Vermont Senator Bernie Sanders
Photograph by Spencer Platt via Getty Images
By Sy Mukherjee
March 14, 2016

Bernie Sanders unveiled a new plan Monday aimed at tackling HIV/AIDS drug prices: The Democratic presidential contender is proposing an annual cash prize for companies that help make the therapies more affordable.

The plan would establish a $3 billion-plus annual prize fund for firms that clear a number of thresholds. It also comes shortly after rival Hillary Clinton apologized for praising President Ronald Reagan and late First Lady Nancy Reagan’s efforts on addressing the AIDS epidemics in the 1980s.

“The Prize Fund would reward medical researchers and developers of medicines based primarily upon the added therapeutic value a new treatment offers and the number of people it benefits,” the Sanders campaign wrote.

Sanders’ cash reward is a carrot meant to combat a system of rewarding drugmakers via market exclusivity. But there’s also a stick: Under his plan, “drugs would have generic competition immediately after FDA approval” to lower prices.

 

Drugmakers may not be particularly excited by the idea. The pharma industry has tended to focus on extending exclusivity as a means of ensuring the bottom line in both domestic and international policy. But critics have pushed back on this strategy, arguing that it burdens patients.

The HIV/AIDS drug market is dominated by a number of major pharmaceuticals including Gilead (gild), Pfizer (pfe), GlaxoSmithKline, and Johnson & Johnson (jnj).

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