I 
109TH CONGRESS 
1ST SESSION 
H. R. 417 
To provide incentives for investment in research and development for new 
medicines, to enhance access to new medicines, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 26, 2005 
Mr. SANDERS introduced the following bill; which was referred to the Com-
mittee on Energy and Commerce, and in addition to the Committee on 
the Judiciary, for a period to be subsequently determined by the Speaker, 
in each case for consideration of such provisions as fall within the juris-
diction of the committee concerned 
A BILL 
To provide incentives for investment in research and develop-
ment for new medicines, to enhance access to new medi-
cines, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Medical Innovation 
Prize Act of 2005’’. 
SEC. 2. FINDINGS. 
The Congress finds as follows:
(1) Retail sales of prescription drugs totaled 
$179.2 billion in 2003, up 10.7 percent over 2002 
and over 4 times as much as the amount spent in 
1990. 
(2) Retail prescription prices, including both 
manufacturer price changes for existing drugs and 
changes in use to newer, higher-priced drugs, have 
increased an average of 7.4 percent a year from 
1993 to 2003, nearly triple the average inflation 
rate of 2.5 percent. 
(3) United States spending for prescription 
drugs is projected to increase by 10.7 percent annu-
ally between 2004 and 2013. 
(4) From 1993 to 2003, the number of pre-
scriptions purchased increased 70 percent (from 2.0 
billion to 3.4 billion), compared to a United States 
population growth of 13 percent. The average num-
ber of prescriptions per capita increased from 7.8 to 
11.8. 
(5) Prescription drug expenditures rose faster 
than overall national health spending from 1993 to 
2003. 
(6) In 2003, prescription drugs accounted for 
11 percent of national health spending, but 23 per-
cent of total out-of-pocket spending by patients.
(7) Consumers paid 30 percent of prescription 
drug costs in 2003—$53.2 billion of the $179.2 bil-
lion spent on prescription medicines. 
(8) Implementation of the new drug benefit in 
Medicare is likely to increase aggregate drug spend-
ing. 
(9) Retail sales of prescription drugs in the 
United States equaled approximately 1.5 percent of 
United States gross domestic product in 2003. 
(10) High prices on medicines discourage em-
ployers from providing health insurance coverage to 
workers. 
(11) High prices on medicines lead to restric-
tions on use because of price barriers and rationing 
by third parties that subsidize or insure purchases 
of medicines. 
(12) In a 2003 survey, 37 percent of the unin-
sured said they did not fill a prescription because of 
cost, compared to 13 percent of the insured. 
(13) According to the Food and Drug Adminis-
tration, from 1993 to 2002, approximately 70 per-
cent of all new drugs approved did not offer signifi-
cant therapeutic benefits over existing medicines. 
(14) Drug prices are far higher in the United 
States than in any other developed country because
it is the only country that grants pharmaceutical 
companies a monopoly in the market, based on pat-
ent protection, without any corresponding restriction 
on prices. 
(15) Pharmaceutical manufacturers have dis-
torted the quality of drug research in many in-
stances, such as with the drug Celebrex. Often due 
to the influence of the funding source, drug research 
has been shown to suffer from concealed and dis-
torted findings, bias, conflicts of interest, and se-
crecy. 
(16) There are important gaps in treatments 
for many severe illnesses. 
(17) The existence of neglected diseases in 
other regions of the world leads to immense suf-
fering and death, undermines development, shrinks 
potential markets, and has long-term negative ef-
fects for United States security. 
(18) Emerging diseases, viral mutations, and 
food-borne disease transmitted through international 
trade have negative effects on Americans and must 
be combated before they arrive on the Nation’s 
shores.
SEC. 3. PURPOSE. 
The purpose of this Act is to provide incentives to 
invest in research and development of new medicines by 
establishment of a Medical Innovation Prize Fund and to 
enhance access to such medicines by allowing any person 
in compliance with Food and Drug Administration re-
quirements to manufacture, distribute, or sell an approved 
medicine. 
SEC. 4. ELIMINATION OF EXCLUSIVE RIGHTS TO MARKET 
DRUGS AND BIOLOGICAL PRODUCTS. 
(a) NO RIGHT OF EXCLUSIVE MARKETING.—No per-
son shall have the right to exclusively manufacture, dis-
tribute, sell, or use a drug, a biological product, or a man-
ufacturing process for a drug or biological product in 
interstate commerce, notwithstanding title 35 of the 
United States Code, relevant provisions of the Federal 
Food, Drug, and Cosmetic Act, as amended by the Drug 
Price Competition and Patent Term Restoration Act of 
1984 (Public Law 98–417; 98 Stat. 1585; also referred 
to as the ‘‘Hatch-Waxman Act’’ ) and the Medicare Pre-
scription Drug, Improvement, and Modernization Act of 
2003 (Public Law 108–173; 117 Stat. 2066), such as the 
exclusive rights to rely on health registration data or the 
30-month stay-of-effectiveness period for Orange Book 
patents, and any other provision of law providing any pat-
ent right or exclusive marketing period for any drug, bio-
logical product, or manufacturing process for a drug or 
biological product, such as pediatric extensions or orphan 
drug marketing exclusivity. 
(b) REMUNERATION.—A person eligible for prize pay-
ments from the Fund for Medical Innovation Prizes under 
section 9 shall receive such payments— 
(1) in lieu of any remuneration the person 
would have received (but for the operation of sub-
section (a)) by reason of the exclusive marketing, 
distribution, sale, or use of the drug, biological prod-
uct, or manufacturing process involved; and 
(2) in addition to any remuneration the person 
receives by reason of the nonexclusive marketing, 
distribution, sale, or use of the drug, biological prod-
uct, or marketing process. 
(c) APPLICATION.—This section applies only with re-
spect to the marketing, distribution, sale, or use of a drug, 
a biological product, or a marketing process that occurs 
on or after October 1, 2007. 
SEC. 5. FUND FOR MEDICAL INNOVATION PRIZES. 
(a) ESTABLISHMENT.—There is hereby established in 
the Treasury of the United States a revolving fund to be 
known as the Fund for Medical Innovation Prizes, which 
shall consist of amounts appropriated to the Fund and 
amounts credited to the Fund under subsection (c).