Apple Pie, Motherhood and Global Health Ashley J. Stevens Office of Technology Development Boston University MATTO Professional Development Seminar July 25, 2007 1 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 2 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 4 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 5 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% 6 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? 7 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 8 Developing Countries and the Pharmaceutical Industry Then along came AIDS A new disease with new – i.e., patent protected – treatments 9 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 10 © 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) 11 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 12 © 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 13 © 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 14 © 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 15 © 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 16 © 2005 Ashley J. Stevens. All Rights Reserved. Do not copy or modify A Recent Example 17 © 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 18 Zemplar Invented by Hector de Luca, University of Wisconsin Licensed by WARF to Abbott UAEM’s second new target 19 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 21 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 23 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 24 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 27 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 29 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 32 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 35 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 37 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 39 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” 41 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 43 © 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 44 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 45 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 47 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) 48 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 49 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 50 Proposal MATTO should take the lead and make model language available. 51 Do something! Further Reading “Intellectual property Management in in Health and Agricultural Innovation” (aka the MIHR Handbook) ed. Anatole Kratinger et al (inc. Lita) 53 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) 54 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 55