The proposal was brought forward in the US Congress on 15 May 2012 at a hearing held by the subcommittee on primary health and ageing of the Senate Health Education, Labour and Pensions (HELP) Committee. Senator Bernard Sanders, who is chair of the subcommittee, has introduced a bill to establish a prize system for the development of anti-AIDS drugs.

According to Senator Sanders ‘the US has by far the highest prices in the world for prescription drugs. 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.’ The Senator added that he believed that it is the granting of monopolies via the patent system that drives up prices in the US.

Senator Sanders said that 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.’

Senator Sanders introduced Senate Bill S. 1138, the Prize Fund for HIV/AIDS Act, specifically for new HIV/AIDS medicines in an attempt to de-link research and development from drug patents by creating instead a US$3 billion annual prize fund to reward the discovery of new treatments.

The reason Senator Sanders decided to focus on HIV/AIDS was after he discovered the price of Atripla, a drug which combines Sustiva (efavirenz), Emtriva (emtricitabine) and Viread (tenofovir disproxil fumarate). In the US, this drug costs US$25,000 per year, compared to just US$200 in Africa and other parts of the developing world, which ‘simply blew me away’ the Senator said.

The generic version has been approved by FDA and is available to developing countries under the President’s Emergency Plan for AIDS Relief (PEPFAR).

Under Senator Sander’s bill, newly developed AIDS drugs could immediately be made by any drug company as low-cost generics, eliminating ‘today’s high-priced marketing monopolies as the reward for patented medical innovations’, he said. Instead of patent protection, the innovator company could be granted an award from a prize pool funded by insurance companies and the federal government. To win, companies would have to show a panel of experts that the new drug performed better than older drugs.

Senator Sanders acknowledged that this radical change in the system is not likely to happen any time soon and he is currently the only sponsor of the bill. However, 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. However, even some AIDS activists have declared the bill to be flawed, while others think it is too indirect and does not encourage drug companies to bring new drugs to the market.

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