[Ip-health] Senate HELP Committee proposes evaluation of Innovation Inducement Prizes, as alternative to product monopolies
james.love at keionline.org
Wed Apr 25 06:09:46 PDT 2012
Source URL: http://keionline.org/node/1402
Senate HELP Committee proposes evaluation of Innovation Inducement Prizes,
as alternative to product monopolies
In the United States Senate, the Committee on Health, Education, Labor and
Pensions (HELP) is trying to move forward a bill titled the "Food and Drug
Administration Safety and Innovation Act." Among other things, the bill
would "amend the Federal Food, Drug, and Cosmetic Act to revise and extend
the user-fee programs for prescription drugs and medical devices, establish
user-fee programs for generic drugs and biosimilars," and address a number
of other topics, such as extend the legal monopoly on antibiotic drugs by 5
years. After long negotiations among Senators on the HELP Committee, the
Chair has produced a "Manager's Amendment," which available on the web page
of the Senate HELP committee here .
Senator Bernie Sanders (I-VT) was successful in adding Section 906 to the
Manager's Amendment. Section 906 provides for an expert consultation and
study by the National Academies  to evaluate "the feasibility and
possible consequences of the use of innovation inducement prizes to reward
successful medical innovations." (For more on the topic of innovation
inducement prizes, see: keionline.org/prizes , and the references below.)
The following is the text of Section 906 of the bill, which sets out the
terms of reference of the National Academies evaluation of innovation
Purpose: In the nature of a substitute.
IN THE SENATE OF THE UNITED STATES—112th Cong., 2d Sess. S. ___________
To amend the Federal Food, Drug, and Cosmetic Act to revise and extend the
user-fee programs for prescription drugs and medical devices, to establish
user-fee programs for generic drugs and biosimilars, and for other purposes.
AMENDMENT IN THE NATURE OF A SUBSTITUTE intended
to be proposed by Mr. HARKIN (for himself and Mr. ENZI)
SEC. 906. INDEPENDENT STUDY ON MEDICAL INNOVATION INDUCEMENT MODEL.
(a) IN GENERAL.—The Secretary of Health and Human Services shall enter into
an agreement with the National Academies to provide expert consultation and
conduct a study that evaluates the feasibility and possible consequences of
the use of innovation inducement prizes to reward successful medical
innovations. Under the agreement, the National Academies shall submit to
such Secretary a report on such study not later than 15 months after the
date of enactment of this Act.
(1) IN GENERAL.—The study conducted under subsection (a) shall model at
least 3 separate segments on the medical technologies market as candidate
targets for the new incentive system and consider different medical
innovation inducement prize design issues, including the challenges
presented in the implementation of prizes for end products, open source
dividend prizes, and prizes for upstream research.
(2) MARKET SEGMENTS.—The segments on the medical technologies market that
shall be considered under paragraph (1) include—
(A) all pharmaceutical and biologic drugs and vaccines;
(B) drugs and vaccines used solely for the treatment of HIV/AIDS; and
(c) ELEMENTS.—The study conducted under subsection (a) shall include
consideration of each of the following:
(1) Whether a system of large innovation inducement prizes could work as a
replacement for the existing product monopoly/patent-based system, as in
effect on the date of enactment of this Act.
(2) How big large innovation prize funds would have to be in order to
induce at least as much research and development investment in innovation
as is induced under the current system of time-limited market exclusivity,
as in effect on the date of enactment of this Act.
(3) Whether a system of large innovation inducement prizes would be more or
less expensive than such current system of time-limited market exclusivity,
calculated over different time periods.
(4) Whether a system of large innovation inducement prizes would expand
access to new products and improve health outcomes.
(5) The type of information and decisionmaking skills that would be
necessary to manage end product prizes.
(6) Whether there would there be major advantages in rewarding the
incremental impact of innovations, as benchmarked against existing products.
(7) How open-source dividend prizes could be managed, and whether such
prizes would increase access to knowledge, materials, data and technologies.
(8) Whether a system of competitive intermediaries for interim research
prizes would provide an acceptable solution to the valuation challenges for
April 24, 2012. Kevin Outterson, Antibiotic prize study in PDUFA V
reauthorization bill , the Incidental Economist.
May 27, 2011. Senator Sanders introduces two medical innovation prize bills
in U.S. Senate to de-link R&D costs from drug prices , KEIonline.Org
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