directs the Secretary to conduct and complete within 60 days a review of the disease research programs of the National Institute of diabetes and Digestive and Kidney Diseases (as redesignated by this Act) to determine if any of these programs could be more effectively managed by other national research institutions.