Experts Discuss Essential Drugs Patent Pool Proposal

Consumer representatives, United Nations diplomats, drug industry representatives and others this week discussed a proposal to form a patent pool for essential medicines.

The proposal was put forward by Consumers International and the Consumer Project on Technology (CP Tech) at the annual U.N. World Health Assembly, and on Tuesday filled a room with people holding a variety of views on how to address global needs for access to medicines, an issue accentuated by the rise of HIV/AIDS.

A patent pool is “an agreement between two or more patent owners to license one or more of their patents to one another or third parties,” according to a release from the discussion.

The objective of a proposal for an “Essential Patent Pool for AIDS” is to “enable a sustainable scale up of the global AIDS campaign and expansion of access and creation of needed technologies to combat the AIDS pandemic,” according to a fact sheet by Washington-based Essential Inventions. The goal would be to provide anti-retroviral medicines, medical devices and quality testing systems to countries and organisations.

It would provide open licensing of patents in the pool to all suppliers of anti-retroviral medicines and technology, thereby lowering registration barriers and expanding generic drug markets, the group said. The patent pool as proposed would be established with regional or global sponsors and would be managed by a board of directors. The initial list of patents in the pool would be developed by the patent pool, and the voluntary contribution of patents by patent holders would be sought for manufacture, import and export. If industry did not accept it voluntarily, then a compulsory license could be used, according to Michelle Childs of CP Tech.

One advantage to the pooled approach from a developing nation standpoint is that it would allow governments to join together on a compulsory license instead of one government facing the pressure that can accompany such a decision, she noted. It could also help generic producers innovate as some have feared litigation if they started producing in some countries and typically operate on small margins.

Under the proposal, royalties for high-income countries would be determined through a formula reflecting “equitable” terms such as the relative therapeutic benefits of products and the affordability of royalties in countries depending on average incomes and the presence of HIV/AIDS.

Childs presented the proposal in the context of 150 years of patent pools, where they have been successfully deployed in technology industries such as sewing machines, motion pictures, radio, “MPEG” computer files, and DVDs. A typical licensing requirement in these patent pools is a “grantback” licensing requirement under which licensees grant back new patent rights to the pool participants. This has benefited patent holders and consumers, she said.

In particular, Childs cited the example of the aircraft patent pool created by the United States government in 1917 as the country was preparing to enter World War I. A study commissioned by then-Navy Secretary Franklin Delano Roosevelt found that the U.S. aircraft industry’s development was “seriously retarded” by the situation of patent ownership stemming from the Wright Brothers’ creation of a successful airplane design.

The cost of airplanes had been artificially inflated by the small number of patents controlled by a few companies, and innovation was stifled, Childs said. With the creation of the patent pool, access to patent technology was licensed on a fair basis of remuneration to many companies, cost, supply and innovation problems were solved, she said.

Another example is a new patent pool being developed for a SARS vaccine by the WHO SARS Consultation Group and the key SARS intellectual property owners, she said. Childs also listed ways to avoid antitrust problems.

Several WHO representatives in the room expressed interest in the proposal. Dr. Jim Yong Kim, director of the WHO HIV/AIDS Department, said he was not sufficiently expert on intellectual property issues to say whether he advocated the proposal or not, but said that universal access is the next big push on HIV/AIDS and that the global health system is in question. He said the program would probably have to present to donors evidence of what can and cannot be done depending on the price of needed drugs. He also said the WHO would continue to advocate for more resources and progress against HIV/AIDS no matter where the issue stands by the end of 2005, and that a new target date of 2008 for reducing global infections would likely be set.

A representative from the director-general’s office asked questions such as what the big pharmaceutical industry’s interest would be and how the WHO can support it. Ellen ‘t Hoen of Médecins Sans Frontières (MSF) suggested WHO could take a role in helping to answer these questions.

In the discussion, Jon Pender, director of government affairs for access issues and intellectual property at GlaxoSmithKline, showed a willingness to discuss the issue further, but said at first reaction that it might lead to research-based industry “washing its hands” (pulling out of) countries that joined the patent pool. An additional concern was that it might mean a reduction of investment in those pharmaceuticals, he said.

Earlier in the day, MSF criticized the leadership of the WHO for a “lack of commitment” to improve access to affordable versions of needed drugs.

In particular, MSF called on the WHO to expand its “prequalification” project, under which products are assessed for safety and quality, and manufacturers’ practices are judged. The project, established in 2001, has dramatically improved access to quality essential medicines, particularly AIDS drugs, in developing countries, MSF said.

“MSF’s diagnosis is that the WHO prequalification project today suffers from the same lack of support from WHO leadership that it did a year ago,” the group said in a press release. “If the WHO director-general does not increase the capacity of this vital programme, the project risks becoming a barrier to, rather than a tool for, expanding access to medicines,” said MSF International Council President Rowan Gillies.