[Ip-health] Letter to UNITAID Board on Patent Pool Plan from Peoples Health Movement

[amit sen]

                                                  10 December, 2009
To,

The UNITAID Board Chair
Dr Philippe Douste-Blazy
Special Adviser on Innovative Financing for Development
UN Under-Secretary-General

We understand that the UNITAID=E2=80=99s Executive Board is to meet on 14-1=
5th December to finalise the Patent Pool implementation plan.

We are writing to you on behalf of the Peoples Health Movement =E2=80=93 th=
e largest global network of Civil Society Organisations working on health a=
nd access to health care, with a presence in over 80 countries across the g=
lobe. We wish to present to you some concerns regarding the Implementation =
Plan for the UNITAID Patent Pool.

The PHM appreciates the initiative by UNITAID to secure better access to es=
sential medicines. We understand that a Patent Pool is one of many initiati=
ves that are being discussed in various fora to enhance access, especially =
since the conclusion of discussions at the Intergovernmental Working Group =
on Innovation, Intellectual Property Rights and Access.

The IGWG was an important step forward in harnessing diverse energies to ad=
dress, for the first time, issues of R&D and access in a comprehensive mann=
er. We believe that, in order to build upon the foundation laid in the disc=
ussions at the IGWG, different initiatives need to emerge =E2=80=93 which w=
ould complement each other. We see the Patent Pool initiative as one among =
many such potential initiatives.

While the Implementation Plan that is to be discussed at the UNITAID Board =
meeting was not made public, friends and colleagues who have felt that PHM =
may indeed have some valuable insight to offer on the Implementation Plan h=
ave been kind enough to provide us with details on the contours of the Plan=
. These have since been confirmed by reports that have been circulating in =
the past one week. We base our observations and concerns on these reports.

Developing countries - market segmentation
We understand that there is a proposal to segment the markets of developing=
 countries (that are classified as low and middle income countries) through=
 the Patent Pool Implementation Plan, whereby pharmaceutical companies woul=
d be able to choose the countries in which the Patent Pool would be made op=
erational and/or negotiate the terms and conditions for the inclusion of al=
l these countries in the Pool. This is perhaps based on the premise that th=
e Pool would target countries that are seen to require the largest levels o=
f support to secure access. However, such segmentation is fraught with seve=
ral problems.

First, it must also be remembered that when one speaks of so-called middle =
income countries, the discussion is not just about China or Brazil but abou=
t 101 countries across all regions of the world.

The situation as regards access is extremely precarious in many of the so c=
alled =E2=80=9Cemerging economies=E2=80=9D, such as India, China, Brazil, a=
nd South Africa. Neoliberal policies, that inform the trajectory of many of=
 these emerging economies, have also increased inequities that are not appa=
rent when one looks at gross data regarding economic performance. Thus, whi=
le India is categorized as a middle-income country, more than third of the =
population lives on less than a dollar a day!

Second, domestic manufacturing and R&D capacities, are uneven between low a=
nd middle income countries. For several of the developing countries in ques=
tion, local manufacturing is the foundation of medicines supply to their pu=
blic health systems. The history of voluntary licencing has shown that it i=
s in fact these countries that multinational pharmaceutical companies prefe=
r to exclude from licences. In some of these countries, generic supply is o=
nly possible through local manufacture. Further, if some important countrie=
s that have such capacity are not included in the pool, there may not be en=
ough generic manufacturers who would be able to make use of the Patent Pool=
 and supply to countries that do not have capacity to manufacture. The publ=
ic health impact of the Patent Pool in terms of local manufacturing is an i=
ssue that has simply not been properly examined or discussed.

Third, this might open the way for insistence by Pharmaceutical companies t=
o put in place onerous mechanisms to prevent =E2=80=9Cleakage=E2=80=9D into=
 markets not covered by the Pool. We have already had one very negative exp=
erience with such a mechanism in the case of implementation of para 6 of th=
e Doha Declaration. We trust that no such mechanisms, which create greater =
barriers to access and result in price increases -- again to be borne by pa=
tients -- are being contemplated by the Pool.

On balance, allowing pharmaceutical companies to =E2=80=9Ccherry pick=E2=80=
=9D has the potential of being in the interest of Big Pharma, to the exclus=
ion of other stakeholders. Big Pharma would lose very little in terms of ex=
isting markets, would be secure in the knowledge that the global IP system =
is only being strengthened, will reap enormous benefits from an accelerated=
 Public Relations drive that deflects attention from their continuing activ=
ities that severely compromise access, and even secure finances in the form=
 of royalties from public health budgets of developing countries. It should=
 be clear in any discussion on royalties that this is ultimately what patie=
nts or governments will pay; not generic manufacturers who take licences fr=
om the Pool.

We note that the UNITAID Board Chairperson has made a public statement to t=
he effect that the aim of the Patent Pool is to include all low and middle =
income countries. Our concern is on the details of how this will be achieve=
d.

It appears from the proposal on the implementation of the Patent Pool, that=
 patent owners would be allowed the opportunity of additional negotiation a=
nd additional incentives to include all developing countries. The nature an=
d form of these additional incentives and conditions must be the subject ma=
tter of proper public scrutiny.

First, any discussion on =E2=80=98additional royalty=E2=80=99 is ultimately=
 a discussion on how much more patients, directly or indirectly through the=
ir governments, will have to pay for treatment. We have already noted above=
 that the dichotomy between low and middle income countries presented by th=
e World Bank is misleading at best. To use this standard to determine who p=
ays more money for critical medicines would be a grave mistake.

Second, other than royalty, additional incentives in our opinion can only m=
ean seeking the intervention and/or support of developing country governmen=
ts. Would this mean that developing country governments would then be respo=
nsible for taking steps to get their countries included in the Patent pool?=
 What would the impact of such a scenario be on the kind of international p=
ressure that is brought to bear on a country considering compulsory licensi=
ng?

Third, there is no indication whatsoever of the parameters of these additio=
nal negotiations. Will they be time-bound? Will they be transparent?

Thus, we believe that it is insufficient for the Patent Pool to start with =
a position that aims to cover all so-called low and middle-income countries=
. Any public health oriented patent pool, must on principle guarantee inclu=
sion of absolutely all developing countries in the negotiations for a licen=
se from the very beginning. The offer of increased royalty must be calculat=
ed with great caution and awareness of the limitations of World Bank classi=
fications.

Legitimizing evergreening
We also wish to advise caution in proceeding with the implementation plan, =
as regards how it treats evergreening =E2=80=93 the well known method of ph=
armaceutical companies to extend patent monopolies by making small or minor=
 improvements to existing medicines. The Patent pool must be careful not to=
 confuse the need to better adapt medicines first produced in developed cou=
ntries to the needs of developing countries with whether the methods or for=
mulations as a result of such improvements should be patented or not.

It has been established, albeit gradually, that such processes and the impr=
oved formulations that emerge from them are unlikely to, and indeed should =
not meet the patentability criteria in any country. Some countries, such as=
 India and the Philippines, have made this clear through legislation. Other=
s are improving their patent examination standards to ensure that such atte=
mpts to create multiple monopolies on a medicine do not succeed. It is not =
clear whether through the Patent Pool mechanisms such activities will be se=
en as patentable and thereby come in conflict with domestic patent legislat=
ions in some countries.

In fact, there is a clear need for a proper assessment of the impact of the=
 Patent Pool in terms of reinforcing or unintentionally promoting evergreen=
ing patents or patents on obvious or known processes and products.

In this regard, grant-back provisions for generic producers to contribute i=
mprovements back to the Pool need to be evaluated. Thus, one would have to =
ask, if this is a patent pool or technology pool? If generic producers will=
 be entitled to royalty from their grant-backs, would this lead to an incre=
ase in such kind of patenting by generic producers? Would the prospect of r=
oyalties also encourage Big Pharma to continue to pursue such patent applic=
ations throughout the developing world even though the harmful impact they =
have not only on access but also on research has been well noted.

Compulsory licensing
We appreciate the recent statement on behalf of the UNITAID Board that the =
Patent pool will not conflict with the use of TRIPS flexibilities, such as =
compulsory licensing. However, the very notion of segmentation of middle an=
d low income countries shifts the balance of power in favour of pharmaceuti=
cal companies. They could be in a position to shun countries that are seen =
to be proactive in using TRIPS flexibilities or negotiate more onerous cond=
itions for their inclusion in the Pool. This has the potential to set the P=
atent Pool initiative in direct conflict with TRIPS flexibilities.

Without sufficient safeguards in the Pool Implementation Plan on all these =
matters, we fear it will in fact be no better than the existing so-called =
=E2=80=9Caccess=E2=80=9D programmes of patent owners.

Governance of the Pool
We are also not clear regarding governance and decision making structures o=
f the Pool and the location of such structures. By all indications it appea=
rs that the choice of location and legal scrutiny is pegged in the United S=
tates. Needless to say, such a location presents very little credibility fo=
r patients and civil society in developing countries. In terms of governanc=
e, the UNITAID Board would do well to remember that decisions on licence te=
rms and conditions are ultimately decisions on which patients and governmen=
ts get access to medicines and which ones don=E2=80=99t; for those that do,=
 further decisions on royalty and other conditions that can turn out to be =
too onerous to comply with are again decisions that directly impact patient=
s lives. These decisions must accordingly be subject to the highest level o=
f scrutiny and approval. It is crucial, that these issues be decided in a m=
anner that does not compromise the balance of power and place inordinate
 power to preside over the lives of millions of people in the hands of Big =
Pharma and its supporters among country governments.

We also understand that the Patent pool, at present, is conceived for antir=
etroviral medicines. We appreciate the fact that constructing a Patent Pool=
 is a complex mechanism and separate efforts may be necessary to develop su=
ch Pools in other therapeutic categories. However, this is a necessary goal=
 to be pursued, and must be included in any road map of an implementation p=
lan for Patent Pool(s).

The Peoples Health Movement would urge you to consider the proposition that=
 the Patent Pool mechanism would ultimately be weighed on the consideration=
 whether it strengthens or disarms the global struggle to secure sustainabl=
e, equitable and inclusive access to health products. Given the strategic r=
ole that the Pool can play, it is imperative that all stakeholders, includi=
ng Civil Society Organisations and patients groups in Asia and Latin Americ=
a, be consulted adequately before a Final Plan is adopted.

The Peoples Health Movement urges on the UNITAID Board to consider the conc=
erns raised. We are confident that we both stand on the same side, as regar=
ds the felt need to reverse the present power relations that IPRs ensure. W=
e hope that the UNITAID Board shall respond to these concerns.

Your Sincerely,

Bridget Lloyd (PHM Global Co-ordinator)=09Amit Sengupta
On Behalf of the PHM Steering Committee