1 “Access to Drugs: International Policies” - CLIA (Italian Network for International Fight against AIDS), Italian Society for Infectious and Tropical Diseases (SIMIT), Division of Infectious Diseases, Pistoia Hospital, Pistoia, Italy
2 Italian Cooperation Headquarters at the Italian Ministry of Foreign Affairs, CLIA, Directorate General for Development Cooperation, Rome, Italy
3 Division of Infectious Diseases, Pistoia Hospital, Pistoia, Italy
Patent pools for second and third-line Fixed Dose Combination (FDC) antiretroviral drugs (ARVs) should not be delayed as they are instrumental to urgent public health needs in the under-served markets.
Nonetheless, multinational originator companies still seem to perceive patent pooling for ARVs as a minefield that would offer the generic competitors lots of deeply exploitable opportunities, to the detriment of patent owner’s rights.
This paper analyses the brand industry concerns, while looking for a strategy up to a really equitable and free world market, without any discrimination between end-users in wealthy and resource-limited countries.
This strategy would urge partnerships between originator companies first to make newer FDC ARVs quickly available and allow patent pool agreements with generic counterparts to be negotiated straight afterwards.
The patent pool strategy highlighted in this paper would assert the primacy of health over for-profit policies, while aligning with the 61st WHO’s Assembly recommendations and G7, G8 and World Trade Organisation’s warnings and pledges against trade protectionism.
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Designing ARVs Patent Pool Up to Trade & Policy Evolutionary Dynamics
MEETING THE NEED
Patent pools are part of May 2008-adopted World Health Organization-WHO’s Global Strategy on Public Health, Innovation and Intellectual Property to help increase access to medicines [1Sixty-first World Health Assembly 24 May 2008: Global strategy and plan of action on public health, innovation and intellectual property Available from:http://www.who.int/gb/ebwha/pdf_files/A61/A61_R21-en.pdf].
Patent pools for antiretrovirals (ARVs) cannot be given up or delayed further owing to urgent health needs in the under-served markets: full availability of appropriate and affordable FDC ARVs including second and third-lines is top priority for the worst-off in the developing countries [3WHO, UNAIDS, UNICEF. Towards Universal Access: scaling up priority HIV/AIDS interventions in the health sector (June 2008 progress report) Available from:http://www.who.int/pub/towards_universal_access_report_2008.pdf-5MDG 8 Task Force Report: Delivering on the Global Partnership for Achieving the Millennium Development Goals, United Nations. New York, August 2008. Available from: http://www.un.org/esa/policy/mdggap].
Attaining this goal would effectively counter bitter reality witnessing that ARVs are primarily developed for wealthy country markets, while trials are focused on coping with registration requirements in these countries and key research matters for resource-constrained populations are often only tackled long after drug registration and rolling-out in the Europe and USA [6van Roey J, von Schoen-Angerer T, Ford N, Calmy A. How developing world concerns need to be part of drug development plans: a case study of four emerging antiretrovirals Drug Discov Today 2008 [Accessed: April 2009];13: 601-5. Available from:http://www.msfaccess.org/reso urces/key-publications/key-publication-detail/?tx_ttnews%5Btt_news% 5D=1437&cHash=c7ed6240d0].
High-tech patent pool models not pertaining to health sectors (i.e., those involving technologies that require common standards, such as MPEG-2, DVD-video, DVD-ROM and radio) have already gained agreement as fitting instruments to convey shared interests between peers towards increasing profits and marketing power [10Showalter B, Kurth T. New uses for patent pools (2008, Intellectual Property Today) Available from:http://www.iptoday.com/articles/2008-9-showalter.asp].
Medicines, instead, are trickier domain, particularly where ARVs are concerned. Actually, the situation for ARVS is different because their development remains profitable for the Western market.
Briefly, pooling ARV drug patents looks like it would be felt as a forcing possibly resulting in slashed brand industry profits in the under-served markets, in illegal flows of generic new FDC ARVs into the wealthy markets, in unbalanced boosting on innovation, development and research project activities currently pushed by generic drug manufacturers (mainly from India, China, Brazil, South-Africa and Thailand) as a premise to enhanced competion and forays into the Western markets. Again, pooling patents could be felt as a risk to waive opportunities for fruitful voluntary license-VL agreements, and as a threat to keeping up brand leadership in research and development (R&D) of new therapeutic agents [11Kaplan W. Fostering R&D and promoting access to medicines: locating common ground: operationalising patent pools for ARVs. New ICTSD series on New Opportunities through Innovation. 22-26 October 2007, Bellagio, Italy Available from: www.iprs online.org/ictsd/Dialogues/2007-10-22/8%20ThinkPiece_Kaplan2.pdf-14UNITAID patent pool at Mexico City conference. 6 August 2008, Knowledge Ecology International-KEI. Available from:http://www.keionline.org/index.php?option=com_jd-wp&Itemid=39&p=135].
Brand industry feelings on HIV drug patent pools likely take into account trade&policy plus R&D tricky balances on evolutionary world chessboard, where China’s and India’s paces look very fast [15Dionisio D, Fabbri C, Messeri D. HIV drug policies and South markets: settling controversies Therapy 2008 [Accessed: April 2009];5: 707-17. Available from:http://www.futuremedicine.com/doi/pdfplus/10.2217/14750708.5.5.707].
With regard to China, feelings may include awareness that today 2,500 life sciences faculty at US research universities are native Chinese, as are an estimated 10% to 20% of scientists in the labs of US drug and biotech companies: now, in a steadily increasing reverse migration to China, these US-trained Chinese scientists are setting up high-standard biotech start-ups, contract-research companies, and university labs on their native mainland [16Engardio P. Chinese Scientists Build Big Pharma Back Home. BusinessWeek. September 4, 2008 Available from: Available from: http://www.businessweek.com/print/magazine/content/08_37/b4099052479887.htm].
In the meanwhile, the number of patent applications from China and India filed at the US patent Office has been rising rapidly [4Dionisio D, Gass R, McDermott P, et al. What strategies to boost production of affordable fixed-dose antiretroviral drug combinations for children in the developing world? Curr HIV Res 2007 [Accessed: April 2009];5: 155-87. Available from:http://www.ingentaconnect.com/content/ben/chr/2007/00000005/00000002/art00002].
China and, to a lesser extent, India are, moreover, the major suppliers of active pharmaceutical ingredients (APIs) for ARVs to the developed and developing world [15Dionisio D, Fabbri C, Messeri D. HIV drug policies and South markets: settling controversies Therapy 2008 [Accessed: April 2009];5: 707-17. Available from:http://www.futuremedicine.com/doi/pdfplus/10.2217/14750708.5.5.707]. This gives both countries power in influencing ARV drug price evolution. Indeed, as APIs do represent the largest components of direct manufacturing costs (55-99%), significant decreases in the price of ARVs will depend on a concomitant decrease in the cost of APIs [17Pinheiro E, Vasan A, Kim JY, et al. Examining the production costs of antiretroviral drugs AIDS 2006; 20(13): 1745-52.]. Substantial research, deeply involving industries in middle-income countries, is dealing now with driving API cost reduction for access [18Pinheiro ES, Antunes OA, Fortunak JM. A survey of the syntheses of active pharmaceutical ingredients for antiretroviral drug combinations critical to access in emerging nations Antiviral Res 2008; 79: 143-65.].
Feelings above couple with the concerns bound up with threats to patent applications for brand ARVs, as per recently opposed refusals by India (including darunavir and tenofovir) and Brazil and predictably hard patentability in India of novel Abbott’s heat-stable RTV now that a corresponding Indian generic has long before come on line [15Dionisio D, Fabbri C, Messeri D. HIV drug policies and South markets: settling controversies Therapy 2008 [Accessed: April 2009];5: 707-17. Available from:http://www.futuremedicine.com/doi/pdfplus/10.2217/14750708.5.5.707, 19Treatment access: Indian generic heat-stable ritonavir. November-December 2006, HIV Treatment Bulletin, I-Base published Available from: http://www.i-base.info/htb/v7/htb7-12/indian.html].
Eventually, brand industry feelings may also arise from a proposed law in India to allow universities to patent publicly-funded research discoveries and increase collaboration with Indian industries [21Padma TV. Patent pledge to Indian universities Nature 2008 [accessed April 2009];456: 685-. Internet http://www.nature.com/news/2008/081210/full/456685a.html].
Fixed-Dose Combination ARVs by Generic Manufacturers
Concerns of originator companies over patent pooling also ground on prospects alerting to the fact that UNITAID-Clinton Foundation alliance has created a minefield for ARVs policies currently driven by the brand pharmaceutical sector. The Clinton Foundation HIV/AIDS Initiative (CHAI) is, indeed, increasingly lowering the prices of ARVs by partnering with UNITAID and generic pharmaceutical manufacturers [23UNITAID and the Clinton HIV/AIDS Initiative announce new price reductions for key AIDS medicines UNITAID Report, 17 April 2009. Available from: http://www.unitaid.eu/index2. php?option=com_content&task=view&id=148&pop=1-25Clinton Foundation: Request for Proposals for Supply of UNITAID-Financed Pediatric and/or Adult Second-Line Antiretrovirals for period of March 2009 - February 2010 (December 15, 2008) Available from:http://www.clintonfoundation.org/what-we-do/clinton-hiv-aids-initiative/informationcenter-resources].
In the meantime, lists of countries eligible for differential pricing have been made available by Abbott, Bristol-Myers Squibb, Boehringer-Ingelheim, Gilead, GlaxoSmithKline, Merck & Co. Inc, and Roche brand enterprises: unfortunately, the prices they offer are almost always quite higher than the reduced ones by CHAI for the corresponding generics to countries in its consortium [22Untangling the web of antiretroviral price reductions: 11th ed. July 2008: Campaign for Access to Essential Medicines. Medecins Sans Frontieres. Geneva, Switzerland. Available from: http://www.accessmed-msf.org/fileadmin/user_upload/diseases/hiv-aids/Untangling_the_Web/Untanglingtheweb_July2008_English.pdf, 26Chien CV. HIV/AIDS drugs for Sub-Saharan Africa: how do brand and generic supply compare? PLoS ONE 2007 [Accessed: April 2009];3: e278. Available from:http://www.plosone.org].
It is risky for the brand corporations to keep prices higher than Clinton’s, especially if the counterpart is a CHAI consortium member country. The magnitude of risk is perceivable by considering that:
some FDC ARVs, still solely produced by generic firms (Table 1), have been made available to resource-constrained countries only thanks to CHAI discounts [15Dionisio D, Fabbri C, Messeri D. HIV drug policies and South markets: settling controversies Therapy 2008 [Accessed: April 2009];5: 707-17. Available from:http://www.futuremedicine.com/doi/pdfplus/10.2217/14750708.5.5.707].
Overall, the perspectives listed above are feared to possibly reshape or even overturn the trade balances bound up with profitable ventures currently working between originators and, mainly, Chinese and Indian drug makers as far as R&D sectors are specifically concerned (see later) [27Engardio P, Weintraub A. Outsourcing the Drug Industry. BusinessWeek, September 4, 2008 Available from: http://www.businessweek.com/print/magazine/content/08_37/b4099048471329.htm].
Intriguingly, brand industry positions towards patent pools for ARVs may also depend on strategies bound up with their pipelines for new ARV drug development. Understandably, exploitation of patent full rights until expiry could be an option where no new ARVs are in the pipeline. On the contrary, the more drugs are in pipeline, the more brand industry availability will expectedly emerge towards flexible transactions, so keeping up as much options as possible and avoiding major risks in the future.
Again, openings could happen when exchange for royalty payment, as in UNITAID model, would possibly compensate for profit losses bound up with the rolling out of generic FDC ARVs that include second-line principles whose patentability is being pursued by the brand patent owner (Table 1).
Additional food for thought could be solicited by relevant questions:
What extent is the real originator companies’s interest towards emerging markets where a number of well-off elites, who can afford out-of-pocket spending (at least 300 million people in India, many more in China), currently live?
Owing to FDCs are no doubt the ARV therapy backbone, why should originator companies hesitate to boost patent pool strategies as set up for Bristol-Myers Squibb & Gilead Sciences’s ATRIPLA® (efavirenz, emtricitabine, and tenofovir FDC), to properly address at least adherence?
GATHERING STEAM FOR AWARENESS
On the whole, conflictual insights above would suggest the originator companies to increase awareness and take the lead towards shrewdly adopting UNITAID patent pool model. Otherwise, as seemingly foreseeable from trade&policy world trends, their opportunities could be in jeopardy or reduced in the future.
Indeed, the agreement on TRIPs (Trade Related Aspects of Intellectual property Rights) of World Trade Organization (WTO) does not formally obstruct the UNITAID patent pool model [30World Trade Organisation Overview: the TRIPS Agreement 2005 Available from: http://www.wto.org/English/tratop_e/ trips_e/intel2_e.htm [Accessed: April 5th, 2009];, 31Abbott FM, Reichman JH. The Doha round’s public health legacy: strategies for the production and diffusion of patented medicines under the amended TRIPS provisions J Int Econ Law 2007; 10: 921-87. Available from:: http://www.yahoo.com], while steadily increasing pro-pooling overpressure is registered from public opinion, mass media, NGO networks, UN Agencies, as well as from governments and firms in the developing countries. Taken together, these realities could result, if the brand multinationals did refuse to enter the pool, in enforced compulsory licenses (CLs) [11Kaplan W. Fostering R&D and promoting access to medicines: locating common ground: operationalising patent pools for ARVs. New ICTSD series on New Opportunities through Innovation. 22-26 October 2007, Bellagio, Italy Available from: www.iprs online.org/ictsd/Dialogues/2007-10-22/8%20ThinkPiece_Kaplan2.pdf]. These would stand as detrimental to brand enterprise expectations, predictably due to tighter room for negotiations and constraining clauses over enjoyable royalties. Compulsory licensing (CL) would really be an option in such a case to force into reasonable terms patent holders deemed to be non-cooperative in the face of serious health risks.
CL feasibility would be, anyway, hard bet now that protectionist policies and Free Trade Agreements (FTAs) are still driven by USA and European Union (EU) in spite of recent WTO, G7 and G8 leaders warns and pledges against trade protectionism [32G-7 finance ministers vow to cooperate, resist protectionism. 18 February 2009, International Centre for Trade and Sustainable Development Available from: http://ictsd.net/i/news/bridgesweekly/41042/, 33WTO warns against protectionism, promises increased monitoring (12 February 2009, International Centre for Trade and Sustainable Development) Available from: http://ictsd.net/i/news/bridgesweekly/40499/]. Nonetheless, in mid-long term perspective, CL feasibility could impose itself as a result of confluent factors, among which:
Weakening USA trade&policy appeal over South-East Asia, South-America and Africa due to the emergence of strong competitors such as China, India, and Russia.
Weakening USA attraction power and influence over international chessboard.
TAILORING MODEL FOR EQUITABLY DRIVEN FREE WORLD MARKET
Overall scenarios above look like they are enough to advise the originator companies that joining efforts into long-term shared strategy, as part of UNITAID patent pool, would be mandatory to fairly attune the interests of all counterparts (including end-users and generic and brand-name enterprises).
Coherently, UNITAID model should play as key component of a more complex strategy up to going beyond UNITAID proposal itself and equitably countering brand market erosion deemed to follow the mere patent right giving up to the advantage of generic drug industry.
This strategy should encompass full availability on the market of second and third-line brand FDC ARVs as a result of partnerships between originator companies.
Multinational pharma companies are, indeed, currently striking deals with Chinese and Indian drug researchers to outsource testing for drug candidates and replenish drug development pipelines, while accelerating, thanks to the efficiency of Eastern laboratories, a development process and saving billions of dollars in costs (in India, five PhD chemists can be employed for the cost of one in the West). Concurrently, Eastern researchers are benefitting through profit shares and intellectual property rights, while being aware that these collaborations will spur new breakthroughs in medical research and develop a local industry originally built on mere generic drugs [27Engardio P, Weintraub A. Outsourcing the Drug Industry. BusinessWeek, September 4, 2008 Available from: http://www.businessweek.com/print/magazine/content/08_37/b4099048471329.htm].
Taken together, these realities mean that peer trade competition between wealthy and middle-income countries is already round the corner.
As core message, the whole insights above would urge partnerships between originator companies first to make newer FDC ARVs quickly available (including combinations aligned with WHO’s recommendations), and allow patent pool agreements with generic counterparts (as per UNITAID model) to be negotiated straight afterwards.
This strategy looks like it would be up to attaining a really free and equitably driven world market.
Indeed, while securing the generic producers opportunities and equipment to make and roll out second and third-line (either for adults or children) new FDC ARVs, it would not prevent the generic and brand counterparts from negotiating mutually profitable VLs, if any. To the same extent, this strategy would be up to allowing the originator firms to still keep up competitiveness as far as bulk purchasing agreements for new FDC ARVs with CHAI-UNITAID are concerned.
Hopefully, the highlighted strategy should include getting round and lifting a clause in UNITAID patent pool model that would forbid selling to High Income Countries (World Bank defined) FDC generic ARVs resulting from patent pools. To this aim, compulsorily aligning prices of these generic formulations with the corresponding brand ones on wealthy markets should be enough measure against unfair competition.
Overall, the highlighted model would spread good treatment adherence all over the world, while scaling up, on sustained basis, equitable access to appropriate and affordable new FDC ARVs, with no discrimination between end-users in wealthy and resource-limited countries.
Again, upon brand industry angle of view, the compounded strategy here would allow to keep up R&D standards and marketing power, while enjoying the advantages from new partnerships, avoiding risks of CLs, and predictably getting round the need for additional incentives to enter patent pools.
Upon generic industry perspective, instead, this model would extensively boost innovation, joint ventures and competitiveness also beyond the under-served markets.
The multi-pronged strategy envisaged in this contribution would recommend originator companies to improve their policies, while tackling evolutionary directions from emerging markets and bringing opportunities to the generic counterparts. So compounded, it would promote and enhance:
For-equity dynamics in drug trading policies, while meeting the interests of generic and brand manufacturers.
Effective response to HIV resistance mutations urging availability of second/third-line FDC ARVs in low-income countries.
R&D and international standard innovation plans.
South-South and North-South partnerships.
Opportunities for researchers working in developing countries.
Domestic employment and national/international market increases.
Indigenous capacity to generate, manage and use technology to address domestic health needs.
Setting up of country-owned plants for generic ARVs in Sub-Saharan Africa, so adding strength for profitable negotiations, while drawing originator companies into more flexible agreements.
Fulfilment of prospects above will depend on crossing policies of multiple counterparts, including European Union, USA, China, India, Brazil, South Africa and Thailand’ s government directions. While the end-results of these policies are hardly predictable, available trends seem to advise that the highlighted strategy would be an attuned way in long-term perspective, by complementing, rather than replacing, current regimens.
The strategy suggested here aligns with both the 61st WHO’s Assembly recommendations and G7 finance ministers, G8 and WTO’s recent warnings and pledges against protectionist policies.
It would impact, anyway, as a step ahead in establishing a new era: that actually asserting, through equitably driven free world market, the primacy of right to health over for-profit policies.
D. Dionisio conceived, designed and wrote the article.
V. Racalbuto and D. Messeri shared in the draft preparation and participated in overall interpretation, revision and harmonisation.
Author Note: While this paper was in final press stage, 12th Edition “Untangling the web of antiretroviral price reductions” was released at MSF website (http://utw. msfaccess.org/ 3 December 2009). Changes there do not affect the contents of this paper.
Pinheiro E, Vasan A, Kim JY, et al. Examining the production costs of antiretroviral drugs AIDS 2006; 20(13): 1745-52.
Pinheiro ES, Antunes OA, Fortunak JM. A survey of the syntheses of active pharmaceutical ingredients for antiretroviral drug combinations critical to access in emerging nations Antiviral Res 2008; 79: 143-65.
Abbott FM, Reichman JH. The Doha round’s public health legacy: strategies for the production and diffusion of patented medicines under the amended TRIPS provisions J Int Econ Law 2007; 10: 921-87. Available from:: http://www.yahoo.com