Transcript The Good, the Bad and the Ugly

Apple Pie, Motherhood
and
Global Health
Ashley J. Stevens
Office of Technology Development
Boston University
MATTO Professional Development Seminar
July 25, 2007
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Agenda
 Global Health – the 35,000 foot view
 How a University got caught in the middle
 Don’t just talk about the weather – DO SOMETHING
 Some creative licensing approaches
 If we don’t do something ourselves, someone may force us to
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The Pharmaceutical Industry from 35,000 Feet
The Pharmaceutical Industry from 35,000 Feet
 Whoa, do I actually see two different industries down there?
 The pharmaceutical discovery industry
 The generic pharmaceutical industry
 Largely non-overlapping
 Frequent litigation over patent expiration
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The Pharmaceutical Discovery Industry
 The high visibility part of the industry
 Includes the biotech companies
 Discovers and develops new drugs
 Protects them with as many patents as it can think of
 Prices them for the value they deliver
 Protected from competition by the patents
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The Generic Pharmaceutical Industry
 Take over as patents expire
 Enabled by the Hatch-Waxman Act, 1984
 Products approved by FDA under Abbreviated New Drug
Applications (ANDA)
 Established the 271(e) exemption under patent laws
 Scope dramatically expanded by Supreme Court in Integra vs.
Merck
 First company to win ANDA Approval gets 6 months of coexclusivity with patent holder
 Then other companies can receive approval
 Competition results in cost+ pricing
 Drug prices typically decrease 80 – 90%
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The Global Health Pharmaceutical Challenges
 How do we make new, patent protected medicines available in
developing countries at cost+ pricing?
 How do we develop treatments for diseases that aren’t a
problem in developed countries?
 How do we deliver them?
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Developing Countries and the Pharmaceutical Industry
 Diseases tended to be different from those of the developed
world
 Infectious diseases
 Parasitic
 Treatments were old and generic
 Occasionally there was serendipity
 Merck’s Ivermec for cattle worm turned out to be highly effective
for River Blindness (a parasitic disease)
 Merck has given away Ivermectin to S. American and African
countries to eliminate River Blindness
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Developing Countries and the Pharmaceutical Industry
 Then along came AIDS
 A new disease with new – i.e., patent protected – treatments
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So, How Yale Get Caught in the Middle?
 Dr. Jerome Horowitz of the Detroit Institute of Cancer Research
(now the Barbara Ann Karmanos Cancer Institute) synthesized a
number of nucleic acid analogues as anti-cancer compounds in
the early 1960’s:
 AZT
 ddC
 ddI
 d4T
 etc.
 Weren’t effective against cancer
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© 2005 Ashley J. Stevens. All Rights Reserved. Do not copy or modify
The Zerit Story
 In 1985, Burroughs Wellcome conceived of the idea of
using AZT to prevent HIV replication
 Dr. Samuel Broder at NCI set up a screen to test for
screened for antiretroviral activity
 Demonstrated efficacy of AZT
 Subsequently showed several additional Horowitz
compounds were effective
 Patented, licensed by NIST and successfully developed:
 ddI (Videx, BMS)
 ddC (HIVid, Roche)
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The Zerit Story
 Drs. Tai-Shun Lin and William Prusoff of Yale University
discovered d4T's ability to treat HIV/AIDS
 Funding from NIH and BMS
 Gave BMS an exclusive option to an exclusive license
 Yale filed for a method of treating patent
 US patent 4,978,655 issued December 18, 1990
 Bristol-Myers Squibb exercised option; license signed on
January 12, 1988
 License gave BMS right to determine where to file patents
 BMS elected to file in Europe, Japan, Canada, etc.
 Included S. Africa, Mexico, Egypt
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© 2005 Ashley J. Stevens. All Rights Reserved. Do not copy or modify
The Zerit Story
 In 2000,Toby Kasper of Médecins Sans Frontières compiled
a list of essential medicines that the world needed access
to
 Started pushing for generic versions of anti-retrovirals in
2000
 CIPLA offered to supply d4T for 5 ¢/tablet
 39 companies filed suit to prevent MSF buying generics
 Zerit was on the list
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© 2005 Ashley J. Stevens. All Rights Reserved. Do not copy or modify
The Zerit Story
 Enter Amy Kapczynski
 First year Yale Law Student
 Now an Assistant Professor at UC Berkeley Law School
 Had met Toby at an AIDS conference in Durban in July 2000
 Toby identified that Yale held the patent and contacted Amy
 She secured support of Prusoff and Michael Merson, Dean
of Yale’s School of Public Health
 Former head of WHO AIDS program
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© 2005 Ashley J. Stevens. All Rights Reserved. Do not copy or modify
The Zerit Story
 Got a story in the student newspaper March 2, 2001
 Organized a petition
 Got 600 signatures
 NYT ran a story March 11, 2001
 On March 14, 2001 BMS announced it would not enforce the
patent in S. Africa and offered to sell d4T for 7.5¢/tablet
 Eventually signed a non-suit to Aspen Pharmaceuticals
 Within a month, Bristol-Myers Squibb, GlaxoSmithKline,
Pfizer, Abbott, Hoffman-La Roche, and Boehringer
Ingelheim issued a statement promising to lower costs in
developing nations
 Lawsuit dropped
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© 2005 Ashley J. Stevens. All Rights Reserved. Do not copy or modify
Lessons Learned
 This could happen at any university TODAY
 Universities routinely give an exclusive option to an
exclusive license to industrial research sponsors
 University licenses always give the licensee the right to
choose where to file patents overseas
 Generally, universities won’t file foreign without a licensee to
reimburse
 It’s imperative that universities include global health
provisions in our licenses when licensing health care
inventions with relevance to both the developing and the
developed world
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© 2005 Ashley J. Stevens. All Rights Reserved. Do not copy or modify
A Recent Example
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© 2005 Ashley J. Stevens. All Rights Reserved. Do not copy or modify
Gardasil
 Protects against cervical cancer and genital warts
 4 strains of HPV
 Discovered by Ian Fraser at University of Queensland in 1991
 Licensed by UniQuest to CSL, Inc., Melbourne, VIC
 CSL licensed to Merck in March 1995
 Georgetown has key HPV patents also licensed to Merck and GSK
 Approved in US June 8, 2006
 World’s most expensive vaccine -- $360 for three shots
 Affordability in developing countries already being
questioned
 Major focus of UAEM Fall 2007 conference
 Georgetown is one of UAEM’s next two targets
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Zemplar
 Invented by Hector de Luca, University of Wisconsin
 Licensed by WARF to Abbott
 UAEM’s second new target
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Where Are We Today?
Today
 Enormous good came from the Zerit case
 Seems to be a growing acceptance of the concept of differential
pricing
 E.g. WSJ Interview with Jean-Pierre Garnier, CEO Glaxo, July 9,
2007
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 WSJ: How has Glaxo changed its HIV-drug pricing in the developing world
since you started running the company?
 Dr. Garnier: ………….80% of the market for pharmaceuticals comes from
20% of the world-wide population. I'm not going to be CEO of a company
that just works for rich countries. And even within rich countries, by the
way, you have holes in the safety net that are part of the equation.
 WSJ: What has that meant in HIV?
 Dr. Garnier: To me, it became very obvious that we had to go much further
than to give discounts [on drugs]. We had to make basically a
philosophical statement that for the very poor countries of this world, we
were going to sell our drugs without making a profit, completely not for
profit. And overnight we did this. And that allowed the consumption of HIV
drugs in Africa to increase dramatically, exponentially. Overnight we went
from very little to hundreds and hundreds of millions of tablets. Then we
went one step further and said, why don't we give licenses to generic
companies [to make our drugs], particularly local companies. Maybe they
can make it even cheaper.
Today
 Pharma’s have accepted that they must also help develop drugs
for developing country diseases
 Seems to have emerged since 1999
 E.g., Novartis Institute for Tropical Diseases in Singapore
 Not-for-profit
 ~200 employees
 “No-profit No-loss” model
 Hand over development to PPP’s
 Involve local companies, doctors, clinics
 Supply the bulk of the clinical development funding
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Today’s Fault Line
 Middle Income Countries
 e.g., Abbott’s recent dispute over mandatory licensing/new
product registration in Thailand
 Maybe we’re going to need three tier (or four tier) pricing, not just
two tier pricing
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How Can Universities Help?
“Universities play a crucial role in the
development of new medicines and
medical technologies. How they patent
and license these technologies can help
determine whether individuals in
developing access to the end products of
university research”
Access to Essential Medicines and University Research: Building Best Practices
Yale University
September 2002
Problems
 Academic institutions rarely develop a finished product
 Licensee integrates IP from various sources
 Adds its own IP and know-how
 Academic institution can impose terms on its own IP
 Not on licensee’s IP
 Above all else, must not do anything to deter licensing and
development
 Mainly an issue with diseases with global impact – both the
developed world and the developing world
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Let’s think about how we get a university drug
discovery to the global market
University’s Objectives
1. Get the technology developed
2. Get the technology to the developing world at affordable prices
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Let’s Look at Some Licensing Approaches
License for Developed Countries
– Require Developing Country Development
Require Developing Country Development
 Require public sector development as a condition for private
sector rights
 Increase royalty rate on private sector sales if public sector
milestones not met
Comments:
 Provides the right incentives and penalties
 Licensee refusal to accept a milestone would be a good basis to
exclude developing countries from Territory
 Then could retain rights and seek a developing country
licensee
 Doesn’t address pricing
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License for Developed Countries
– Include Developing Country Milestone and Pricing
Licensee shall seek
registration in a developing
country by……….
Licensee shall make available
in developing countries at
prices no more than 50%
more than fully burdened
manufacturing cost
Don’t Patent in Developing Countries

X
DevCo
Pharma 1
DevCo
Pharma 2
Don’t Patent in Developing Countries
 University most unlikely to
 Require licensees not to patent in developing countries
Comment
 Loss of control of development
 Remember, the issue is the licensing, not the patenting
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Separate Licensee(s)
Separate License(s)
 Exclude developing countries from primary license
 Exclusive license for developed country
 License non-exclusively in developing countries
Comment
 May make license less attractive to primary developer
 Developing countries will have to develop their own product
 Licenses:
 Don’t have to require royalties
 Patent cost burden minor in the grand scheme of things
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Drug for Developing Country Markets Only
DevCo
Pharma 1
Drug for Developing Country Markets Only
 Patent in developing countries and license to a developing
country pharmaceutical company
Comment
 Developing country pharmas have already had a big impact on
world pharmaceutical pricing
 CIPLA/Anti-retrovirals
 Will they become more developed country-like (i.e., greedy) as
domestic R&D capacity develops?
 Building technology development and transfer capability
important for long term economic growth
 Could retain the right to grant additional licenses
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Require Mandatory Sublicensing
Big
Pharma
DevCo
Pharma 1
Require Mandatory Sublicensing
 Mandatory sublicensing for developing countries (licensee)
or
 March-in rights (licensor)
Comments:
 Can require sharing of registration data
 Can include provision of bulk active at cost or cost plus
 Requires a lot of ongoing university-licensee interaction
 Starts to approach “Burdensome”
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Grantback
2.5%
5%
Big
Pharma
DevCo
Pharma 1
Universities Allied for Essential Medicines
 Evolved from the Yale group
 Nationwide, many chapters
 Two national meetings a year
 Well organized and effective
 Philadelphia Consensus Statement
 November 16, 2006
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© 2005 Ashley J. Stevens. All Rights Reserved. Do not copy or modify
UAEM’s Equitable Access License (“EAL”)
 Single licensee for developed countries
 Multiple licensees for developing countries
 Require a developed country licensee to grant back
manufacturing improvements to University
 University licenses improvements to developing country licensee
in return for a 5% royalty
 Developed country licensee gets 2.5%
Comment
 Mandated in Leahy Bill S. 4040
 Currently on back burner, but could re-emerge
 Pharma’s have reacted negatively to the provisions
 Pharma has shown they’ll make technologies available voluntarily
 E.g., Eli Lilly capreomycin and cycloserine for MDR-TB
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Moral
 Universities need to take action
 Universities should include global health provisions in their
healthcare licenses
 Experiment and see what works
 ROYALTY-FREE for developing countries
 How can universities lead effectively and expect everyone in the chain
to strive for lowest possible developing country prices if we demand a
profit
 It’s time for models and experimentation, not legislation
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BU’s Model: Non-Suit
Big
Pharma
DevCo
Pharma 1
DevCo
Pharma 2
Non-Suit
 Include Non-Suit provisions for developing countries
 Allows additional licensees to enter market in developing
countries
 Royalty-free in non-suit countries
Comment
 Allows primary licensee to participate in developing country
markets
 Doesn’t solve the Improvement problem
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Mechanism
 Define Market Countries
 All others are Non-market Countries
 Define Public Sector broadly (Government, UN, WHO, World Bank,
NGO’s – OXFAM, MSF, Red Cross/Red Crescent, Bill and Melinda
Gates Foundation, etc.)
 Include in Grant a Non-Suit for sales in Non-Market Countries to
 Public Sector purchasers
 Distinctive trade dress
 Exclude sales under Non-Suit from definition of Net Sales
(i.e., royalty free)
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U. of California Davis Approach
 Reservation of humanitarian rights
 Analogous to reservation of government rights and research
rights
Comments:
 UC is still experimenting with it
 Getting some push back
 Negotiation is likely to add definitions much like the details in
the BU approach
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Sources of Models
 AUTM – Technology Managers for Global Health
 Special Interest Group
 Meets annually
 No model language
 Stanford/Group of Ten “Nine Points to Consider”
 Global Health is #9
 No model language
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Proposal
 MATTO should take the lead and make model language available.
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Do something!
Further Reading
 “Intellectual property Management in in Health and Agricultural
Innovation”
(aka the MIHR Handbook)
ed. Anatole Kratinger et al (inc. Lita)
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Further Reading
 Mary Moran et al.
“The New Landscape of Neglected Disease Drug Development”
London School of Economics and The Wellcome Trust
September 2005
(available from The George Institute, Sydney Australia – look for
Mary Moran)
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Further Reading
 Amy Brewster and Steve Hansen
“Facilitating Humanitarian Access to Pharmaceutical and
Agricultural Innovation”
Innovation Strategy Today 1 (3), 2005 (AAAS)
available from: www.biodevelopments.org/innovation/ist3.pdf
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