Sanders Introduces Rule to Require Fair Pricing on Taxpayer-Funded Drugs

WASHINGTON, July 31 – Sen. Bernie Sanders (I-Vt.) and Rep. Peter DeFazio (D-Ore.) proposed a rule Monday that would end price gouging on prescription drugs and other health care products developed with taxpayer money.

Sanders and DeFazio reintroduced their bill, which they first proposed two decades ago with bipartisan support, after drugmaker Sanofi Pasteur refused to agree to fair pricing on a Zika virus vaccine developed with over $1 billion in taxpayer dollars.

The U.S. Army is offering French pharmaceutical giant Sanofi an exclusive license to develop and market a vaccine for the Zika virus. American taxpayers have already spent more than $1 billion on Zika research and prevention efforts, including millions to develop a vaccine. The Department of Health and Human Services gave Sanofi $43 million to develop the vaccine with $130 million in federal funding still to come.

But Sanofi has refused to agree to sell the drug back to Americans at a fair price. Without a fair pricing agreement, the company can charge Americans whatever astronomical price it wants for its vaccine.

“Americans should not be forced to pay the highest prices in the world for a vaccine we spent more than $1 billion to help develop. Sanofi gets more than one-third of its roughly $34 billion in revenues from the United States alone, and its CEO made nearly $5 million in salary last year. Yet they have rejected the U.S. Army’s request for fair pricing. That is simply unacceptable," Sanders said.

Sanders' rule would prevent situations such as this one by requiring federal agencies and federally funded nonprofits to secure reasonable pricing agreements from manufacturers before they grant exclusive rights to make drugs, vaccines or other health care products.

As many as one-third of studies undertaken with pharmaceutical and other health care companies to bring drugs to the market are funded by American taxpayer dollars. However, there are currently no assurances that final products made available to the public will priced affordably.

The Sanofi deal is not unique. The high-priced prostate cancer drug Xtandi was developed at UCLA with taxpayer-funded research grants and support from the Army and the National Institutes of Health. UCLA licensed the drug to a small biotech company in San Francisco. Pfizer Inc. paid $14 billion to acquire that company last year. Americans are being charged $129,000 for a one-year treatment. The same drug regimen costs just $30,000 in Canada.

"Sanofi and the rest of the pharmaceutical industry cannot be allowed to make huge profits on the backs of working class Americans, many of whom cannot afford the medication they are prescribed. The days of allowing Sanofi and other drug makers to gouge American consumers after taking billions in taxpayer money must end. That is why I am introducing legislation to demand fairer, lower prices for the Zika vaccine and for every drug developed with government resources. This is a fight that we cannot afford to lose,” Sanders said.

Sanders' rule, which was introduced as an amendment to the Federal Food, Drug and Cosmetic Act of 1938, would ensure that taxpayers would be able to afford medication they paid to develop.

Read the text of the amendment here.