Senators Kerry and Lugar Speeches on Their Bill

Here are extracts from the Congressional Record of the speeches made by Senator Lugar and Senator Kerry on the introduction of the Vaccines for the New Millennium Bill 2005 S.1698Senator Lugar

Our bill would require the United States to develop a comprehensive strategy to accelerate research and development in vaccines for HIV/AIDS, tuberculosis, malaria, and other infectious diseases that are major killers in the developing world. The strategy would require an increase in public-private partnerships, whereby public entities such as governments, team up with companies or private foundations to conduct research or vaccine trials. The bill would require the United States government to commit to purchase vaccines for these diseases once they are developed through ``advance market commitments.'' Finally, the legislation would create a tax credit for companies that invest in research and development for vaccines for these diseases.

Senator Kerry:

Research has shown that the major obstacle to the development of vaccines for these diseases is the absence of a market because these diseases hit hardest in poor countries that cannot afford to buy the vaccines. Advanced market commitments AMCs are designed to remove this obstacle by creating the market ahead of time. AMCs would be legally binding contracts to purchase a vaccine or microbicide at a fair market price for a guaranteed number of treatments, thereby creating a market incentive for a company to invest in the development and production of vaccines for these diseases. The international framework for the AMCs would also include clearly defined requirements for eligible vaccines to ensure that they are safe and effective as well as clearly defined and transparent rules of competition. The bill also mandates that the Secretary establish a purchase fund in the Treasury as soon as a vaccine to combat one of these diseases is available.

See the full text here.By Mr. KERRY (for himself and Mr. LUGAR): S. 1698. A bill to accelerate efforts to develop vaccines for diseases primarily affecting developing countries and for other purposes; to the Committee on Finance. Mr. KERRY. Mr. President, this week world leaders are meeting at the United Nations to reaffirm the commitments made five years ago under the United Nations Millennium Declaration, including the commitment to halt and begin to reverse by the year 2015 the spread of HIV/AIDs, malaria, and other major diseases that claim the lives of millions of people around the world every year. We still have a long way to go if we are going to meet this challenge. AIDS, which has already claimed the lives of 20 million people, continues to be the leading cause of premature death in sub-Saharan Africa. An estimated 39 million people worldwide are infected with HIV. Last year alone, 4.9 million people were newly infected with HIV, and 3.1 million died. For years, the epidemic was focused on sub-Saharan Africa, but now HIV is spreading fastest in Central Europe and in parts of Asia. Although the AIDS pandemic has gripped the world's notice, other diseases such as malaria and tuberculosis have drawn less attention--but they too are deadly, particularly for those in the world's poorest countries. Malaria claims the lives of a million people annually, many of them young children; ninety percent of these deaths occur among people living in sub-Saharan Africa. Tuberculosis, once thought to be eradicated, has reemerged in new and more drug resistant strains. An estimated 1.7 million people now die annually from TB. Because those living with HIV or AIDS are particularly vulnerable, the number of TB cases has been growing rapidly in sub-Saharan Africa and Central Europe.Taken together HIV/AIDS, TB and malaria kill over 5 million people annually. A human crisis of this proportion demands that we respond with urgency and thoughtfulness. We must continue to support robust prevention, treatment and care programs. But we must also recognize that vaccines are the most effective weapons in the arsenal of modern medicine to stop the threat of AIDS and other infectious diseases that are decimating the developing world. Pharmaceutical and biotechnology companies, however, are reluctant to invest in research for vaccines for these diseases because they fear that the market will not be lucrative enough to cover the costs of research and development The bill that I am introducing today, Vaccines for the New Millennium Act of 2005, is designed to address this problem by providing incentives for these companies to accelerate their efforts to develop vaccines and microbicides to prevent HIV/AIDS, TB, malaria and other neglected diseases. It builds upon legislation that I introduced in 2001 with Senator Frist. I am pleased that the Chairman of the Foreign Relations Committee, Senator Lugar, is joining me in introducing this new, expanded bill. The bill provides a variety of economic incentives. First, it mandates that the Secretary of the Treasury enter into negotiations with the World Bank, the International Development Association, the Global Alliance for Vaccines and Immunizations, and other interested parties in order to establish advanced market commitments, AMCs, for the purchase of vaccines and microbicides to combat neglected diseases. Research has shown that the major obstacle to the development of vaccines for these diseases is the absence of a market because these diseases hit hardest in poor countries that cannot afford to buy the vaccines. Advanced market commitments AMCs are designed to remove this obstacle by creating the market ahead of time. AMCs would be legally binding contracts to purchase a vaccine or microbicide at a fair market price for a guaranteed number of treatments, thereby creating a market incentive for a company to invest in the development and production of vaccines for these diseases. The international framework for the AMCs would also include clearly defined requirements for eligible vaccines to ensure that they are safe and effective as well as clearly defined and transparent rules of competition. The bill also mandates that the Secretary establish a purchase fund in the Treasury as soon as a vaccine to combat one of these diseases is available. Second, the bill supplements the market incentive with a variety of tax incentives designed to provide appropriate and equitable incentives to both large pharmaceutical and small private sector companies to stimulate vaccine development. The bill provides a 30 percent tax credit each year on qualified research expenses to develop microbicides for HIV and vaccines for HIV, TB, malaria and other neglected diseases that kill more than 1 million people annually. This is an expansion of the existing R&D tax credit and can be applied to clinical trials outside of the United States, since the majority of those infected with these diseases are beyond our borders. It provides a refundable tax credit to small biotechnology companies based on the amount of qualified research that they do in a given year. This credit is designed to stimulate research among the firms that are the most innovative and to ensure that assistance is given to those small companies that need it the most. Increased research efforts by these firms could be instrumental to the effort to develop effective vaccines for neglected diseases, particularly for HIV/AIDS.And it provides a 100 percent tax credit on contracts and other arrangements for research and development of these vaccines and microbicides. This credit, which is an increase over the 65 percent credit now in the tax code, is designed to serve as an incentive to larger pharmaceutical companies to work hand in hand with the smaller biotech companies to pick up the pace of vaccine development. Once vaccines are developed, it is imperative that they be widely distributed. The bill that I am introducing today with Senator Lugar also addresses the distribution side of the equation. It provides a 100 percent tax credit to companies on the sales of new vaccines and microbicides as long as those sales are made to a qualified international health organization or foreign government for distribution in developing countries.Finally, the bill sets up a pilot program under the Small Business Act to encourage the development of vaccines and microbicides by eligible companies under the auspices of the Small Business Innovation Research, SBIR, and the Small Business Technology Transfer, STTR, programs in US government agencies with a global health or disease prevention mission. Under this pilot program, these agencies have new authority to undertake outreach activities to eligible biotech firms and other small business to promote the objectives of the pilot program. In recent years, a number of pharmaceutical companies have taken steps to help in the treatment of those infected with AIDS by providing life-extending therapies to the developing world at reduced costs. These drugs are critically important but the war against AIDS cannot be won unless we develop vaccines against the HIV virus and other neglected diseases. The pharmaceutical and biotech companies hold the key Many steps need to be taken in the war against these diseases. This bill focuses on only one area but a critically important one: vaccine development and distribution. If the public and private sectors work together with energy and commitment, I believe we can develop the vaccines, and once developed, we will win the war against these deadly diseases that victimize so many in the developing world. I ask unanimous consent that the text of the bill be printed in the RECORD. There being no objection the bill was ordered to be printed in the RECORD as follows: Mr. LUGAR. Mr. President, I rise to introduce with Senator KERRY the Vaccines for a New Millennium Act of 2005. The AIDS crisis is devastating sub-Saharan Africa. According to the latest figures from UNAIDS, there are approximately 40 million people living with HIV/AIDS around the world. An estimated 4.9 million people were newly infected last year. This means that every day, some 14,000 people contract HIV/AIDS. Last year, an estimated 3 million people died from AIDS.The AIDS crisis in sub-Saharan Africa has profound implications for political stability, development, and human welfare that extend far beyond the region. In addition to the current crisis in Africa, public health experts warn of a ``second wave'' of countries on the verge of potential AIDS crises, such as China, India, Russia, Nigeria, and Ethiopia. Despite efforts through programs like the President's Emergency Plan for AIDS Relief PEPFAR, the Global Fund to Fight AIDS, Tuberculosis, and Malaria, and the Bill and Melinda Gates Foundation to treat those living with HIV/AIDS and to prevent new infections, the disease is outpacing us. While prevention programs are critical in the struggle to slow the spread of the disease, over the long term, the most effective way to defeat this pandemic is through the development of an effective HIV vaccine. In addition to AIDS, malaria and tuberculosis continue to kill many in the developing world. More than 300 million people are infected with malaria annually, and an estimated 1 million people--mostly children under the age of five--die from malaria. Combined, AIDS, tuberculosis, and malaria kill an estimated 5 million people a year. Yet there are no vaccines for these diseases. While we must remain committed to current prevention and treatment programs, we must also look toward the future to see what hope science has for preventing the spread of these diseases. Historically, vaccines have led to some of the greatest achievements in public health and are among the most cost-effective health interventions. During the 20th century, global immunization efforts have led to the eradication of smallpox and the elimination of polio from the Western Hemisphere, Europe and most of Asia. Vaccines for diseases such as measles and tetanus have dramatically reduced childhood mortality worldwide, and vaccines for diseases such as influenza, pneumonia, and hepatitis now help prevent sickness and death of adults, too. Vaccines for these diseases would play an important role in saving lives in developing countries. Governments, private foundations, and the private sector have made enormous strides. Public-private partnerships have also contributed to scientific advances in this area. However, much more needs to be done. Because of the promise that vaccines hold, Senator KERRY and I are introducing the ``Vaccines for the New Millennium Act of 2005.'' Representative PETE VISCLOSKY is introducing a companion bill in the House of Representatives. Our bill would require the United States to develop a comprehensive strategy to accelerate research and development in vaccines for HIV/AIDS, tuberculosis, malaria, and other infectious diseases that are major killers in the developing world. The strategy would require an increase in public-private partnerships, whereby public entities such as governments, team up with companies or private foundations to conduct research or vaccine trials. The bill would require the United States government to commit to purchase vaccines for these diseases once they are developed through ``advance market commitments.'' Finally, the legislation would create a tax credit for companies that invest in research and development for vaccines for these diseases. I am hopeful that Senators will join Senator KERRY and me in supporting this legislation.