Generic Competition

• Universities Allied for Essential Medicines• November 28, 2006• Adopted from UPenn Nat’l Conference Presentation

Defining the problem

• Adequate drugs and diagnostics simply do not exist for many neglected diseases

• Even where drugs and diagnostics do exist, prices in developing countries are often out of reach when the market is not competitive

• Even where prices are affordable, other barriers to delivery exist (human resources, infrastructure, management capacity)

January 2006

ARV Price Comparison: 3TC+d4T(40)+NVP

Branded BestPrice

$562

Generic ListPrice

$290

$562

$192

October 2003

Branded BestPrice

Generic ListPrice

Effect of generic competition on market prices

Other problems associated with originator market exclusivity

• Untimely product launch– Heat-stable LPV/r

– Tenofovir

• Unreliability of supply in single-source situations

• Barriers to innovation

Pricing is not the sole concern with respect to patent-

protected market exclusivity: do not equate ‘access’ with

‘low prices’

Features of generic competition

Generic competition produces superior outcomes

Economics(cost advantages,

competition)

Innovation (eg, FDCs, pediatric

formulations) + + Quality

EAL (Equitable Access Licensing)

Equitable Access License (EAL) overview

• Basic idea: Means of maintaining open door for robust generic competition

• Deals with three basic hurdles: patent, regulatory/data, and production capacity

• Major benefits include simplicity and ease of administration, maximum flexibility for generic producers, and wide coverage

• Leaves relatively little discretion to university or licensee: self-executing rights, covers all LMIs, no eligibility (eg, quality) restrictions on suppliers, etc.

EAL schematic: Cross-license and grant-back

EAL schematic: Notification

EAL schematic: Notifier improvements

4.Royalties flow to university and

licensee