109th Congress

Medical Innovation Prize Act of 2005

H.R. 417

Background

The Medical Innovation Prize Act of 2005 was intended to change the paradigms for financing medical research and development and for pricing prescription drugs in the United States. The bill’s author, Representative Bernard Sanders (I-VT), stated that “rather than rely[ing] on high drug prices as the incentive for R&D, the bill would directly reward developers of medicines, on the basis of the incremental therapeutic benefit to consumers, through a new Medical Innovation Prize Fund. Prices for prescription drugs to consumers would be at low generic prices immediately upon entry to the market. By breaking the link between drug prices and R&D, it would provide more equitable access to medicine, end rationing and restrictive formularies, and manage overall R&D incentives through a separate mechanism that can be increased or decreased, depending on society’s willingness to pay for medical R&D.”

H.R. 417 would have rewarded innovative products that provide new therapeutic benefits to consumers and reduce expenditures on research, development, and marketing of “me-too” medicines. A fixed proportion of the fund would have been set aside to reward innovations that address neglected diseases and global public health problems.

Provisions of the Legislation/Impact on NIH

H.R. 417 would have provided incentives to invest in research and development of new medicines through the establishment of a Medical Innovation Prize Fund. The Director of the National Institutes of Health would have sat on the Medical Innovation Prize Fund Board of Trustees. The bill would have also eliminated certain existing incentives, including certain rights to exclusively manufacture, distribute, and sell drugs or biological products. In addition, funding minimums would have been established for priority health care needs, including global infectious diseases, diseases that qualify under the U.S. Orphan Drug Act, and neglected diseases primarily affecting the poor in developing countries.

Status and Outlook

H.R. 417 was introduced by Representative Sanders on January 26, 2005, and was referred to the House Judiciary Subcommittee on Courts, the Internet and Intellectual Property. On March 2, the bill was reported out favorably by the Subcommittee without amendment. The bill had no cosponsors. No further action occurred on this legislation during the 109th Congress.