US Senate call to scrap HIV drug patents

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US Senate call to scrap HIV drug patents

pharmatimes World News | May 21, 2012 Lynn

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 . " 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 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 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 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

. 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 ' bill is supported by ph 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 ' 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 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.

( Balce Ceneta/AP) - Sen. Bernard (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

(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, 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 '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 , 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 Love, an

intellectual property expert who testified in favor of the bill.

While 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 ph 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 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

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

ph 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

Love , Director of Knowledge Ecology International; Co-Chair of

Trans-Atlantic Consumer Dialogue Intellectual Property Policy Committee,

Washington, DC

WITNESS TESTIMONY:

http://www.help.senate.gov/hearings/hearing/?id=2d5dda75-5056-9502-5d1a-2a40d8a9\

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