Prize Fund for HIV/AIDS Act

Summary

S. 1138[1], Prize Fund for HIV/AIDS Act, was proposed by Sen. Bernie Sanders during the 112th session of Congress. The bill sought to change the current patent system for drugs treating AIDS to a prize system where the inventor would receive a lump sum payment for discovering a drug, and then void any claim on a paten for the drug. The bill died in Congress, and was re-introduced as S. 626 in the 113th Congressional session[2].

Provisions

• Drug companies void their right to patent a drug that treats HIV/AIDS.
• In lieu of patents, companies would receive prize funds from the Prize Fund for HIV/AIDS.

Administrative

• Secretary of Health and Human Services appoints a Prize Fund Director, advisory board other officials, as needed.

Prize Fund

• Prize Fund operates as a revolving fund.
• Secretary of Treasury credits Fund with proceeds.
• Prize Fund Director responsible for giving prizes for medical innovation drugs.

Heterogeneity of Patent and Prize Systems

The act nullifies patents on manufacturing processes of drugs, so that no company may hold the patent on the manufacturing process of a drug. However, a company becomes eligible for prize funds by holding a patent on the manufacturing process they use to create a drug. [Bill language: ...in the case of a manufacturing process for a qualifying treatment for HIV/AIDS, the holder of the patent with respect to such process...]. No new firms may be eligible for prize funds if they use a manufacturing process they did not hold a patent for.