AIDS 2012: Senator Sanders (I-VT) Speaks on S.1138, HIV/AIDS Prize Fund Bill

At a session on the AIDS Financial Crisis, Senator Bernie Sanders (I-VT) presented on the bill he introduced last year, S.1138, a Prize Fund for HIV/AIDS. During his presentation, Senator Sanders referenced the recent hearing held by the Senate HELP Committee and noted that what motivated him to hold the hearing was the enormous price difference between the US branded price and lowest available generic price for the leading HIV/AIDS drug in the US, Atripla (a three-drug combination of efavirenz, emtricitabine and tenofovir). When he announced a price of US $25,000 per year in the United States and a generic price of less than $200 per year, there were audible gasps from the audience.

Sanders Sanders emphasized that healthcare is a right and that poverty should not be a death sentence. He called the issue around affordability of treatment the “great moral issue of our day,” noting that people are suffering and dying without access to pills that can be manufactured for pennies a day. He called for an end to the “broken and immoral system” and replacing it with the prize fund proposed in his bill which would permit “virtually universal access to life-saving medicines for HIV/AIDS as soon as they are approved for sale by rewarding innovation with a system of prizes instead of high prices.” He noted at the close of his speech that this great moral issue is applicable not only to AIDS, but to other diseases as well.

A press release on yesterday’s presentation is available at Senator Sanders’ website. Additional information on S.1138, as well as the broader prize fund bill, S.1137, available here.

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Senator Sanders speaking on a S.1138, A Prize Fund for HIV/AIDS

The full statement made by Senator Sanders at the International AIDS Conference is reprinted below:

Statement of Bernie Sanders (I-Vt)
International AIDS Conference Panel:
The AIDS Financial Crisis: Life or Death for Millions

July 25, 2012

Thank you for inviting me here today. I am very happy to join all of you for the Nineteenth International AIDS Conference, and happy we can finally have this event here in Washington, DC, again. The work you are doing is vitally important to addressing the international AIDS crisis and I want to congratulate you for all that you do. We all must work together if we are going to achieve an AIDS-free generation and the topic of this panel is critically important to achieving that goal.

I start my approach to health care from a basic premise: that health care is a human right, and that poverty should not be a death sentence, neither in the United States nor anywhere else in the world. Yet it is, much to our disgrace.

To me, one of the great moral issues of our day is that there are people suffering and in some cases dying because they are not able to afford a medicine that can be produced for pennies per treatment. In other words, it is one thing – and tragic –when someone suffers and dies because we have not yet developed a treatment or cure for their disease. But it is another thing entirely when we have a cure or treatment and it can be manufactured and delivered to them for a couple of dollars, and yet they suffer and die because the price is set so high that they cannot afford it. To me, that is the equivalent of finding a child drowning in a swimming pool and not reaching in to save them. How can that be morally defended?

As Chairman of the Senate Subcommittee on Primary Health and Aging, I recently held a hearing on an extremely important concept. And that is that we end our broken and immoral system and replace it with a new model that rewards innovation but at the same time makes medicine available to those who need it regardless of their income.

This approach would allow virtually universal access to life-saving medicines for HIV/AIDS as soon as they are approved for sale by rewarding innovation with a system of prizes instead of high prices.

Unfortunately, at this point, this proposal is far too “radical” an idea for the United States Congress to seriously consider. But it is an idea whose time has come, which is gaining more and more support here and throughout the world. My legislation is endorsed by the organizer of this panel – the AIDS Healthcare Foundation – as well as by Public Citizen, Knowledge Ecology International and US PIRG. I was very pleased that at my hearing Nobel-prize-winning economist Joe Stiglitz testified in support of my bill and the prize fund concept – calling it “exactly right.” And several countries have expressed support for the prize fund model before the World Health Organization. I strongly believe that it provides a new model that we here in America and others in this battle around the world must keep fighting for.

While we now take it for granted, one of the great advances of the twentieth century was the advent of modern medicines capable of treating a range of debilitating and fatal illnesses. In fact, a very significant part of what modern medicine is about is the use of medicines. What does it mean, however, if a significant portion of the population is unable to use the drugs that can treat their illnesses? (Set aside AIDS for the moment – I can tell you that in my state, primary healthcare doctors tell me that 25-30 percent of their patients are unable financially to fill the prescriptions they prescribe. What medical sense does that make?) How much suffering is created, how many people unnecessarily die, and how many additional health care expenses do we incur because millions of people in this country and around the world cannot afford to buy the medicines their doctors prescribe?

The Department of Health and Human Services here in the U.S. announced last week that it will grant an additional $80 million to eliminate wait lists for our domestic AIDS Drug Assistance Program (ADAP). I applaud that decision. This will certainly benefit the nearly two thousand patients on waitlists at the moment and for that reason this decision is very welcome news. But, while it addresses the immediate crisis, it does nothing to address the underlying problem that drugs are far, far too expensive and are breaking the budgets of our states and of nations around the world.

One of the reasons that I held the hearing on the prize fund approach is that I had learned some extraordinarily disturbing facts regarding the pricing of AIDS drugs. What I had learned is that one drug—Atripla—costs over $25,000 per person per year for a course of treatment here in the United States. What I also learned is that a generic, FDA-approved version of the very same drug is being purchased from a competitive supplier by a US government program—PEPFAR—for under $200 per patient per year, for distribution in developing countries. Let me repeat. The exact same drug that is being purchased by a U.S. government entity from a competitive generic supplier for under $200 costs people in the United States an average wholesale price of over $25,000, according to the NIH! While it is probably true that states and the federal program that supports them pay less than $25,000, there is no question that they are paying far, far more than the cost of a generic.

Needless to say, the additional $80 million announced last week to address the ADAP waiting lists, instead of treating approximately 2,000 additional patients here in the US, could be used to treat hundreds of thousands of patients instead if generic drug prices were available across the United States.

What could tell the story of how much more we are paying in the United States and elsewhere to support our inefficient model better than that? In the case of Atripla – where we’re paying over $25,000 for a drug that costs under $200 as a generic – by my math, we are paying about $24,800 per patient, per year, just to support the monopoly, price-gouging model. We have got to find a better way.

I have offered legislation to do just that. My bill, S. 1138, the “Prize Fund for HIV/AIDS Act,” is a prize fund proposal targeted to HIV/AIDS medicines. I have also introduced a broader bill proposing a similar model for all medicines.

Under S. 1138, innovation would be rewarded annually from a $3 billion Prize Fund for HIV/AIDS in the United States. The Prize Fund would make significant awards to developers of HIV/AIDS medicines, based primarily upon the added therapeutic value a new treatment offers and the number of people it benefits. However, the products themselves would have generic competition immediately after FDA approval – that is, the bill would eliminate today’s high-priced marketing monopolies as the financial incentive for medical innovation.
Under my bill, instead of making their money by charging sick people outrageously high, monopoly prices, innovative companies would make their money by receiving prize fund payments for producing important medicines that ease suffering and save lives. Once that medicine is approved for sale, that company begins to receive prize payments for their innovation, but the medicine gets to patients at an affordable price because of generic competition. The bottom line would be better products sooner, and generic prices for all HIV/AIDS medicines right away, not after ten years of astronomical prices.

According to the CDC, approximately 1.2 million people are living with HIV in the United States. Each year, another 50,000 Americans are infected with HIV, and 10,000 people die annually from AIDS in America. Globally, as this audience knows too well, the numbers are staggering—according to the WHO, there are more than 34 million persons living with HIV/AIDS worldwide and 2.7 million more are infected each year. Yet, according to the most recent UNAIDS report, only approximately 8 million people living with HIV received ARV therapy in low- and middle-income countries in 2011. While we are all proud that we have made significant progress in recent years in the United States and worldwide, and I want to thank many of you for your efforts in making that possible, we all agree that millions of people are still needlessly suffering and dying because the costs of these medicines are too high.

A further complication reported in a new study by British researchers shows HIV drug-resistance is on the rise in developing countries. New treatment regimes will be needed to respond. Of course this will cost money. How, unless we turn to a different model like the prize fund, will we be able to afford the astronomical prices that will go along with these new drugs?

The bottom line is that the goal of our laws and policies for medicines must be to develop drugs as quickly as possible, drugs that are the most effective we can find for the diseases people are facing, and to get them out to every person who needs them as soon as possible. We must find a way to reward innovators for developing these new medicines in a way that does not bankrupt governments and that does not force any of those who need a lifesaving drug to wait, suffer and, in some cases, die before it becomes affordable.
I look forward to working with all of you in the future as we continue the fight for a better system. Thank you.

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