Licensing, Generic Competition Needed To Drive Down HIV Drug Prices, Speakers Say

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The accessibility and affordability of drugs in developing countries depend on robust generic competition and would benefit from greater transparency in the terms and conditions of licensing agreements, the acting head of the Medicines Patent Pool said on a panel at the World Intellectual Property Organization that included a speaker from the Indian generics industry and a representative of Gilead Sciences.

The 27 June panel was the second seminar of the WIPO Global Challenges division, which is working at the intersection of intellectual property and issues such as climate change, development, public health and traditional knowledge. The seminar looked at different perspectives on new pharmaceutical sector approaches on licensing and pricing. It was meant to bring different stakeholders together to share their experience on licensing and pricing in the pharmaceutical sector, and provide a forum for debate.

Gregg Alton, executive vice president for corporate and medical affairs at Gilead Sciences, said that around seven million patients are now receiving HIV treatment worldwide. The cost of medicine in low income countries has been an issue that Gilead has been trying to solve with the launch of its access programme in 2003.

Under this programme, Gilead has established a tiered pricing system, and has voluntarily extended licences to 14 Indian manufacturers and one South African company to produce two generic HIV drugs for low and middle-income countries, according to Alton’s presentation [pdf].

Some 30,000 patients were treated in 2006 in the poorest markets, such as sub-Saharan Africa or South East Asia, and now number over 2.5 million, he said. Gilead later entered an agreement with the Medicines Patent Pool.

“We are not saying that it is perfect,” Alton said, as the goal of making medicines as available in the developing world as they are in the developed world is still to be achieved.” But he said Gilead will “continue to tweak” the model and continue to make changes, to adapt in order to increase the number of patients receiving more HIV products.

Down the road, he added, “We would like to see this type of approach of high volume and low margins” applied to other medicines and make them broadly available.

But Chan Park, interim executive director of the Medicines Patent Pool, said that despite enormous progress over the last decade in the developing world, many more people continue to need treatment. There are an estimated 8 million people still in urgent need of HIV treatment in developing countries, he said.

The best way to dramatically lower the cost of antiviral medicine is through robust generic competition, he said, and “we know that when multiple generic companies are able to enter the market and compete” there is a drastic effect on prices. He cited a triple combination therapy which cost in 2010 amounted to US$10,000 per person per year and now can be bought for US$70 per person per year.

Shailesh Pednekar, general manager for ARV business and global therapy management at Ranbaxy Laboratories, an Indian generic manufacturer, said that 80 per cent of HIV products are manufactured in India from very few licensing partners.

Newer Drugs Still Patented; IP Hurdles

The problem, said Park, is that that particular triple combination is now outdated. Today, the standard of care has improved, he said. There are more efficient and less toxic new drugs, and a lot of people need to be moved to 2nd or 3rd line medication. However, over the past 10 years, the global intellectual property landscape has changed dramatically, in particular with the change in the Indian patent regime in 2005 as a result of the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Broader implementation of TRIPS obligations in the developing world has also changed the IP landscape, he said.

As shown in the Medicines Patent Pool’s database, pre-TRIPS compounds are more sparsely covered and patented in the developing world, but the newer drugs developed during the post-TRIPS period are far more widely patented throughout the developing world, he said. On those newer drugs, patent expiry will not be reached until 2025 or 2030, and “unless some corrective actions are taken, the generic competition to lower the price of these drugs will not be possible,” Park said.

One of the aims of the Medicines Patent Pool is to push for good voluntary licences practices, Park said. In particular, he called for more transparency on terms and conditions of voluntary licences. The Pool aims to publish the full text of the voluntary licences that are negotiated, he said. Voluntary licences negotiated through the Medicines Patent Pool are “measurably better” than bilateral deals that are negotiated between originator companies and generic manufacturers, he added.

For instance, he said, the first licence agreement with Gilead had a geographical scope of 112 countries, which is “far more than the bilateral licensing programmes in effect with most of the originator companies.”

The Medicines Patent Pool is currently in negotiations with five other companies and hopes to announce further licences in the coming months. According to the Medicines Patent Pool website, it is currently negotiating with Boehringer-Ingelheim, Bristol-Myers Squibb, F. Hoffman-La Roche, Sequoia Pharmaceuticals, and ViiV Healthcare.

Civil Society Criticism of MPP-Gilead Licence

The agreement between the Medicines Patent Pool and Gilead was criticised by civil society on a number of points (IPW, Public Health, 12 July 2012).

Park said that the Pool expected and received criticism. In particular, the geographical scope was criticised as it left out key middle-income countries. The aim at the beginning of every negotiation is to include all low and middle-income countries, but this represents a contentious issue “in all of our negotiations,” he said. Considering country size, he said companies are very reluctant to let go of markets like Brazil and China.

Another criticism was based on the fact that all licensees have to be based in India and this represents a frustration especially for people who are trying to promote local production and technology transfer, he said.

Alton said that Gilead considered the manufacturing capacity of India versus local manufacturers. The goal is to take the cost down and have broader availability, he said, and “we can accomplish that in India.”

On the geographical constraints limiting delivery to drugs under the agreement , Alton said that countries like China or Brazil need lower cost, but those countries “do not need the lowest cost possible,” he said, adding that there is an ability of China and Brazil “to pay something in terms of a profit.”

The video of the seminar is available here on the WIPO website.

Catherine Saez may be reached at info@ip-watch.ch.

Attribution-Noncommercial-No Derivative Works 3.0 Unported

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