[Ip-health] Roche's Illusory Offer of Voluntary Licenses for Bird Flu Medicines

[B.Baker@neu.edu]

Roche's Illusory Offer of Voluntary Licenses for Bird Flu Medicines

Brook K. Baker
Health GAP
October 18, 2005

Rocked by a barrage of threats from several countries to issue compulsory
licenses to increase affordable access to expanded quantities of Tamiflu,
Roche has issued a press release stating "its willingness to enter
discussions with governments and other manufacturers on the production of
Tamiflu for emergency pandemic use."  Roche's CEO, William M. Burns,
commented, "[W]e are prepared to discuss all available options, including
granting sub-licenses, with any government or private company who approach
us to manufacture Tamiflu or collaborate with us in its manufacturing."
The offer is conditioned on whether "such groups can realistically produce
substantial amounts of medicine for emergency pandemic use, in accordance
with appropriate quality specifications, safety and regulatory guidelines."

Roche's offer of voluntary licenses is illusory in its present form.
First, Roche says that it is prepared to "discuss" licenses, but does not
promise to issue any licenses whatsoever or even to expedite the normal
slow pace of licensing negotiations.  Second, Roche's offer does not
clarify whether licenses will have restrictive pricing terms whereby Roche
can set the selling price and/or require an above-market royalty rate.
(Roche could be suggesting that it will cooperate to increase quantities
but that it will not reduce price.)  Third, Roche does not clarify whether
it will impose geographical limitations on sales, thereby limiting access
to disfavored markets only.  Fourth, Roche does not clarify that it will
license manufacturing expertise so that generic products can be brought to
market more quickly.   Finally, Roche does not clarify that it will assist
licensees in obtaining product registration and marketing approval on an
expedited basis even where data exclusivity rules might otherwise block
registration.

In other words, Roche is attempting to privatize the response to a looming
public health crisis behind a opaque screen of private negotiations.  I
guess governments and consumers could sit on the sidelines while these
ill-defined, private negotiations are taking place, further delaying a
robust public response that would catalyze an expanded and cheaper market
for Tamiflu.  But isn't Roche one of the drug companies that have been
caught bribing doctors to prescribe unneeded medicines, or cooking the
books to hide adverse reactions to heavily promoted medicines, or engaging
in Medicare fraud, kickbacks to intermediaries, and countless other
profiting maximizing/health minimizing practices?

Roche needs to clarify its current, illusory offer.  It should offer
unrestricted and open licenses to any company that can meet quality and
safety guidelines.  It should set a modest royalty no more than 4%.  It
should not place limits either on price or geographical market. Finally, it
should offer its manufacturing expertise and comprehensive cooperation with
the registration process.