[Ip-health] From airline tickets to patent pools

[Judit Rius Sanjuan]

 From airline tickets to patent pools
PATENTLY ABSURD
Latha Jishnu / New Delhi July 23, 2008
http://www.business-standard.com/common/news_article.php?leftnm=3D10&bKeyFl=
ag=3DBO&autono=3D329383

Some extraordinary initiatives have been launched in recent times to
ensure that the poorest of the world have access to medicines to fight
pandemics and life-threatening diseases. One such is UNITAID, an
international drug purchase facility that brings together 27 countries
to help fight three killer diseases: HIV/AIDS, malaria and
tuberculosis. The project was started by France, Brazil, Chile, Norway
and the UK and its members are mostly African countries which are the
worst victims of these afflictions.

Set up on September 19, 2006, to ensure a stable source of funding,
the organisation has taken on board the Gates Foundation and South
Korea, and is hoping to extend its reach. India is not part of this
initiative although the UNITAID spokeswoman tells me that it is "one
of the target countries for membership".

UNITAID has been innovative from the start. To ensure sustainable and
predictable resources, it hit upon the idea of levying a solidarity
tax on airline tickets. Not all the member-countries have imposed the
levy but almost of them are in the process of doing so, each deciding
on what's the most feasible rate, given their level of development and
the elasticity of demand. Thus, African countries, for the most part,
are imposing the tax only on international flights, or on business/
first class tickets.

Early this month, UNITAID took a decision that can only be described
as momentous. Addressing the intellectual property aspect of access to
medicines, the executive board decided in principle to set up a patent
pool =97 a decision that has delighted health activists but is not
exactly making the pharmaceutical industry whoop for joy. A patent
pool is a mechanism in which various patents held by different
entities, such as companies, universities and research institutions
are made available to others for production or further development,
such as paediatric or fixed-dose formulations. The patent holders are
paid a royalty by those using the patents, with the pool managing the
negotiations, the licensing arrangements and payments. Medecins Sans
Frontieres (MSF), which has been pushing this idea for some time now,
says a patent pool can help speed up the availability of generic
versions of new medicines long before the 20-year patent term runs
out. For the IPR holder, too, there is an incentive: it would widen
the market for their products since drugs produced under licence from
the patent pool would be exported to designated countries.

A patent pool has become increasingly critical because the prices of
new drugs are way too high for patients in poor countries, specially
for antiretrovirals (ATRs) to treat AIDS. MSF pays between $613 and
$1,022 for the newer WHO-recommended regimen for first-line AIDS
treatment =97 a seven to 12-fold increase compared to older first-line
treatments which are now available for just $87 per patient per year.
Increased competition would bring down prices and MSF believes that a
patent pool is the best way to do it. UNITAID's budget for the current
year is just $361 million, far from adequate for the demand it needs
to meet.

One reason why activists are pushing hard for patent pools could be
the India factor. Earlier, it was an aggressive push by Indian generic
companies that dramatically brought down prices of the older ATRs and
turned the country into the =91pharmacy of the world' as Ellen =91t Hoen,
director of policy at MSF's Access Campaign, once described it. That
was before the product patent regime was introduced in India in 2005.
Today, it's doubtful if India can continue to play such a role. The
takeover of Ranbaxy, the country's largest company, by the Japanese
Daiichi Sankyo and the trend of domestic companies entering into
restrictive licensing agreements with the global pharma giants has
virtually signalled the end of the glory days.

A patent pool is also a better alternative to compulsory licensing
which is running into tortuous litigation and retaliatory action from
the patent holders. But can a patent pool for drugs become effective?
Patent pools by themselves are not a new idea, and were used as early
as the 19th century to manufacture sewing machines. In the last
century, the concept was used to solve both R&D (upstream) and access
(downstream) problems in the manufacturing, metallurgical, paper,
electrical, and chemical industries.

Today patent pools are a favoured system in technology sectors that
require common standards, such as the MPEG-2, DVD-video, DVD-ROM and
radio. Medicines, though, are trickier terrain. What it requires is
more imaginative management. UNITAID may be able to pull it off with
some luck and lots of hard work. It is first setting up a task force
that will formulate an operational plan for creating the patent pool.
It is already looking for the right members for this task force =97
experts in patent law, legal and business risks, economic analysis,
public health and medicines =97 and is hopeful getting it started in a
month's time. They have a delicate and onerous task before them.
Millions of people are waiting hopefully at the patent poolside.




Judit Rius Sanjuan
Attorney
Knowledge Ecology International / Essential Information
www.keionline.org / www.cptech.org
Phone: +1.202.332.2670, x18