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US Senate call to scrap HIV drug patents
  pharmatimes World News | May 21, 2012 Lynn Taylor

A leading US Senator has called for drug patent "monopolies" to be abolished and replaced by an annual prize fund to reward the discovery of new treatments which would then, because of the power of competitive markets, become available at the lowest possible price.

"The US has - by far - the highest prices in the world for prescription drugs," says Vermont's Independent Senator, Bernie Sanders. "The simple fact is that the prices of patent medicines are a significant barrier to health for millions of uninsured and underinsured Americans, and people die because of it," he added, opening a hearing held by a subcommittee of the Senate Health Education, Labour and Pensions (HELP) Committee last week.

What drives up US prices is the government patent system that grants monopolies to pharmaceutical companies that develop new drugs, Sen Sanders told the hearing, held by the panel's subcommittee in primary health and ageing, which he chairs. As far as he knew, he said, this was "the first Congressional hearing ever held to discuss the possibility of ending monopolies for medicines and offering a serious proposal to replace our broken system with one that would accelerate innovation while providing virtually universal access to life-saving medicines."

Sen Sanders says that while this concept is relevant to all kinds of diseases, he has introduced Senate bill 1138, the Prize Fund for HIV/AIDS Act, which would de-link R&D incentives from drug prices specifically for new HIV/AIDS medicines and create instead a $3 billion annual prize fund to reward the discovery of new treatments.

One of the reasons he decided to focus the bill on a single disease was what he discovered about the price of Bristol-Myers Squibb/Gilead's HIV/AIDS drug Atripla, which combines three medicines - Sustiva (efavirenz), Emtriva (emtricitabine) and Viread (tenofovir disproxil fumarate) - which, he said, "simply blew me away."

Atripla costs more than $25,000 per person per year in the US, but the generic version, which is approved by the Food and Drug Administration (FDA) but unavailable for sale in the US, costs less than $200 per patient per year, he said. The generic version is being purchased from a competitive supplier by the President's Emergency Plan for AIDS Relief (PEPFAR), for under $200 per patient a year, for distribution in developing countries, Sen Sanders told the hearing.

The $3 billion annual prize fund proposed in his bill would make awards to developers of medicines, based primarily upon therapeutic value a new treatment offers and the number of people it benefits. Products would have generic competition immediately after FDA approval - the bill would eliminate "today's high-priced marketing monopolies as the reward for patented medical innovations," he said.

The $3 billion-a-year fund would pay for itself, "and then some," said Sen Sanders. When you compare this cost to the savings which would be realised by paying generic prices for the estimated $9.7 billion paid in the US last year on the top 15 brand-name HIV/AIDS drugs, before rebates or discounts, "it's a bargain," he said.

Sen Sanders' bill is supported by Joseph Stiglitz, winner of the Nobel Prize in Economics and a chief economist for the World Bank. "America is the most innovative country in the world. It has the best universities, attracting the best minds from around the world. But America also has the least efficient health care system in the world, spending more money per capita and a larger fraction of Gross Domestic Product (GDP) on the health care system than any other country - and getting far poorer outcomes than countries that spending much less," he said.

"We need to harness our innovation system to work to drive down the costs and to improve performance, Prof Stiglitz told the hearing, adding that the approach taken by Sen Sanders' bill is "exactly right" and "will provide a model for further reforms in our health innovation system."


'Radical' bill seeks to reduce cost of AIDS drugs by awarding prizes instead of patents

Wash Post By Brian Vastag, Published: May 19

That could be the slogan for a radical idea that leading economists say would lower the price of new drugs for treating HIV/AIDS.


(Manuel Balce Ceneta/AP) - Sen. Bernard Sanders (I- Vt.), has introduced a bill to establish a prize system for the development of anti-AIDS drugs.

Treating AIDS costs tens of thousands of dollars per patient annually in the United States, and more and more patients are unable to afford the life-saving drugs, according to figures from the AIDS Drug Assistance Program. The waiting list for the program, which is jointly funded by federal and state governments and provides medicines to low-income patients, now stands at 2,759, up from 361 in 2010.

Academics have been saying for more than a decade that one way to lower drug costs would be to offer pharmaceutical companies a share of a multi-billion-dollar prize pool, instead of the current system of patents that give a company exclusive rights to newly developed drugs.

The notion surfaced in Congress last week at a hearing called by Sen. Bernard Sanders (I-Vt.), who has introduced a bill to establish a prize system for the development of anti-AIDS drugs.

"It simply blew me away - and would blow anyone's mind away - that one drug, Atripla, costs $25,000 per year" in the United States, Sanders said at the hearing of the subcommittee on primary health and aging.

Generic versions of the same drug cost $200 in Africa and other parts of the developing world.

The huge price gap is a result of a deal struck with brand-name U.S. drugmakers under the President's Emergency Plan for AIDS Relief, which provides anti-retroviral drugs to 3.9 million people in developing countries. In 2003, to reach more patients, brand-name drugmakers agreed to let overseas drugmakers sell generic, low-cost versions of their patented AIDS drugs outside the United States.

Under Sanders's bill, newly developed AIDS drugs could immediately be made by any drug company as a low-cost generic. In lieu of patent protection, the company that invented the drug could win a prize from a pool funded by insurance companies and the federal government at $3 billion per year.

To win, companies would have to show that a drug performed better than older drugs. A panel of experts would evaluate claims.

If enacted, the bill would save private insurers, Medicaid and other government assistance programs money , Sanders said. Acknowledging that the plan would reduce drug company profits, he called it "fairly radical for the U.S. Congress."

"This is like the nuclear option for the pharma sector," said James Love, an intellectual property expert who testified in favor of the bill.

While Sanders acknowledged that the legislation isn't going anywhere anytime soon - he is its sole sponsor - the idea of prizes to speed new medicines to market is gaining momentum.

Nobel Prize-winning economist Joseph Stiglitz and Harvard Law professor Lawrence Lessig testified in favor of the bill, and last month, an advisory committee to the World Health Organization broadly endorsed prizes for drug development. Via other legislation, Congress is poised to ask the U.S. National Academies to study the issue.

Hearing on HIV/AIDS Legislation:

On May 15, 2012, the Subcommittee on Primary Health and Aging of the Senate HELP Committee convened to take testimony on why many people diagnosed with HIV/AIDS cannot afford the medications they need. Chairman Bernard Sanders said his bill, S. 1138, would create a $3 billion prize fund to award developers of HIV/AIDS drugs offering added therapeutic value. Witnesses testified on current barriers, including the rapid increase in HIV drug regimens and inefficiencies in the U.S. patent system for drug products.

Witnesses included the following individuals - and a link to their testimony posted on the HELP Committee site below:

Dr. Mohammed Akhter , Director, DC Department of Health; Executive Director of the American Public Health Association from 1997-2002, Washington, DC

Frank Oldham, Jr. , President and CEO, National Association of People With AIDS, Washington, DC

Suerie Moon , Research Director and Co-Chair of the Forum on Global Governance for Health, Harvard Global Health Institute and Harvard School of Public Health, Cambridge, MA

Joseph Stiglitz , Professor at Columbia University; winner of the Nobel Prize in Economics; former chairman of the Council of Economic Advisors and a chief economist for the World Bank, New York, NY

Lawrence Lessig , Professor at Harvard Law School, founder of Creative Commons and the Stanford Center for Internet and Society, Cambridge, MA

James Love , Director of Knowledge Ecology International; Co-Chair of Trans-Atlantic Consumer Dialogue Intellectual Property Policy Committee, Washington, DC


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