1 Apple Pie, Motherhood and Global Health Ashley J. Stevens Office of Technology Development Boston University MATTO Professional Development Seminar July

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Apple Pie, Motherhood and

Global Health

Ashley J. StevensOffice 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

The Pharmaceutical Industry from 35,000 Feet

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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 co-exclusivity 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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© 2005 Ashley J. Stevens. All Rights Reserved. Do not copy or modify

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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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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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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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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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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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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A Recent Example

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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

Where Are We Today?

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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

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.

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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

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

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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

Let’s think about how we get a university drug discovery to the global market

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University’s Objectives

1. Get the technology developed

2. Get the technology to the developing world at affordable prices

Let’s Look at Some Licensing Approaches

License for Developed Countries – Require Developing Country Development

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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

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

DevCoPharma 1DevCo

Pharma 1

DevCoPharma 2DevCo

Pharma 2

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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

Separate Licensee(s)

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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

Drug for Developing Country Markets Only

DevCoPharma 1DevCo

Pharma 1

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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

Require Mandatory Sublicensing

BigPharma

BigPharma

DevCoPharma 1DevCo

Pharma 1

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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”

Grantback

5%

2.5% BigPharma

BigPharma

DevCoPharma 1DevCo

Pharma 1

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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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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

BU’s Model: Non-Suit

BigPharma

BigPharma

DevCoPharma 1DevCo

Pharma 1

DevCoPharma 2DevCo

Pharma 2

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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.

Do something!

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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 TrustSeptember 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

Documents

1 Apple Pie, Motherhood and Global Health Ashley J. Stevens Office of Technology Development Boston University MATTO Professional Development Seminar July