Bernie Sanders’ Most Radical Idea Is One He Nearly Never Mentions
WASHINGTON — The mob always love the line. If they haven’t heard it at a Feel The Bern rally before, they’ve find it on TV. It’s scripted and predictable, but the faithful love the script.
“Are you guys ready for a revolutionary notion? ” Sen. Bernie Sanders( I-Vt .) wails. The audience screaming in exultation. Sanders beams at the lectern … and says something in no way radical.
“Together we are gonna create an economy that works for all of us , not just the 1 percent, ” Sanders said in his New Hampshire primary victory speech. Sounds cool, but even Speaker Paul Ryan could sign off on the sentiment.
“We’re gonna invest in jobs and education , not more incarcerates and incarceration, ” he said on Twitter.
At an MSNBC town hall, it’s creating the minimum wages to $15 an hour.
Whatever Sanders tells after his “radical” set up always, always gets an ovation.
But for all the branding, most of his economic policy platform is a prescription for the United States to do the things it already does to help working people — merely more. We’ve had a minimum wage since 1938. Creating it to $15 is ambitious, but not a radical change to the style the labor market is structured. Free tuition at state universities? We already have had 13 years of free education and reduced tuition for in-state college. The corporate lobbyists at the U.S. Chamber of Commerce want the United States to spend more money on infrastructure, too. They don’t want to break up Wall Street banks and reinstate Glass-Steagall, but even this reform is basically conservative in nature. The banking system did pretty well from 1940 to 1990. Let’s discontinued bolt around and go with that.
He’s not revolutionary in the sense of Bolivian president Evo Morales or the late Marxist Chilean leader Salvador Allende. But Sanders does have one truly revolutionary notion — and he hardly ever talks about it.
If you think he is hard on Wall Street, you should see his plan for Big Pharma. He has spent more than a decade collaborating with an obscure think tank on a plan to remake the entire pharmaceutical industry by ending patent protection for new medications. Sanders says his plan would slash prescription drug spending by two thirds without cutting benefits or rationing care. The proposal has enraged narcotic company lobbyists and top officials in both the Bush and Obama administrations. Democratic presidential rival Hillary Clinton has no plan like it. And although Sanders doesn’t often talking here it specifically, it’s still part of his platform. Here’s how it got there.
In 2004, the Pharmaceutical Research and Manufacturers of America — better known as PhRMA — was on a roll. It had just secured a new Medicare prescription drug benefit that would let medicine makers charge the governmental forces whatever costs they wanted. Sanders had voted against the deal and was looking for ways to protect Medicare from ballooning costs.
So he started talking to someone who had actually beaten PhRMA: James Love, who heads the following non-governmental organization Knowledge Ecology International. At the time, Love was on a hot streak of his own. His first big win as a public interest proponent was a reversal of Reagan administration public policies that had privatized government data. In the early 1990 s, it could expense $25 to access a single annual report filed with the Securities and Exchange Commission. That’s chump change for major firms, but a massive expenditure for environmental activists and public interest groups attempting to do serious research. Thanks to Love, every bill in Congress and every corporate filing is now available online for free.
After the government data win, Love spearheaded an effort to bring antitrust charges against Microsoft. He won that one, too: the Department of Justice eventually reached a settlement with the company that likely prevented it from controlling the emerging online sector of the tech industry. But Love caught Sanders’ attention with his is currently working on AIDS in Africa. In the late 1990 s, HIV medications in Africa cost about $10,000 a year, per patient — patently unaffordable for pandemic-hit developing countries. PhRMA had persuaded then-President Bill Clinton that lower costs were simply impossible.
Love negotiated a deal with the Ceo of Indian generic drugmaker Cipla to offer AIDS treatments in Africa at a “humanitarian price” of$ 1 a day. With the cost roadblock contravene, legal walls tumbled( with some assistance from AIDS activists, including a young Rachel Maddow ). The result was a revolution in access to AIDS and HIV treatment that saved millions of lives.
But Love recognized that the pricing madnes for AIDS drugs in Africa — and the pharmaceutical industry’s capture of ostensibly liberal American legislators — was just one example of a nakedly predatory business model. He didn’t want to tweak costs. He wanted to reshape the entire industry.
“We knew it would be perceived as a nuclear alternative, because it would really blow up the existing pharma business model, ” Love said. “So we talked to Bernie because we thought he’d have the intestines to put it out, but also because we really liked working with his staff. They were willing to go with it.”
Prescription drug profits are predicated on what might be called the Martin Shkreli problem: If you have a monopoly on a life-saving medication, you can charge whatever you want. Shkreli is the infamous “Pharma Bro” who bought the regulatory approving rights to an AIDS drug and jacked the cost from $13.50 a pill to $750. When confronted about the obvious price-gouging at a health care seminar in December, he employed terms that would stimulate pharma PR professionals cringe.
“I could have raised it higher and made more profits for our shareholders, ” Shkreli said. “Which is my primary obligation. Again , no one wants to say it. No one’s proud of it. But this is a capitalist society, capitalist system and capitalist rules. My investors expect me to maximize profits.”
Since relatively few patients needed Shkreli’s drug, he could buy the regulatory rights, confident that other challengers wouldn’t jump through the Food and Drug Administration’s hoops to get into a small therapy marketplace. Big pharmaceutical companies typically secure monopolies through more conventional means. A straightforward patent gives firms 20 years of competition-free pricing. A host of other intellectual property maneuvers — blocking access to scientific test data, filing for fresh patents when a new employ or slight improvement is detected — can allow companies to stretch this period out even longer. A dominant objective of U.S. trade policy since Bill Clinton’s presidency has been to extend pharmaceutical monopolies abroad. It’s why Doctors Without Bordersand other humanitarian trade groups, including the Public Citizen’s Access to Medicines, resisted President Barack Obama’s Trans-Pacific Partnership.
“Families will pay almost any price to take care of the person or persons we love, and pharmaceutical companies are in fact willing to charge almost any price, ” Public Citizen’s Access to Medicines director Peter Maybarduk said. “That’s untenable.”
A prize system could … inject the governmental forces into decisions about research priorities. PhRMA senior vice Ken Johnson
In 2004, Love and Sanders began drafting the Medical Innovation Prize Act, which the Vermont senator formally introduction by January of the following year. At the time, the problems in the American pharmaceutical markets were clear. Today, they are even worse. The “findings” section of Sanders’ 2005 bill states that Americans were paying over $179 billion a year for prescription drugs. In 2014, they spent $374 billion — an increase of nearly 110 percentage in a decade, and over $140 billion in excess of ordinary inflation. It’s enough to stimulate the pharmaceutical industry the most profitable industry in the world — more than Big Oil, Big Media, and only slightly ahead of banking, Sanders’ other top-targeted industry on the campaign trail.
There are glaring problems with the existing system. Minor afflictions that beset large numbers of wealthy Americans — say, hair loss — have no shortage of research. But research into antibiotic-resistant pathogens, for example, is plummeting, even as their own problems intensifies. And it’s not that hard to understand why. If you figure out a great way to kill a super-bacteria, patients merely need the pill for a few weeks. It’s much more profitable to treat long-term conditions like HIV or cancer, offering to extend life without a quick remedy. New cancer medications frequently expense well over $ 100,000 a year. A new cystic fibrosis narcotic carries an annual price tag of over $300,000 per patient.
Drug companies have defended these costs — and profits — arguing they are necessary to finance the investigations and development into new medicines. Love and Sander’s solution is to replace drug patents — which grant pharma companies years of monopoly profits — with simple fiscal prizes. Get a cool innovation? You get a prize. How much depends on how many other innovations are out there and how much therapeutic value your new narcotic has. Since the market value for curing rare diseases is low, you also qualify for a award boost if you can kill off an obscure affliction.
Under the Sanders plan, once an discoverer makes a new narcotic, any company could manufacture and marketplace it at whatever cost the market demands. Competition would dramatically lower the costs to customers — and the governmental forces, putting Medicare and Medicaid on stronger fiscal footing. The program would be funded by a new fee on health insurance companies. Insurers, of course, would also be primary beneficiaries of the program, since ending the current narcotic patent system would dramatically reduce the prices of prescription drugs, saving insurers( and patients) lots of money.
After deliberating with Love, Sanders set the total award money quantity at 0.5 percent of total U.S. economic output — about $60 billion in 2005 ( he has since raised it to 0.55 percent of economic output — about $86 billion ). The award money is a lot of money, roughly equal to what the government spent on food stamps in the deepest depths of the Great Recession. But it’s a huge pay cut for pharmaceutical shareholders and executives. The companies argue that absent the big payouts on patent monopolies and other intellectual property incentives, they just wouldn’t have the drive to develop new drugs.
“A prize system could interrupt the flow of funding needed to guarantee research success and could inject the governmental forces into decisions about research priorities, ” PhRMA senior vice Ken Johnson told Fortune in 2007 .
And indeed, the award committee is in fact a government panel. But it’s more market-friendly than the blunt caps on narcotic costs other developed nations have imposed. Other governments allow patents, but literally dictate narcotic costs. Sanders merely wants to stimulate the private sector compete to improve public health.
Elite Washington isn’t interested in reforming the pharmaceutical industry. As part of the Affordable Care Act, Obama cut a deal promising not to threaten narcotic companies’ sources of public earning so long as they didn’t oppose Obamacare. Hillary Clinton has shown no interest in reforming the narcotic patent system.
But neither Love nor Sanders fits in with elite Washington. Still, Love’s successes — and , now, Sanders’ — means that elite Washington can’t quite dismiss them. When major trade deals are being negotiated, White House officials bring their tailored suits and Ferragamo shoes to Love’s office for pow-wows with top economists and humanitarian groups. And although Sanders faces an uphill battle for the Democratic nomination, he has commanded the attention of party upper-class and forced them to grapple with the New Deal zeal bubbling up among the progressive base.
Love and Sanders’ 2005 bill never truly died. Sanders reintroduced versions of it in every Congress since its debut, winning plaudits from public health proponents in the process. He scored a hearing on prizes for AIDS medication in 2012, and the United Nations is scheduled to hold a high-profile international conference on alternatives to the existing narcotic patent system. Changing the business model of the most profitable industry in the world is still part of Sanders’ campaign platform. Maybe it’s merely too revolutionary for a stump speech.
Zach Carter is a co-host of the HuffPost Politics podcast “So, That Happened.” Subscribe here or listen to the latest episode below :
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