[Ip-health] Pharmacia's volentary license for countries with incomes less than $1,200 or with HIV infection rates more than 1 percent

[James Love]

This volentary Pharmacia license is being announced at Davos.  The
qualifying countries are those with incomes less than $1,200 per year,
(a level that would exlude all middle income countries), *or* that have
infection rates more than 1 percent (which puts in countries with
significant HIV infection rates).  It would appear as though Thailand
and Dominican Republic would qualify based upon infection rates > 1
percent, but Brazil and Malyasia would not, for example.  It appears as
though IDA will be the only reciepient of the license, and it looks as
though will there may be a single generic alternative, such as the still
un-utilized Aspen volentary license in RSA.   Amir Attaran, Michael
Friedman from Pharmacia, and Henk den Besten from IDA have an article in
Lancet on this topic as well.  It isn't clear what the net effect of
such deals will be, if they end up cutting off some of the important
generics markets, such as Brazil, which were instrumental in creating a
market for cheap pre-1996 ARVs, or countries like Malyasia, which are
thinking about providing Brazil type treatment of their relatively
managable but inelgible populations.    Jamie


http://www.pharmacia.com/newsroom/script_press.asp?id=376

Pharmacia to Launch Pilot Program For Expanding Access to Needed
Medicines in World's Poorest Countries

Davos, Switzerland (January 24, 2003)  In conjunction with a panel
discussion sponsored by the World Economic Forum's Global Health
Initiative, Pharmacia Corporation announced the launch of a pilot
program as a model for expanding access to needed medicines for the
poorest populations in the developing world. Under the program,
Pharmacia, in partnership with the International Dispensary Association
Foundation (IDA), will grant non-exclusive licenses for delavirdine, a
medicine for HIV/AIDS, to generic pharmaceutical companies that agree to
manufacture and supply the product to the world's poorest countries.

Delavirdine, marketed in the U.S. as Rescriptor (delavirdine mesylate
tablets), is an oral, non-nucleoside reverse transcritpase inhibitor
(NNRTI), developed by Pharmacia for use in patients with HIV infection.
Delavirdine was approved and launched in the United States in 1997 and
is among the antiretroviral therapies recommended by the U.S. Department
of Health and Human Services for treatment of HIV/AIDS.

Under the not-for-profit pilot program, Pharmacia will transfer its
proprietary manufacturing technology and regulatory dossier for
delavirdine to IDA. IDA, in turn, will be empowered to select any
generic companies that meet its quality manufacturing standards. As the
world's largest non-profit supplier of generic medicines to developing
countries and relief agencies, IDA is uniquely positioned to facilitate
manufacturing and supply of generic delavirdine in eligible countries.

The pilot program has the potential to benefit HIV/AIDS patients in 78
developing countries including all of the countries in sub-Saharan
Africa. The combined population of these countries is approximately 3.8
billion people. Under the program, countries with a per capita Gross
National Income of less than $1,200 or an HIV infection rate of more
than 1 percent are eligible to receive generic delavirdine.

"This is an innovative approach to the complex access issue that we
believe deserves to be tested in real world conditions," said Fred
Hassan, Chairman and Chief Executive Officer of Pharmacia Corporation.
"In particular, it brings together the broad array of stakeholders
needed to effectively address access needs for the most needy
populations in the world, within a framework that sustains the
intellectual property protections that are essential to foster continued
investment in the research that will generate new medical breakthroughs."

The pilot program to be launched is based on an approach proposed by
representatives of Pharmacia, IDA and Harvard University's Kennedy
School of Government in the current issue of the journal The Lancet. The
authors of the paper, Michael Friedman, MD (Pharmacia), Henk den Besten
MBA (IDA), and Amir Attaran, DPhil. (Harvard), propose that
pharmaceutical patent holders consider awarding voluntary licenses to
generic manufacturers who agree to manufacture and supply high-quality,
effective medicines to the world's poor and developing countries. The
article stresses that the one of the greatest benefits of out-licensing
programs will come from providing medicines that treat the leading
causes of infectious mortality and morbidity in developing countries, in
particular treatments for HIV/AIDS.

The World Economic Forum's Global Health Initiative works to increase
the quality and quantity of business engagement against HIV/AIDS,
tuberculosis and malaria. The Global Health Initiative also serves as
the focal point for business engagement to the Global Fund. In these
roles, the Global Health Initiative upholds the World Economic Forum's
commitment to bring together key actors to address the world's most
pressing issues.

Pharmacia Corporation (NYSE:PHA) is a top-tier global pharmaceutical
company whose innovative medicines and other products save lives and
enhance health and wellness. Pharmacia's 43,000 people work together
with many diverse stakeholders to bring these benefits to people around
the world, and to create new health solutions for the future. On July
15, 2002, Pharmacia and Pfizer Inc. (NYSE: PFE) announced the signing of
a definitive agreement providing for Pfizer to acquire Pharmacia in a
stock-for-stock transaction that is expected to close in the first
quarter of 2003.

Media Contact:
Elinore White, APR
Ruder Finn, Inc.
Office: 212-593-6344
Mobile: 914-645-4235

-------------------------------

Pharmacia Nears Deal to Sell Cheaper Version of AIDS Drug

By SCOTT HENSLEY
Staff Reporter of THE WALL STREET JOURNAL

Attempting to break a stalemate over getting AIDS drugs into developing
nations, Pharmacia Corp. is near a deal to allow generic drug makers to
sell cheaper versions of its drug Rescriptor in poor countries only.

Pharmacia , one of the world's largest drug companies, would license
Rescriptor to the nonprofit International Dispensary Association of the
Netherlands. In turn, the association, would line up generics
manufacturers to produce the medicine for use in as many as 78 poor
countries.

In a novel tactic, the Pharmacia agreement with IDA would stipulate that
the medicine, known generically as delavirdine, be a different shape and
color from the original pill. This distinction would make it easier for
customs officials and other authorities to crack down on illegal
shipments back to the U.S. and other developed countries.

The pact is an effort to make essential medicines available at reduced
prices in the developing world while protecting the economic interests
of brand-name drug makers in their profitable home markets. The
program's developers see this as a model that could be applied to a
broad range of essential medicines and hope that other drug makers will
follow Pharmacia's lead.

"The key is to make some things happen," said Fred Hassan, chairman and
chief executive of Pharmacia , based in Peapack, N.J. "It may not be the
perfect solution, but we're trying to do something instead of debate."

The architects of the agreement describe the new model -- but not the
role that Pharmacia will play, which is expected to be unveiled at the
World Economic Forum in Davos, Switzerland -- in a paper being published
Saturday in the British medical journal Lancet.

Until now, branded drug makers have generally resisted calls to license
their patents to poor countries or to generics makers, either
voluntarily or by compulsion. They fear setting a precedent that would
erode profits if cheap medicines from the developing world are diverted
to key industrial markets.

Merck & Co., Bristol-Myers Squibb Co. and GlaxoSmithKline PLC, among
others, have offered discounted or free medicines to developing nations,
but the programs haven't met the needs of tens of millions of patients
dying from HIV/AIDS and some other diseases.

Under the Pharmacia approach, drug patent holders would award
nonexclusive licenses to generics makers for sale of cheap, faithful
copies of key drugs only in the poor countries where they are urgently
needed. Generics makers would pay a royalty to the patent holder, 5% in
the Pharmacia case, and would be encouraged to compete on price.
Generics makers would be prohibited from selling against the patent
holder in developed markets, however, thus preserving profit incentives
for the branded drug industry.

Rescriptor prevents HIV from entering the nucleus of white blood cells
and is used in combination with other AIDS drugs. It currently costs
more than $300 a month in the U.S.; the generic version is expected to
cost considerably less.

Pharmacia has little to lose by serving as a guinea pig in the
experiment. Several years ago the company made a strategic decision to
emphasize drugs to treat illnesses other than HIV/AIDS and hasn't
promoted Rescriptor actively or pursued research of related medicines.
In 1999, in the U.S. and some other markets, Pharmacia licensed
Rescriptor to Agouron Pharmaceuticals, now a division of Pfizer Inc.
Sales of Rescriptor in the developing countries where Pharmacia kept its
rights are so low the company hasn't been required to disclose them and
they aren't immediately available, a spokeswoman said.

Details of the contract between Pharmacia and the Dutch nonprofit are
still being hammered out, but the parties said they expect to reach an
accord within weeks. Henk den Besten, managing director of the group,
said several generics makers already have expressed interest in
participating, but he couldn't predict how long it would take for the
first medicine to reach patients. The group has a 30-year record of
having generic medicines produced and then getting them into the hands
of doctors and patients in developing countries.

A potential advantage of the new plan would be faster, better production
of generic drugs, which has been a stumbling block in developing
nations. Under the friendly technology transfer, generics companies
would receive know-how beyond the patent, such as manufacturing
expertise and data that would be useful in registering the products with
national regulatory authorities. The voluntary approach would also
eliminate delays from legal fights.

If Pharmacia's compromise spurs imitation, it could mute some protests
by activists who say rich companies haven't adequately responded to the
growing public-health disaster.

Pfizer, in a written statement, said it welcomes the path described in
the Lancet paper for licensing patented drugs to generics makers and
supports Pharmacia's plans for Rescriptor. Pfizer's support is crucial
since the New York-based drug maker is expected to close its $55 billion
deal to acquire Pharmacia later this quarter.

A spokesman said London-based GlaxoSmithKline "doesn't count out
generics companies" and is prepared to let them make its products
subject to certain conditions. He couldn't comment on the specifics of
the Lancet paper or Pharmacia approach because he hadn't seen them.
GlaxoSmithKline makes several HIV drugs, and has offered them at cost to
countries in need. The drug maker also has given a license for some HIV
drugs to Aspen Pharmacare, a South African generics maker.

Amir Attaran, a Harvard University lecturer, matchmaker for the
Pharmacia deal and co-author of the Lancet paper, believes that defusing
the arguments over patents could shift attention to the bigger problem:
the shortage of funding for the humanitarian efforts and health-care
development needed to save the ill. "An enormous debate has raged over
patents and access," he said, "however, it has crowded out the debate
over things such as financing." With a new approach to licensing, he
hopes, the world can now discuss "the elephant in the living room: that
nobody is prepared to pay for the medicines and therefore people will
die by the millions" unless action is taken.

-- Mark Schoofs contributed to this article.

Write to Scott Hensley at scott.hensley@wsj.com

Updated January 24, 2003 1:00 a.m. EST
--
James Love, Director, Consumer Project on Technlogy
http://www.cptech.org, mailto:james.love@cptech.org
tel. +1.202.387.8030, mobile +1.202.361.3040