the opportunity is right there. so for those members of the leadership within the sound of our voices, i just had to rush down before we gavel to a close and say that i absolutely hope we can do this. i would mention that the committee leadership has been very generous in working with me and others on the so-called coastal act, which is a small step toward using science that's already out there to get us toward a resolution on this wind and water issue that is often a problem when a hurricane comes along. but you've made great points. this is not just a bill for people along the oceans and the gulf. this is a bill for the entire united states of america.

it's a bill for the taxpayers, for heavens sake. so senator tester, thank you for your leadership and that of senator vitter and i appreciate senator moran coming on to -- i don't have questions because the questions i would have asked had been asked while i was listening, but thank you very much. let's keep this you and let's redouble our resolve to actually get an accomplishment for the taxpayers and for the american public. >> well, thank you, senator -- >> live now on capitol hill this morning where the senate health committee and senate subcommittee on primary health and ageing is holding a hearing on the cost of hiv/aids drugs. senator bernie sanders has introduced a bill to shorten the time before generics can be made of those drugs. it includes an annual $3 billion prize for hiv/aids drug research. testifying this morning nobel laureate economist joseph

stiglitz, harvard law professor lawrence less ig and a number of public health figures. vermont senator bernie sanders is chairing this hearing. he's in the room. this is about to get under way. [ gavel ] >> we're going to begin the hearing. and i want to thank all of you very very much for being here. in my view, the issue that we are discussing today is of monumental importance. and while it may be controversial within the halls of the united states congress, i have the feeling that the more the american people understand this concept, the more support that there will be.

and i think it's fair for me to tell you that i do not expect the legislation that we'll be discussing today to be passed tomorrow or in the next few months. for the united states congress, this is a fairly radical piece of legislation. many billions of dollars of opposition that will be out there from drug companies and other sources, but i believe from the bottom of my heart that this issue is so important that discussion has got to begin as soon as possible, and that's what we're doing today. so the ideas that people may be hearing on c-span today may sound fairly radical, in a few years they're not. because what we're talking about is absolutely commonsensical and absolutely in the best interests of the people of our country and people throughout the world. i want to thank all of you for being here, not just for being here today but for the work that many of you have done for many, many years on this subject. i start my approach to health care from a very basic premise.

that's something that i have believed throughout my entire life, that health care is a right, not a privilege, and that poverty -- the inability to pay for medicine or health care in general should not be a death sentence neither in the united states of america or any place else. and yet, to a significant degree, that is the case. today some 45,000 americans die each year because they don't get to a doctor when they should, and many, many others are suffering. now, to me, one of the great moral issues of our day is that there are people in our country suffering and in some cases dying because they are not able to afford a medicine that can be purchased for pennies for treatment. in other words, it is one thing -- and i think we can all understand this. if number somebody has an illness that is unable to be

treated, we don't know how to treat it, that death -- that death is a tragedy, but it is a different type of tragedy, it is a needless tragedy when somebody dies because they can't pay a few pennies for a drug that is out there that can cure them and ease their suffering. and that's what we're talking about today. the analogy would be if somebody were in the middle of a swimming pool and drowning and somebody turned their backs and said, i'm not going to jump in that pool and save that child. the united states has today, as i think most americans know or should know, the highest prices in the world for prescription drugs. according to the canadian patent and medicines prices review board's annual survey, average prices for patented medicine in the united states in 2009 were 85% higher in the u.s. than in canada and approximately 150% higher than in france, italy, sweden and switzerland.

price differences on certain drugs are far greater. some of which i'll be talking about in a minute. the simple fact is that the prices of patented medicines are a significant barrier to access to health for millions of uninsured and underinsured americans, let alone people in the developing world, and people die because of that. now, this is an enormously important issue, and it's an issue that says that our health care system is a system which allows significant numbers of people to die and suffer because they can't afford medicine. according to the kaiser family foundation, the harvard school of public health, 40%, 40% of americans reported experiencing, quote, at least one of three cost-related concerns in their family. 16% say it is a serious problem

to pay for prescription drugs. 29% say they have not filled a prescription in the past two years because of the cost. and 23% say they have cut pills in half or skipped doses in order to make a medication last longer. i remember talking to a physician in northern vermont, works, primary care physician in a working class town in my state. she said, yeah, i write out the prescription but 40% of the people don't bother to fill them. what sense does that make? what sense does that make when people are unable to fill and pay for a prescription? it makes no sense. people then get sicker, they end up in the hospital at great cost to the entire system, not to mention all of the suffering that is involved. stop and think for a moment what these numbers really mean. while we now take it for granted one of the great advances of the 20th century was the advent of modern medicine's capability of treating a wide range of

debilitating and fatal illnesses, but all of that research and all of that development doesn't mean a thing if somebody cannot afford to purchase that drug. now, the concept we are discussing today is relevant, of course, to all kinds of diseases. we've introduced legislation based on the prize model for all kinds of diseases, but today the legislation that we are discussing deals strictly with hiv/aids medicine. now, let me tell you why i have introduced separate legislation just to deal with hiv/aids. and the reason is that it simply blew me away and i think would blow anyone's minds away to understand that one drug cost over $25,000 per person per year for a cost of treatment. but that a generic fda-approved

version of the very same drug is being purchased from a competitive supplier by a u.s. government program, and that program is, of course, the president's emergency plan for aids relief, petfar for under $200 per patient for distribution in developing countries. so let me repeat that again in case somebody in the c-span world didn't get it. and that is that the same exact drug which in a local pharmacy here in washington, d.c., will cost a patient $25,000 is being purchased by the united states government for distribution in the developing world for $200. $25,000, $200. now, according to the cdc,

approximately 1.2 million people are living with hiv in the united states. each year approximately 50,000 americans are infected with hiv and approximately 17,000 people with aids died in the united states in 2009. globally, of course, the numbers are staggering. according to the world health organization, there are more than 34 million persons living with hiv/aids worldwide and 2.7 million more are infected each year. 90% of the 34 million hiv positive persons live in developing countries. over 30 million persons. yet only approximately 7 million of them are receiving treatment. so in the developing world, the vast majority of the people who are struggling with hiv are not getting the therapy that they

need. although medicines can slow or even halt the advance of hiv, many americans -- now we're back in the united states of america -- diagnosed as hiv positive are not taking the medicines they need because they simply cannot afford to buy them. the increased demand has overwhelmed federal financial support for the aids drug assistant program adap administered by the united states. in fiscal 2010, adap served a record 229,000 people reflecting an increase of 24,000 people over fiscal year 2009 and a 40% increase since fiscal year '07. however, during that same period, federal funding only grew by 9%. so here's where we are in the united states of america. i'm not talking about south africa. we're not talking about the developing world. funding shortages caused adap waiting lists that had been whittled down to 361 people nationwide in 2010, to grow to a

high of 9,217 people in 12 states as of august 2011. and they are still at 2700 people as of may 10th, 2012. that's 2759 americans last week who need to be on treatment who are not, and that, frankly, is only part of the story because many more are simply being kept off or thrown off the waiting list due to stiffer eligibility requirements. for example, if your income is just a little too high or your state has a cap on the number of people who can enroll, you may not even get on a waiting list. so, to summarize, all over the world millions of people are suffering from hiv not getting the treatment they need , in th united states of america, people are suffering from hiv, not getting the treatment they need,

although the treatment is extremely inexpensive. that's the challenge that we are going to address today. how do we deal with that? and the approach that we are offering today -- and i'm so happy that our very distinguished panel is here to discuss it with us -- is that in the case of aids, people can get the drugs that they need -- should be able to get the drugs they need at prices that they can afford. that's the radical concept that we have. people should not be dying because they can't afford a rather small cost for drugs. and the solution that we are offering is a prize fund proposal targeted to hiv/aids medicine s-1138, and that's the legislation we're discussing today. now under this bill innovation would be rewarded annually from a $3 billion prize fund for

hiv/aids. the prize fund would make awards to developers of medicine based primarily on the added therapeutic value a new treatment offers and the number of people it benefits. products would have generic competition immediately after fda approval. that is -- and here is the key point. the bill would eliminate today's high priced marketing monopolies where a company says, we own the patent, nobody else can have it. we can charge as much as we want for the medicine in the case of atripla, $25,000 a year per patient. some of our witnesses will discuss companies receive a prize today for bringing a new drug to market. they do receive a prize, but it's called a monopoly. that's the prize they receive. under the legislation we're

discussing today instead of their money by charging their patients outrageously high prices in the case of atripla, 25,000 a year, innovative companies would be making their money by receiving prize fund payments for producing important medicines that ease suffering and save lives. once that medicine is approved for sale that company can receive prize payments but the medicine goes to the market at an affordable price because of generic competition. again, in the case of atripla, instead of $25,000, jgeneric companies are making it for $200. there are many other aspects that we will discuss today but in essence the idea is to expedite access to life saving med since at the same time.

more new ideas to tackle the serious health problems facing humanity and getting that product out to the market as inexpensively as we can. this legislation would reward true innovation, eliminate the market incentive for copycat drugs and get all hive/aids treatments to people that need them at generic prices which some have estimated to be under 1% on average compared to brand name prices for hiv med since. i believe by breaking the lik between drug price rewards and the development we can provide universal access to med since as soon as they are available on the market. we can end rationing and restrictive formularies and develop overall incentives to a sanely administered fund that provides significant rewards but only for new medicines that actually offer new value. the bottom line would be better products sooner and generic prices for all pharmaceutical products right away not after

ten years of astronomical prices. how do we pay for it? it pays for itself and then some. while a $3 billion per year fund for this may sound like a lot of money, when you compare it to the savings we'd realize by paying generic prices for the estimates were spent on 2011 on the top 15 brand name hiv/aids drugs last year before rebates or discounts, it is a bargain. so in other words, the initial investment does cost money but we save money long term. and that is why this bill would require all private health reimbursement and insurance programs to contribute to the prize fund in an amount proportionate to the number of hiv/aids patients covered by private plans. to conclude, the bottom line is that the goal of our laws and policies for medicines must be to develop drugs as quickly as possible. drugs that are most effectively confined for the diseases people are facing and to get them out

to every person who needs them as soon as possible. that is what i tried to do with s-1138 for hiv/aids treatment. we should reward innovators for developing these new medicines in a way that does not force any of those who need the drug to wait, suffer and in some cases, die. i want to thank the panel that we have with us today. this is not only a distinguished panel, but it is a panel of folks who have been working in some cases on this issue, who are very familiar with this issue, and i want to thank them again not only for being here today but for the work that they've done for so many years. let me begin with dr. mohammed akhter. dr. akhter is the director of the d.c. department of health. dr. akhter has served as the executive director of the national medical association, executive director of the american public health association and commissioner of

public health for the district of columbia. he's also a professor at howard university college of medicine and the senior associate dean for public and international health at howard. one of dr. akhter's stated goals is expanding hiv services including making them available on demand. dr. akhter thank you so much for being with us. >> good morning. good morning, chairman, sanders. appreciate the opportunity to be here. i want to thank you for holding these hearings, and i'm honored to be here to testify in support of your bill 1138. we thank you for all the work that you have done in the past. i know for many years that you have been always a tireless advocate for the american people's health and want to make sure that people have these services available, accessible and affordable to them. and i think this bill is continuation of your lifelong effort in making sure that

people have the access to the medication that people so desperately need in order to live healthier lives. i want to share with you this morning with the members of the committee, the successes that we have in our nation's capital, washington, d.c., in dealing with hiv/aids epidemic. district of columbia has emerged as a leader in prevention. we've been doing the hiv testing, educational program in the schools, we are testing in the clinics and the emergency rooms, but we are also testing for hiv in the dmvs when people come to get their driver's license or social serves center where people come to get social services so that's widely made available and accessible. last year we tested 122,000 people, which means one out of five citizens in the district of columbia has a chance to come and get tested and know their status. but that's not all. we also have been very active in connecting people, once they've been tested, to the treatment.

75% of the people that were tested positive were connected to the treatment within three months. our mayor, mayor gray, and the city council has been very actively in support of hiv/aids treatment because treatment and prevention are now linked together. you can't do one without the other. and so we have made the treatment on demand available to all who test positive. so nobody in the district of columbia is turned away. in fact we know in other states that the waiting list and sometimes people come to the district and register themselves so that they can get the free medication, and that's a shame, because everybody ought to be able to get the medication where they live and where they work. mr. chairman, also i want to say because of our work in prevention, in treatment, we've been very successful because we had a very close collaboration with the federal government, particularly with the centers

for disease control, and also with the national institutes of health, has taken personal interest in the district to make sure that we have the best research available to be able to act upon us. because of our work in the district along with our community-based partners, since 2009 there's not been a baby born with hiv in the district of columbia, since 2009. the number of cases, people dying from hiv, has been reduced by more than 50% in the last five years. number of persons and also because of our good preventive work, the new cases have for the first time started to decline, the number of cases. so this is a tremendous success story. hiv/aids funding played a big role in terms of providing us

the adap drugs that we were able to provide to our residents, but despite all of this success that we talk about in the district of columbia, it comes at a very high cost. first, there are a lot more people living with hiv/aids today and every day the number continues to increase, second more than half the people living in the district of columbia are now in their mid-40s. so they are needing additional medical care, which is very expensive. we've been very fortunate to move some of those patients over to medicaid so they can get the other services that are available. the cost in the district of columbia for one patient per year is right now 9,400 per person. and that cost is going to go up. this is the minimum cost because we are now starting treatment earlier and earlier on the diagnosis. and i believe it's going to be a lot higher when everybody who needs the medication needs to be on the treatment.

in 2009 there were 755,000 cases in the district of columbia and that add $228 million to the costs. at the end of the day all americans end up paying for these very exorbitant costs. and we're very encouraged by the bill you've introduced and we're looking forward to having a good discussion on the bill and hoping that it will eventually pass so that we cannot only take care of the situation at home but also abroad. thank you very much, mr. chairman, for the opportunity. >> thank you very much for your presentation of all the extraordinary work you are doing. our next panelist is frank oldham jr. he's the executive director of the national association of people with aids. he also serves on the board of directors for the national minority aids council. mr. oldham was the city-wide coordinator under mayor bloomberg, the assistant of public health division on std,

hiv/aids public policy and programs and the deputy assistant commissioner on the bureau of hiv services for the new york city department of health. he launched the faces of aids project in 1999, which spawned two books and a touring photo exhibit showcasing the stories of people living with aids. mr. holdham advises several planning bodies to new york city, the centers for disease control, the lamda legal and washington, d.c. mr. oldham, thank you very much for being with us. >> thank you for providing us with the opportunity to share our thoughts with you on this subject that is so important to 1.2 million people living with hiv/aids in america. the national association of people with aids is the largest and oldest patient advocacy group for people living with hiv/aids. we've also seen as the most trusted voice of our community because of our longstanding

independence. next year naopwa has a bittersweet milestone. we turn 30 years old. i say bittersweet because we'd like nothing better than to see an end to this epidemic which has taken the lives of 620,000 americans. on the other hand we're thrilled to do the good work to educate and inform about the needs of people living with hiv/aids. these are 30 years that dear friends of mine lost, lost in the early years of the aids epidemic back in the 1980s and 1990s they never had a chance to live. so with this in mind, we thank the pharmaceutical industry, the fda and the brilliant researchers for creating antiretrovirals. i'm living proof that they do work. i've been positive for over 23 years. we are at a brilliant beginning in saving the lives of people living with aids.

however, according to recent studies from cdc less than 25% of the people prescribed antiretrovirals stay on treatment. some say it's because they get nauseous, especially when they first start them, others because of the barriers, access to the medication, and they have the potential to increase risks for long-term organ damage. and while premature death at the age of 70 because of heart is preferable to premature death to aids at age 30, napowa believes that we can fund better treatments that will give those of you living with hiv/aids the same quality of life and expectancy as those who don't have hiv. one of my friends and colleagues who have been taking antiretrovirals for over 20 years is thrilled to be alive because of them, but he takes an additional ten pill to manage the side effects of this class of medication. please keep in mind when

factoring cost burden of the status quo. please keep this in mind. so our 30th anniversary is not only bittersweet because the epidemic is still here, it's bittersweet because we're fortune tote have treatments that dramatically extend survival that are not an acceptable but are not an acceptable endgame. we can and must do better. in the last two years at major conferences napowa has hosted symposiums on functional research. this area of research involves creating triggers for the immune system to allow patient's own natural self-defense to kick in and work against hiv. this involves creating therapeutic vaccines that could be given to people living with hiv after they've been already infected. to explain very quickly, many children get smallpox despite being treated for it, the virus

lingers slowly in the background for the rest of the person's life, in most cases it remains in check, but in some persons as adults it emerges as shingles. researchers working on a vaccine despite the presence of the virus in the person's body. the vaccine is expected to prevent further outbreaks in the person who is already infected. so too would this be the case for hiv therapeutic vaccines. impressive results have been emerging recently. one company based in gaithersburg has shown that therapeutic vaccine when used in monkeys that were intentionally highly infected with the monkey version of hiv was able to achieve a functional cure in some of the monkeys. at two years no detectable -- again no detectable viral load was recorded even in the hard to reach reservoirs of these ani l animals. another company base