Sanders: End HIV/AIDS Drug Monopolies

Sen. Bernie Sanders (I-Vt.) today called for eliminating legal monopolies that make HIV/AIDS medicine so expensive in the United States that many patients cannot afford treatment and die.

"The U.S. has - by far - the highest prices in the world for prescription drugs," Sanders said. "The simple fact is that the prices of patent medicines are a significant barrier to access to health for millions of uninsured and underinsured Americans and people die because of it," he added in his opening statement at a Senate Subcommittee on Primary Health and Aging that he chaired.

Sanders cited the example of Atripla, the trade name for a combination drug to treat HIV infection. In the United States, the medicine costs more than $25,000 per person per year. The generic version of the same treatment, approved by the Food and Drug Administration but unavailable for sale in the U.S., costs less than $200 per patient per year.

What drives up prices in the United States is the government patent system that grants monopolies to pharmaceutical companies that develop new drugs. Sanders' legislation, S. 1138, instead would create a $3 billion annual prize fund to reward the discovery of new treatments for HIV/AIDS. Competitive markets would then ensure that, once a drug is discovered, it is made available at the lowest possible price.

Joseph E. Stiglitz, the Nobel Prize-winning economist, called the prize fund approach "exactly right." Testifying before Sanders' subcommittee, Stiglitz said Americans spend more on health care but get far worse outcomes than countries that spend much less. "We need to harness our innovation system to work to drive down the costs and to improve performance. It is not just a matter of economics. It is, in many cases, a matter of life and death," he said.

Globally, the number of people with HIV/AIDS is staggering. The World Health Organization says more than 34 million people have the disease and 2.7 million more are infected every year. In the United States, according to the Centers for Disease Control, approximately 1.2 million people are living with HIV. Each year, another 50,000 Americans are infected and 10,000 people die annually because of AIDS in America.

Although medicines can slow or stop the disease, many HIV-positive Americans simply cannot afford the drugs they need. An AIDS Drug Assistance Program administered by the states served a record 229,000 people in 2010, an increase of 24,000 over the year before. Federal funding has not kept pace. As of this month there were 2,759 Americans who need treatment but are on a waiting list.

The prize fund that would be created by Sanders' bill would be supported by the federal government and private health insurers in an amount proportionate to their share of the HIV/AIDs drug market. Insurance companies and self-insured employers should welcome the new model because the cost of the prize fund would be considerably less than the cost they already pay to buy drugs at monopoly prices.

The legislation would more than pay for itself. Experts estimate that the nearly $10 billion U.S. market for AIDS drugs could be supplied at generic prices for 10 percent of that figure. So even after spending $3 billion per year on the prize fund and $1 billion on the products, there will be a huge overall savings for taxpayers and consumers.

"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," Sanders said.