Today the Medicines Patent Pool (MPP) and Gilead announced an agreement to license patents
for the FDA approved antiretroviral drugs tenofovir (TDF) and emtricitabine, as
well as elvitegravir, cobicistat and a four drug combination of
elvitegravir/FTC/TDF/cobicistat -- potentially important products in Gilead`s
research and development pipeline for HIV/AIDS treatments.
It will take
some time to review the text of the agreements, which were just released. These
initial comments are based primarily upon oral briefings.
KEI welcomes
the new agreement, which is the first between the MPP and an important private
sector patent holder, subject to the reservations and comments presented below.
With today`s announcement, the pool has widened the door for generic
competition and lower prices for AIDS drugs in developing countries. Gilead is
the first, and should not be the last, to recognize the importance of embracing
the pool to formally share its technology to address this public health crisis.
The licenses are not perfect, and there will be justifiable criticism of the
geographic scope and several of the terms in the agreement. That said, the
agreement seems to be an important step forward.
The MPP/Gilead
agreement covers multiple products, each with a different geographic scope. The
most expansive license covers 111 countries. According to some reports, in
addition to AIDS, the licenses permit the sale of products to treat hepatitis
B.
From the
Medicines Patent Pool web page:
Per the
Medicines Patent Pool transparency policy, the full text of the licences is
posted below.
The licences
are in three documents. The first is the primary licensing agreement signed by
the Pool and Gilead. This agreement dictates that the Pool use the following
two forms in its sub-licensing to generic companies. The first sub-licence
document is a form "amended and restated" sub-licence agreement for
existing Gilead sublicensees. The second is a form sub-licence agreement for
new sublicensees.
The main
licensing agreement between the Medicines Patent Pool and Gilead is available here .
The license
follows in many respects the approach taken in an earlier voluntary license for
TDF and emtricitabine, which was the subject to an
antitrust complaint by KEI to the Federal Trade Commission (FTC).
The new agreement between Gilead and the MPP contains some of the shortcomings
of the earlier license, but not all of them. Most important, while the new
licensing agreement excludes many countries in Asia and Latin America, it does
not prevent licensees from serving these markets through production from
countries outside of India, or from India when countries outside of the
voluntary license issue a compulsory license. The licenses explicitly state
that exports of medicines from India to other countries under compulsory
licenses do not constitute a breach of the license.
For further clarity, and nothwithstanding
anything to the contrary in this Agreement, it shall not be deemed to be a
breach of the Agreement for Licensee to supply an API or Product outside the
Territory into a country where (i) the government of such country has issued a
compulsory license relating to such API or Product allowing for the importation
of such API or Product into such country, provided that Gilead and Licensee are
in agreement (with such agreement not to be unreasonably withheld) regarding
the existence, scope and content of such compulsory license, and/or (ii) the
Government of India has issued a compulsory license allowing for the export of
an API or Product from India and into such country, provided that (Y) there are
no Patents containing a valid claim covering the use, import, offer for sale or
sale of such API or such Product in such country or a compulsory license has
also been issued by the relevant authorities of such country and (Z) Licensee
and Gilead are in agreement (with such agreement not to be unreasonably withheld)
regarding the existence, scope and content of such compulsory license.
This provision
will work in combination with Section 92A of the India Patents Act. (See
appendix below)
The new
agreement, like the older license, would require the payment of royalties in
countries where no patent exists. However, unlike the older agreement, it is
possible to license some products and not others. CIPLA, for example, could use
the licenses for the pipeline products, but continue to operate outside of the
license for the TDF market, a product that is thinly patented within the
geographic area covered by the license.
The new
agreement is not a model agreement. For example, according to briefings, it
requires active ingredient production be sourced from India (or a Gilead
supplier), requires payment of royalties in countries without patents, and has
limited developing country geographic coverage. That said, the terms of the
license are an improvement over the previous agreement, more countries are
covered, and the new pipeline products are considered quite promising. The
license is also the first between the Medicines Patent Pool and a private
sector patent holder and will allow civil society, donors, and developing
country governments to put considerable pressure on other patent holders.
We are pleased
that the licenses and key correspondence between the parties are public and
will be available from the MPP web page. This sets a welcome precedent for
transparency in the management of intellectual property policy.
Under Ellen `t
Hoen`s leadership, and with the support, patience and leadership of the UNITAID
board and staff (including the President, Philippe Douste-Blazy, and the
Executive Secretary, Jorge Bermudez), the pool has rapidly positioned itself as
a dynamic and ambitious international actor, focused on the public health
aspects of controversial and complex intellectual property issues. Today`s
announcement demonstrates the benefits of the collective licensing approach,
and sets the stage for the next round of negotiations with other companies
controlling key HIV treatment patents.
Civil society
has long played a key role in the promotion and operation of the pool. These
groups include the many who participate in the UNITAID civil society forums, as
well as others, including NGOs in India, Brazil, Thailand and elsewhere that
have long pressed the pool to protect consumer interests.
KEI and MSF
played an early role in asking UNITAID to invest in the pool. Oxfam, Paris Act
Up, Coalition PLUS, the UK Stop AIDS campaign, the Cameroon Coalition Against
Malaria, the National Empowerment Network for People Living with HIV/AIDS in
Kenya, and the African Services Committee have effectively monitored the
UNITAID board meetings.
The Obama White
House and the NIH decision to license patents it owned to the pool, and the
support of DFID, and more recently a string of high profile endorsements from the G8, the WHO and the UN`s high level forum on AIDS have demonstrated
broad political support for the pool - achievements that required considerable
diplomatic and policy skills, and which will be quite important to the pool as
it pursues voluntary licenses.
As noted above,
the terms of the Gilead/MPP agreement are disappointing in several areas. This
is largely a reflection of the relative bargaining power of the parties at this
stage in the negotiations. It is an important step forward, but there is much
more to do.
As the MPP
moves forward, it will face many challenges in obtaining new licenses, expanded
geographic coverage, and better terms. For the MPP to succeed in this next
stage, it will be important to build upon the current levels of political
support, and also to explore new incentives to induce licenses, such as the
Donor Prize Fund proposal, and to increase engagement by developing country
governments to persuade companies to license to the pool, and to expand
geographic coverage. This includes by granting compulsory licenses on patents
for products not licensed to the pool, for their countries. The United States
government can also use its rights to other federally funded patents, including
patents on ritonavir, lopinavir and other AIDS drugs invented with funding from
the federal government, as leverage to get patents into the pool.
Without
disparaging the many effective and determined civil society advocacy efforts
that are associated with the pool, including our own, it is nevertheless true
that it is difficult to maintain civil society and the general public attention
on intellectual property issue for sustained periods of time. Thus, the
existence of the MPP with a professional staff is helpful.
Finally,
despite our reservations about some aspects of the Gilead license agreement, we
note that Gilead and senior leadership deserves considerable credit for being
the first company to license to the MPP, particularly given pressure from some
quarters to avoid legitimization of the pool.
KEI believes it
is very important that the pool succeed, and to broaden the geographic and
product coverage and improve the terms of the licenses. The stakes are very
high -- and involve the lives of millions of persons living with HIV in
developing countries.
Appendix
Section 92A of
the Patents Act is a mandatory compulsory license "to any country having
insufficient or no manufacturing capacity in the pharmaceutical sector for the
concerned product to address public health problems." It reads as follows:
(1) Compulsory
licence shall be available for manufacture and export of patented
pharmaceutical products to any country having insufficient or no manufacturing
capacity in the pharmaceutical sector for the concerned product to address
public health problems, provided compulsory licence has been granted by such
country or such country has, by notification or otherwise, allowed importation
of the patented pharmaceutical products from India.
(2) The Controller
shall, on receipt of an application in the prescribed manner, grant a
compulsory licence solely for manufacture and export of the concerned
pharmaceutical product to such country under such terms and conditions as may
be specified and published by him.
(3) The
provisions of sub-sections (1) and (2) shall be without prejudice to the extent
to which pharmaceutical products produced under a compulsory licence can be
exported under any other provision of this Act. Explanation.- For the purposes
of this section, “pharmaceutical products” means any patented product, or
product manufactured through a patented process, of the pharmaceutical sector
needed to address public health problems and shall be inclusive of ingredients
necessary for their manufacture and diagnostic kits required for their use.
This means that
when an importing countries simply writes a letter authorizing the import of a
patented drug, stating that they have insufficient manufacturing capacity and
need to import the product from India to address a public health problem, the
India Patent Controller MUST grant a compulsory license for export.
