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A Balanced Trade Context for HIV Patent Pool

A Balanced Trade Context for HIV Patent Pool

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iMedPub Journals
 This article is available from: 
http://www.transbiomedicine.com
TRANSLATIONAL BIOMEDICINE
2011Vol. 1 No. 4:3doi: 10:3823/420
© Under License of Creative Commons Attribution 3.0 License
 A Balanced Trade Context for HIV Patent Pool
Member, European Parliament Working Groupon Innovation, Access to Medicines and Poverty-Related Diseases. Reference Advisor for “Drugsfor the developing countries”, SIMIT (ItalianSociety for Infectious and Tropical Diseases).Former Director, Infectious Disease Division,Pistoia city Hospital (Italy).
E-mail:
d.dionisio@tiscali.it
Daniele Dionisio, M.D. Abstract
Background:
Reluctance of the multinational pharmaceutical companies to jointhe Medicines Patent Pool plan for HIV drugs (antiretrovirals-ARVs) might undermineits desirable objective of scaling up long-term, extended access to novel, aordableand appropriate ARV formulations in resource-limited settings.
Methods:
This paper makes an analysis of conicting issues and calls for a tradecontext facilitating a reverse of multinational drug manufacturers’ reluctance to joinpatent pool. To this aim, partnerships between multinational companies are urgedrst to make cutting edge brand xed-dose combination (FDC) ARVs promptly avail-able, and secondly, to allow patent pool agreements to be negotiated immediatelyafterwards. This context rejects clauses that exclude middle-income countries fromsharing in the patent pool.
Expected results:
The suggested trade context can help speed up the partici-pation of originator pharmaceutical companies in the Medicines Patent Pool, whileallowing them to maintain competitiveness, take advantage of incoming joint ven-ture opportunities and circumvent the need for additional incentives. This contextpotentially tackles in an appropriate way the directions of evolution in emergingmarkets, while bringing benets to resource-limited populations, multinational drugcorporations and manufacturers from middle-income countries.
Conclusions:
 This study mixes analysis of health needs and of changing dimen-sions both in legislation and the pharmaceutical industry, with a political economyfocus that considers the interests and capacities of key participants in global HIVtreatment. So compounded, this study oers practical suggestions to stimulate thecurrent debate.
Key words:
HIV patent pool, resource-limited populations, antiretroviral medi-cines, trade context, manufacturers from middle-income countries, multinationals.
Shaping needs
4.8 billion people live in the developing countries: 43 percent of them rely on less than US$ 2 a day. Communicable diseases dis-proportionately aect these populations [1,2]. Drug treatmentsfor these diseases may be very expensive, or toxic, or dicult toadminister, or ineective if microbial resistance spreads. Withregard to HIV infection, only 5 million infected people (out of 15 million in need) were receiving specic medicines (antiret-rovirals-ARVs) in the low- and middle-income countries in 2009,while Sub-Saharan Africa accounts for three-quarters of thesegures and HIV resistance against rst-line ARVs involves about20% of patients in three years time from the beginning of treat-ments [3, 4]. Thus, appropriately formulated novel medicinesthat are safe, aordable and eective are needed.As the current patent system generates incentives for new drugdevelopment in protable markets only, where originator rmscan recoup their research and development (R&D) expensesthrough sales at monopoly high prices, it does not work forthe poor end users in resource-limited countries.Nonetheless, increasing pressure is registered nowadays forstrategies able to promote pharmaceutical innovation and
 
iMedPub Journals
 This article is available from: 
http://www.transbiomedicine.com
TRANSLATIONAL BIOMEDICINE
2011Vol. 1 No. 4:3doi: 10:3823/420
2
© Under License of Creative Commons Attribution 3.0 License
ensure long-term access to treatments by the poorest popula-tions [2, 5]. The resolutions of 61
st
World Health Organization(WHO)’s World Health Assembly included patent pools as partof the whole Global Strategy on Public Health, Innovation andIntellectual Property aimed to increase access to medicines,stimulate R&D related to diseases that disproportionately af-fect the developing world, and delink R&D costs from the endproduct prices [1].A patent pool is created when a number of patents by dier-ent owners are pooled and made available on a non-exclusivebasis to third parties (for instance, the generic drug manufac-turers).Major commitment to putting the patent pool idea into ef-fect, by initially focusing on ARVs, is shown by UNITAID in itsreference eld as an international facility to provide long-termfunding to increase access to drugs and diagnostics for HIV,malaria and tuberculosis (TB) [6]. As of November 1, 2010, the“Medicines Patent Pool” has transitioned out of UNITAID, and isfunctioning as a separate legal entity, though UNITAID contin-ues to support it and is funding its operations under a ve-yearMemorandum of Understanding [7].From public health and political economy perspectives, a keyissue is how to design a suitable trade context for making thepatent pool for ARVs both politically feasible and eective inachieving its goals. This paper contributes to debate and dis-cussion of these issues.
 A Troublesome Matter for MultinationalManufacturers
 The patent pool plan invites patent holders to oer the intel-lectual property (IP) related to their inventions to the Medi-cines Patent Pool [7, 8]. Any company that wants to use the IPto produce or develop ARVs can seek a license from the poolagainst the payment of royalties, and may then produce themedicines for use in developing countries (conditional uponmeeting agreed quality standards). The plan relies on a volun-tary mechanism, meaning its success will depend on the will-ingness of originator pharmaceutical companies to participateand commit their IP to the pool. Quantied benets are ex-pected to encompass, through greatly increased competition,substantially lower prices for second and third-line patent poolgenerated xed-dose combination (FDC) ARVs
1
.So compounded, the pool could help overcome inadequacieslimiting the roles currently played by the brand and generic
1
 
FDC ARVs are multiple antiretroviral drugs combined into a single pill. They may combine dierent classes of ARVs or contain only a single class. These combinations allow people living with HIV to reduce the risk of developing virus resistance to treatments, while making life easier andincreasing adherence by reducing the number of pills to be taken eachday.
2
 
World Health Organization’s TRIPS (Trade-Related Aspects of IntellectualProperty Rights) exibilities: http://www.wto.org/English/tratop_e/trips_e/intel2_e.htm
Voluntary License
- Agreement with the patent’s owner formanufacturing and marketing. Notwithstanding royalty ratesimposition on generic rms, these licenses only imply straightforwardagreements between companies; they do not require changes innational legislation, while including non-exclusivity, openings towardstechnology transfer, access to owner’s data for branded drugs as well aspermission for export.
Compulsory License
- When a poor country government allows tomanufacture domestically or to import copies of patented drugs atprices much cheaper than those imposed by the patent holder andwithout his consent. Both importing and exporting countries need tohave enabling legislation in place (a corresponding CL for export has tobe issued by the exporting country). Prior negotiation with the patentowner for VL rst is required except for situations including extremehealth crisis and not-for-prot government use. Royalties to the patentowner are encompassed by CL rules.
manufacturers in availability and supply of ARVs in resource-limited countries [9]. Generic, mainly Indian, companies aresupplying Sub-Saharan Africa with most of these drugs atprices below those charged by brand enterprises, and untilnow almost exclusively provided FDCs. Brand companies havesupplied almost all newer second/third-line ARVs, stipulatedvoluntary licenses-VLs
2
with generic rms, and pursued dier-ential pricing.Note that the ability of Indian rms to provide these ARVs isdue to the fact that India delayed introduction of pharmaceuti-cal patents until 2005 [10]. This means that most of the rst-linedrugs demanded throughout the developing world (and rec-ommended by the WHO) are not patented in India. Indeed, thefact that the drugs principally in demand were unencumberedby patents in India was a crucial factor in facilitating the mas-sive scaling up of ARV treatment since the early 2000s. The coincidental connection between the drugs demandedand the drugs that Indian rms could supply is changing how-ever [11, 13]. Newer drugs are subject to patent protection inIndia and other supplier countries, which will make the supplyheavily dependent on brand-name rms’ willingness to supplydrugs at low cost or via VLs. There is good reason to believethat, in the absence of generic competition, the sources of sup-ply are unstable. After all, VLs only account for a small fractionof current procurement, while non-enforcement policies haveonly been implemented selectively and at full discretion of thebrand enterprises. Eventually, dierential prices of brand prod-ucts remain (with isolated exceptions) higher than the onesof corresponding generics: frequently, such prices have onlybeen achieved after the threat of compulsory licenses-CLs
2
, orhave sometimes failed to meet the promised country coveragedue to delayed drug registration in entitled countries. Takingthese realities into account, suited cutting edge ARVs for ne-ARVs for ne-gotiations with the brand-name pharmaceutical sector wereselected and put in the November 2009 UNITAID Patent PoolImplementation Plan [6].
 
iMedPub Journals
 This article is available from: 
http://www.transbiomedicine.com
TRANSLATIONAL BIOMEDICINE
2011Vol. 1 No. 4:3doi: 10:3823/420
3
© Under License of Creative Commons Attribution 3.0 License
 The Medicines Patent Pool plan is generating concern amongthe originator pharmaceutical companies. They are reluctantto join the plan owing to fears that patent pooling could re-sult in slashed prots of the brand-name industry in middle-income countries where a signicant percentage of the popu-lation can aord out-of-pocket spending (about 300 millionpeople in India, at least 800 million in China). Inherently, theoriginator companies suspect that patent pooling could resultin an unbalanced surge of innovation, development and re-search activities undertaken by the middle-income countries’(mainly India, China, Brazil, South-Africa, Thailand) manufac-turers, in cutting edge generic FDC ARVs ooding the wealthymarkets, in lost opportunities for VL agreements, as well as ina threat to their overall leadership [13, 14]. Issues also involvethe geographical scope of the licenses, specically who willhave access to the middle-income country markets; the meas-ures to prevent products from entering high-income markets;the bonus for patent owners (such as regulatory incentives,funding sources, or alternate methods of calculating royalties)to include many of the middle-income countries in the poollicenses [6].Reportedly, the originator companies would possibly agree tobe paid a royalty on their patents, but relinquish control overdrug manufacturing, distribution and pricing in the countriesto which the pool applies, limiting their revenues [15]. In short,apart from the fact that the pool would set a negative prec-edent for their core business, these companies are reluctant togive up their patent rights via the patent pool to the advantageof competing industries in the middle-income countries.Meanwhile, though the US National Institutes of Health (NIH) re-cently licensed to the Medicines Patent Pool a royalty-free pat-ent for third-line HIV drug darunavir (DRV), this is not enoughto allow a generic low-cost version to be produced since othermajor manufacturers own dierent DRV patents [16]Likely, the brand-name companies’ fears also take into accountthe economic and balance of power trends in the Asia-Pacicregion, where China’s and India’s trade/business paces ap-pear fast [9, 17]. These insights look understandable now thatSouthern industries highly skilled in innovation, manufactur-ing and marketing are increasingly involved in South-Southdrug commercialization partnerships and in North-South R&Doutsourcing ventures [9, 18-20]. While this environment meansthat trade competition between wealthy and middle-incomecountries is around the corner, it relies on moves (from WHO,World Intellectual Property Organization-WIPO, US President’sEmergency Plan for AIDS Relief-PEPFAR, European Union-EU)and on mounting circumstances, such as enforced CLs bymiddle-income countries, Patent Oces’ resistance to “ev-ergreening” drug patent applications
3
, which reinforce eachother and recommend the originator companies improve their
3
Most common in the pharmaceutical industry, “evergreening” patentapplication refers to the strategy of getting multiple patents that coverdierent aspects of the same product, usually by obtaining patents onimproved versions of existing medicines.
policies to avoid their privileges being put in jeopardy [1, 2, 9,13, 17, 21-31]. These changes add to the cost-saving ARVs bulk purchasing agreements achieved by Clinton HIV/AIDS Initiative(CHAI)-UNITAID/Global Fund coalitions with the generic manu-facturers; the in progress setting of country-owned plants forgeneric ARV, malarial and TB drugs in Sub-Saharan Africa; andthe multiplying free trade areas set up by the developing coun-tries to enhance trade with one another [13, 17, 20, 32, 33]. Taken together, these realities translate as backing to the coreinterests of leading generic manufacturers and could result,should the originators refuse to join the patent pool, in CLscharged with constraining royalty clauses and tighter room fornegotiations.Overall, the conicting matters reported here can actually pre-vent the multinational manufacturers from participating in theMedicines Patent Pool plan and may well support urgency fora new trade context formulated to reverse their reluctance to join. To this aim, partnerships between originator companiesare needed rst to make cutting edge brand xed-dose com-bination (FDC) ARVs promptly available, and secondly, to allowpatent pool agreements to be negotiated straight afterwards.Clauses that exclude middle-income countries from sharing inthe patent pool must be rejected.
Partnerships for Cutting Edge Fixed-DoseBrand HIV Drug Combinations
Partnerships between originator companies are required in or-der to produce innovatory second/third-line brand FDC ARVsand then to allow patent pool agreements to be negotiatedimmediately afterwards. This would allow the brand-namemanufacturers to keep R&D standards and marketing power,while proting by additional joint venture opportunities, cir-cumventing the need for further incentives to join the patentpool, and avoiding risks of CLs. Without counting, from anethical perspective, the gain in prestige and corporate socialresponsibility for making up-to-date, adherence-enhancingdrug formulations available while meeting pressures from theglobal health community. The suggestion above looks ready to be implemented. Dealsbetween originator companies have, indeed, been struck asfar as joint manufacturing and production of second/third-line brand FDC ARVs are concerned: for instance, the GlaxoS-mithKline-Pzer tie-up to merge HIV businesses into the newcompany ViiV Healthcare; and the Bristol Myers Squibb-Gileadventure for efavirenz (EFV)/emtricitabine (FTC)/tenofovir (TDF)FDC ATRIPLA® [13, 34]. These ventures would expectedly createadditional partnerships now that a heat-stable 100 mg tabletversion of Abbott ritonavir-RTV (which is the only sanctionedbooster protease inhibitor-PI drug to be taken in conjunctionwith other PIs to enhance eectiveness) has been approved byboth the European Medicines Agency (EMA) and the US Foodand Drug Administration [35]. The expectations for additional

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