Just five years ago at the UN General Assembly, the world committed to achieving
universal access to treatment for HIV/AIDS by 2010 (United Nations General Assembly,
2005; United Nations General Assembly, 2006). The unprecedented mobilization
of people living with HIV/AIDS (PLWHA), civil society, governments, donors,
and health workers, has resulted in tremendous progress: since 2003, the number
of people with access to antiretroviral therapy (ART) has increased over twelve-fold
to reach five million people by the end of 2009 (2010). A central enabling factor
in this achievement was the availability of low-cost, quality generic antiretroviral
drugs (ARVs), whose prices have dropped by over 99% since 2000 (Médecins Sans
Frontières (MSF), 2010; Perez-Casas, Mace, Berman, & Double, 2001).
Patent barriers
However, we are running far behind in our efforts to achieve universal access,
and huge challenges lie ahead. Nine million people are still waiting for lifesaving
ART, and many patients currently on first-line treatment will need to transition
to second-line drugs that cost three times as much (2010). Newer ARVs are likely
to be patented more widely in developing countries – due to implementation of
the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS) – and are expected to be more expensive. As a result,
developing countries may not have access to affordable generic versions of important
new medicines for many years. The introduction of product patents on medicines
in India, in particular, is restricting the space for competitive generic production
of medicines from the country that currently supplies over 80% of ARVs (by volume)
to the developing world (Waning, Diedrichsen, & Moon, forthcoming) . Patent
barriers can also make it more difficult to develop the fixed-dose combinations
(FDCs) – two or more medicines combined into one pill – that have become a key
tool in facilitating patient adherence to treatment. While needs are great and
costs are increasing, funding has been flatlined and is falling far short. Maintaining
momentum against the epidemic will require that funders live up to their commitments,
and that we find innovative approaches to reducing costs while improving treatment.
For these reasons, UNITAID has supported the creation of the Medicines Patent
Pool Foundation (the Pool) (Bermudez & 't Hoen, 2010). UNITAID is a new
financing mechanism based on a small solidarity tax on airline tickets supported
by 29 countries, the Bill and Melinda Gates Foundation, NGOs, and communities.
UNITAID’s mission is to increase access to treatment for HIV/AIDS, TB and malaria
by making global markets work better for health. UNITAID has raised 1 billion
USD, and seeks to be innovative in the way it both raises and deploys its funds
– as demonstrated by the Pool.
The objective of the Pool is to reduce prices and ensure the availability of
new and improved AIDS medicines. The Pool will initially focus on seeking licenses
for newer products that are expensive in developing countries, such as improved
first-line treatment regimens or the second- and third-line regimens needed
when older products fail. The Pool will also seek licenses for technology that
could be used to develop important products that are currently unavailable,
such as medicines adapted for children. The Pool will complement the other market-based
mechanisms UNITAID uses to stimulate the availability of more appropriate and
affordable medicines, such as reliable financing and bulk purchasing.
Falling prices
What is a patent pool? A patent pool is created when a number of patents held
by different owners are brought together (or pooled) via license agreements.
The pool can then grant licenses to other parties, such as generic drug manufacturers,
in exchange for royalty payments to patent holders. A patent pool can facilitate
third-party access to patented technologies, such as medicines.
Patents can restrict access to medicines, partly by keeping prices high and
partly by hindering the development of certain products. Patents may result
in high prices because patent holders can block other manufacturers from making
generic versions of the medicine. With no competitors to threaten sales, medicines
can be sold at the highest price the market will bear. Patents can also be a
barrier to the development of products such as FDCs – especially when the component
drugs are patented by different companies.
A key objective of the Pool is to facilitate robust competition in the production
of ARVs. Generic competition has proven to be the most effective way to bring
down the price of medicines. After generic versions of medicines become available,
prices fall on average between 65 and 80 percent, and sometimes much more, depending
on the number of manufacturers entering the market (Congressional Budget Office
(CBO), 1998). For example, as a result of robust generic competition, the price
for one year of AIDS medicines fell from more than US$10,000 per patient to
as low as $80 today.
Voluntary licenses for key HIV/AIDS medicines patents
Generic versions of a medicine can be made if, for example, a patent has expired
or has been revoked, or if a medicine has not been patented in a given country.
In addition, companies can obtain licenses to make generic versions of medicines.
Patent licenses can be compulsory (issued by a government agency or court) or
voluntary (obtained through an agreement with the patent holder) and usually
involve the payment of royalties.
The Medicines Patent Pool will obtain voluntary licenses for key HIV/AIDS medicines
patents, and then make these licenses available to qualified third parties on
a non-exclusive and non-discriminatory basis. To qualify, drug manufacturers
will have to meet eligibility criteria such as quality, safety and efficacy
requirements. The licenses will be for use in developing countries, and royalties
will be paid to patent holders.
The Pool is one possible way to overcome patent barriers to enable the production
of affordable versions of new and improved AIDS medicines. By easing access
to patent licenses, the Pool will encourage generic competition and bring medicine
prices down. It will also facilitate the development of improved products, such
as combination pills containing two or more drugs – an innovation that simplifies
AIDS treatment and reduces the risk of resistance.
The Pool will benefit all parties involved. More patients in developing countries
will gain faster access to better, more affordable medicines. Developing country
governments and international donors will be able to provide better treatments
to more people for less money. Medicine patent holders will be compensated for
the use of their technology. And generic manufacturers will more easily be able
to obtain patent licenses allowing them to sell new or improved medicines.
The willingness of patent holders to license their patents to the Pool, and
of generic manufacturers to make use of those licenses, is central to the success
of the initiative. To date, several key patent holders and generic manufacturers
have expressed interest in participating in the Pool. Success will also depend
upon continued widespread support among other stakeholders and the public, and
the willingness of donors to make sufficient resources available for AIDS treatment
on a sustained basis.
*Ellen 't Hoen, LL.M., Senior Adviser IP & Medicines Patent Pool, UNITAID
Suerie Moon, Center for International Development, Kennedy School of Government
For more information please see http://www.unitaid.eu/en/Patent-pool-resources.html
References
- Bermudez, J., & 't Hoen, E. (2010). The UNITAID Patent Pool Initiative:
Bringing Patents Together for the Common Good. The Open AIDS Journal, 4, 37-40.
doi:10.2174/1874613601004020037
- Congressional Budget Office (CBO). (1998). How Increased Competition from
Generic Drugs has Affected Prices and Returns in the Pharmaceutical Industry.
Washington D.C.: Retrieved from http://www.cbo.gov/ftpdocs/6xx/doc655/pharm.pdf
- Joint United Nations Programme on HIV/AIDS (UNAIDS). (2010). UNAIDS Outlook
Report 2010. Geneva: UNAIDS. Retrieved from http://data.unaids.org/pub/Outlook/2010/20100713_outlook_report_web_en.pdf
- Médecins Sans Frontières (MSF). (2010). Untangling the Web of Antiretroviral
Price Reductions (Online Edition). Retrieved 08/24, 2010, from http://utw.msfaccess.org/
- Perez-Casas, C., Mace, C., Berman, D., & Double, J. (2001). Untangling
the Web of Antiretroviral Price Reductions (1st Edition) No. 1st edition).
Geneva: Medecins Sans Frontieres/Campaign for Access to Essential Medicines.
http://www.msfaccess.org/fileadmin/user_upload/diseases/hiv-aids/Untangling_the_Web/UTW%201%20Sep%202001.pdf
- 2005 World Summit Outcome, A/60/L.1, (2005). Retrieved from http://www.who.int/hiv/universalaccess2010/worldsummit.pdf
- 60/262 Political Declaration on HIV/AIDS, A/RES/60/262, 60th Session, 87th
plenary meetingCong. (2006). Retrieved from http://data.unaids.org/pub/Report/2006/20060615_HLM_PoliticalDeclaration_ARES60262_en.pdf
- Waning, B., Diedrichsen, E., & Moon, S. (forthcoming). A Lifeline to
Treatment: The Role of Indian Generic Manufacturers in Supplying Antiretroviral
Medicines to Developing Countries. Journal of the International AIDS Society
