[Ip-health] Senator Sanders introduces two medical innovation prize bills in U.S. Senate to de-link R&D costs from drug prices

Jamie Love james.love at keionline.org
Fri May 27 05:11:50 PDT 2011


Senator Sanders introduces two medical innovation prize bills in U.S. Senate
to de-link R&D costs from drug prices

On Thursday, May 26, 2011, Senator Bernie Sanders (I-VT) introduced two
bills in the United States Senate that would de-link R&D costs from drug
prices. The bill names and numbers are as follows:

The Medical Innovation Prize Fund Act: S. 11137 [1]
The Prize Fund for HIV/AIDS Act: S. 11138* [2]

Both bills would eliminate all legal barriers to the manufacture and sale of
generic versions of drugs and vaccines. The more ambitious bill is the
Medical Innovation Prize Fund Act, which would apply to all prescription
drugs. The narrower proposal is the Prize Fund for HIV/AIDS Act, which would
only apply to treatments for HIV/AIDS. The Medical Innovation Prize Fund
would create a prize fund equal of .0055 of US GDP, which is more than $80
billion per year at current levels of U.S. GDP. The HIV/AID Prize Fund would
be funded at .0002* of U.S. GDP, which is equal to more than $3 billion per
year at current levels of U.S. GDP.

The federal government and private health insurance companies would co-fund
the prizes, according to formulas set out in the bills. The cost of the
prize funds would be more than offset by the savings from the introduction
of generic competition for products.

Both bills have some similar features to Senator Sanders' earlier prize fund
bills, but there are also a number of changes. Among those changes are the
introduction of an open source dividend element to the bills, which would
have at least 5 percent of the prize money going to persons or communities
that put knowledge, data, materials or technology into the public domain, or
provide royalty free and non-discriminatory access to patents and other
intellectual property rights. Both bills also permit the creation of
competitive intermediaries to manage prizes for interim technologies. The
intermediaries would be non-profit entities that compete for funding from
private insurance companies that share the cost of the prize fund. The
Medical Innovation Prize Fund bill now includes some additional guidance
regarding the valuation of antibiotics, or medicines and vaccines used in
stockpiles for public health emergencies.

This is finding number 3 from S. 11137.

(3) By de-linking research and development incentives from product prices,
and by eliminating legal monopolies to sell products, it is possible to
induce investments that are medically more important, procure products at
low prices from competitive suppliers, radically lower pricing barriers for
access to new medicines, reduce wasteful marketing and research and
development activities, and dramatically lower the overall costs of
acquiring innovation, while expanding access to that innovation.

KEI written a memo describing each bill, formated as a PDF in both letter
and A4paper sizes.

Overview of the Medical Innovation Prize Fund Act, letter [3], A4 [4]
Overview of the Prize Fund for HIV/AIDS Act, letter [3], A4 [5].

More information on medical innovation inducement prizes is available here:
http://keionline.org/prizes [6].

* There is a typo in the attached PDF of the HIV/AIDS bill that will be
fixed, concerning the size of the prize fund. It should read .02 percent on
page 15, line 8.

Source URL: http://keionline.org/node/1147

[1] http://keionline.org/sites/default/files/S11137_112th.pdf
[2] http://keionline.org/sites/default/files/S11138_112th.pdf
[6] http://keionline.org/prizes

James Love.  Knowledge Ecology International
http://www.keionline.org, +1.202.332.2670, US Mobile: +1.202.361.3040,
Geneva Mobile: +41.76.413.6584, efax: +1.888.245.3140.

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