On January 26, 2005, Rep. Sanders introduced H.R. 417 - The Medical Innovation Prize Fund Act. This bill would separate the market for medical innovation from the market for medicines by creating a fund to reward innovators who develop new pharmaceuticals. Rewards would be paid out over ten years, and the size of the reward payments would would be based upon evidence of:

(1) The number of patients who benefit from a drug, biological product, or manufacturing process including (in cases of global neglected diseases, global infectious diseases, and other global public health priorities) the number of non-United States patients.

(2) The incremental therapeutic benefit of a drug, biological product, or manufacturing process, compared to existing drugs, biological products, and manufacturing processes available to treat the same disease or condition.

(3) The degree to which the drug, biological product, or manufacturing process addresses priority health care needs, including:

(A) current and emerging global infectious diseases;
(B) severe illnesses with small client populations (such as indications for which orphan designation has been granted under section 526 of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 360bb)); and
(C) neglected diseases that primarily afflict the poor in developing countries.

(4) Improved efficiency of manufacturing processes for drugs or biological processes.

Under this bill, once a drug receives FDA marketing approval, generic firms could obtain licenses to produce and sell them. Competition in the market would lower prices.

Text of the legislation in xml or as a pdf.

Summary from Rep. Sanders' office. Available as a PDF file, as well as a MS Word document.

NIH Office of Legislative Policy and Analysis. The Medical Innovation Prize Act of 2005.