Transcript University IP Policies and Access to Medicines Yale AIDS Network Currently, what do universities do with the products of research? • If they think.

University IP Policies and Access
to Medicines
Yale AIDS Network
Currently, what do universities do with the
products of research?
• If they think an invention can be commercialized, they patent it.
• Universities then license the patent to industry, which will
further develop and market the invention.
• Universities may grant either exclusive or non-exclusive licenses
to industry.
- An exclusive license gives a single company the sole right to
develop and sell the invention.
- A non-exclusive license allows many companies to use and
sell the invention.
• In either case, universities receive royalties and/or other
payments in exchange for the license.
Why Care About University Patenting?
• While academic R&D is a small proportion of total U.S. R&D, academic basic
research comprises roughly 40-50 percent of total U.S. basic research.
• Nearly 60 percent of academic R&D is funded by the federal government.
• Patenting can result in limited access to research outputs.
Source: NSF Science and Engineering Indicators, 2002.
th
20
For Most of
Century, Universities
Rarely Patented Research Output
• While patenting activity dates back to 1900s, most universities resisted direct
involvement and some discouraged it – considered taboo.
• Rights to inventions from federal funds typically remained in the public domain.
• Cumbersome process required for patenting – univs. had to request waiver.
Source: Mowery and Sampat (2001)
Medical Patenting Was Particularly
Controversial
• Scarlet Fever Case – Widely Criticized Decision to Patent
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Chicago physicians’ 1924 discovery of antitoxin
Numerous companies interested in commercializing
Concern about quality control led to patenting
AMA declined patents
Independent committee established instead
Criticism from medical community re: exercise of control over substance with
public health consequences
– Lancet and BMJ on danger of monopoly – high prices, hindrance of further
research, commercialization of research process
– Affected decisions of many other researchers
The Norm Before 1950
• Most universities lacked patent policies before World War II
• Yale: (adopted 1938)
“. . . it is, in general, undesirable and contrary to the best interests of medicine
and the public to patent any discovery or invention applicable in the fields of
public health or medicine; but if, at any time, any member of the faculty deems it
necessary solely for the protection of the public, without profit to himself or the
University, to control any invention or discovery by means of a patent, he shall
bring the matter before the Prudential Committee”
• Harvard: (no formalized patent policy except following, adopted 1934)
“No patents primarily concerned with therapeutics or public health may be taken
out by any member of the University, except with the consent of the President
and Fellows; nor will such patents be taken out by the University itself except for
dedication to the public”
Source: Palmer (1948)
Post-World War II Trends
Federal Government R&D Support Rises
• Substantial increase in federal funds
for universities
– Univ share of basic research doubled
25% - 50% between 1953-1968
• Third party involvement common into
1960s, primarily via Research Corp.
• Some universities allowed patenting
only if clearly in public interest
• Prohibitions on medical patenting
remained until 1970s
Source: NSF Science and Engineering Indicators, 2002.
Academic R&D in Biomedical
Sciences Surged in 1970s…
• Molecular biology emerged
as field of major advances
in basic science
• Many of these advances had
commercial applications
• Greatest increases in
funding in 60s & 70s were
in biomedical sciences
• Growth of biomedical
sciences played a role in
1970s rise in univ patenting
56 pct. of total academic R&D expenditures went to the life sciences.
Source: NSF Science and Engineering Indicators, 2002.
…as did Patents in Biomedical Sciences
Changes in 1970s
• Universities began direct
management of patent portfolios
• Process of getting patents and
rights to license remained
cumbersome
• IPAs between federal agencies
and universities emerged as a
common way for to patent and
license
• Decline in federal funding led to
more aggressive patenting efforts
• 1974 - Harvard ends stance
against patenting medical
innovations
Source: NSF Science and Engineering Indicators, 2002.
Percent of total academic patents in three largest academic utility classes
1980 – Patent and Trademark Law
Amendments Act (Bayh-Dole)
• Goal to increase technology transfer and utilization of federally-funded research
• What did it do?
– Universities given right to retain the property rights to inventions made
under federal funding
– Exclusive licensing permitted
– No distinction between downstream inventions and fundamental research
discoveries
• Rationale
– Commercialization: Basic nature of university research requires further
development by industry
– Industry won’t take on risk without exclusive licensing rights
– Universities won’t transfer as much without financial incentives
Bayh-Dole Had Special Provisions for
Preserving the Public Domain
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Funding agencies permitted to restrict patenting ex-ante only in
“exceptional circumstances” that contradict goals of Bayh-Dole (such
determinations can be challenged – and provision is cumbersome)
Agencies can exercise “march-in rights” to compel licensing of a
university patent if necessary to alleviate public health or safety needs
NIH has never exercised these rights – significant administrative obstacles
For human genomic DNA sequencing information, NIH issued statement
against patenting – effectively contributing to a “no-patenting” norm
w/out forbiding it
NIH has sought to promote goals through hortatory statements
Reasonable pricing clause for commercialized federal research existed
initially, but was repealed by the Clinton Administration
University Patenting – Phenomenon of
the 1980s and 1990s
• University patenting surged in the 1970s, from less than 250 patents granted in 1975
to over 3,000 patents granted in 2000.
• Publicly funded biomedical research accounts for a major share of patents
Source: Jaffe (2000)
Licensing Activity Has Surged…
Number of Licenses Issued Annually
Source: Bremer, 2001 speech (http://www.autm.net) - data from AUTM Licensing Survey
…as Have Royalties from Licensing
Royalties to Universities/Hospitals in Millions of Dollars
Source: Bremer, 2001 speech (http://www.autm.net) - data from AUTM Licensing Survey
How does all this affect access in
developing countries?
The d4T story
• 1966: compound synthesized under a National
Cancer Institute grant at the Michigan Cancer Center
• 1984: Yale scientists prove that d4T is potent against
HIV in cell cultures
• 1986: Yale files for a patent
• 1988: Yale issues BMS exclusive worldwide license
• 1994: FDA approval
• 1994 - 97: BMS takes out process patents
The Money Trail
• BMS made $443 million on sales of d4T in 2002;
$515 million in 2001, $578 in 2000.
• We don’t know what exactly BMS profits are from
d4T, but according to the BMS 2002 Annual
Report:
“In 2002, our company earned $2,034 million
from continuing operations on global sales of
$18.1 billion, putting us among the most
profitable companies in the Fortune 500.”
The Impact of d4T for Yale
•In 1999, Yale
earned $46.12
million in
royalties.
• About $40
million of this
was from d4T.
• (But almost
none of this
comes from
developing
countries)
MSF’s request; Yale’s response
• Feb 14, 2001: MSF request to Yale:
– Asking Yale if they “would consider the importation of
generic versions of stavudine for use in providing treatment
free of charge to people with HIV/AIDS unable to afford
treatment an infringement of your intellectual property
rights,” and if so, if Yale would “issue a voluntary license to
allow the importation and use of generic stavudine in South
Africa.”
• March 1: Yale replies:
– Yale denies the request, indicating that they have granted an
exclusive license to Bristol-Myers Squibb (BMS), and cannot
legally respond to MSF’s request without BMS’s permission.
MSF’s Reply
• March 9: MSF responds:
– MSF suggests to Yale that their own policy states
that a key objective is “the benefit of society in
general,” and that they should follow their policy
– MSF points out that d4T is not reaching those who
need it in South Africa, and suggests that Yale has
the ultimate power over their patent, and could
breach their contract with BMS if need be.
• March 11: NYT story “Yale Pressed to Help Cut
Drug Costs in Africa”
• March 16: GESO hands over petition and issues
press release
March 14th: Concessions
“EMERGENCY PATENT RELIEF”
• “The Company will ensure that its patents do not prevent
inexpensive HIV/AIDS therapy in Africa. The patent for Zerit,
rights to which are owned by Yale University and BristolMyers Squibb, will be made available at no cost to treat AIDS
in South Africa under an agreement the Company has recently
concluded with Yale.”
• In June, 2001, “agreement not to sue” signed with Aspen
Pharmacare.
PRICING
• BMS will sell its two ARVs at one dollar per day (15 cents per
day for d4T and 85 cents per day for ddI) throughout Africa
• This is later extended to private sector.
What’s happening at other
universities?
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U Minn: Abacavir
Emory: 3TC
Duke: Fuzeon
Cotransformation patent: Columbia Univ.
Hep B vaccine: U of Washington
Cysplatin and Carboplatin: Michigan State
Others???
How can universities ensure that their IP
helps those who need it most?
• What can a university do when it is deciding where and if
to patent an invention?
• What can universities do when negotiating licenses with
industry?
• What can be done if a university invention has already
been patented and licensed to industry?
Promising Trends
• Licensing of compounds to treat Chagas disease in developing
countries to OneWorld Health, a non-profit pharmaceutical
company.