[Ip-health] Indian Civil Society Letter on Patent Pool

[James Love]

Dear Gopa and others,

I would like to offer a few comments on your detailed and thoughtful
letter.  I will focus on just a few points.

1.  KEI strongly supports the use of non-voluntary licensing by
government to expand access to medicines.  KEI also notes the rarity at
which this has happened in Latin America and in some other countries
where the need for non-voluntary licensing is obvious.

We see the creation of a voluntary patent pool as something that would
promote the norm that patents would be subject to open licensing, rather
than as exclusive rights.  We think this is a good thing.

2.  There are reasons that a license for a patent would be separate from
a license that involved know-how or data.  A failure to license a
patent, by itself, creates a liability in some countries for the patent
owner, under competition laws.  This liability is not so clear if the
offer extends to know-how and or data.  For this reason, multiple
licenses for patents, know-how or data rights have advantages over a
single license.

3.  We agree that license terms for a patent pool should be
transparent.

4.  KEI thinks the patent pool should extend to any medical technology
that patent owners would be willing to license. It is, after all, a
voluntary pool.  The NIH and some universities, and some other patent
owners have expressed interest in licensing patents outside of a narrow
set of applications for AIDS, including even field of use rights for
patents that may or may not have any useful medical technology, but
might have.   The companies, on the other hand, are pushing to narrow
the scope of the pool.   We think the UNITAID board should distinguish
between the patents it wants to solicit, and the patents it wants to
accept.  It should probably be strategic in what it solicits, but quite
open to accepting what is offered.

5.  UNITAID can't do everything, and it has limited leverage.  It is a
voluntary pool.  To get any licenses, the pool has to charm the license
holders, or at make offers that have some business sense for the patent
owners.  It can create an offer for a license that asks for everything,
and fail to obtain licenses.  We think it is better to ask companies for
licenses for all developing countries, and let the patent owners say yes
or no, but also to limit the field of use, or provide a negative list of
countries where they will not license.  It is what it is.... a request
for licenses, and either a yes or a no on the other end.  If this
process is transparent, and if some countries are included and others
are not, it creates follow-on dynamics for countries that are excluded
to consider non-voluntary licensing.  I believe if the pool is
established, it will speed up rather than slow down non-voluntary
licensing, because it will bring some clarity to the patent landscape
and licensing policy.

6.  Nothing in the patent pool goes to the issue of whether or not a
country should issue a patent in the first place.  I would not mix too
many issues up in this negotiation... it is hard enough already.

7.  KEI is opposed in general to classifications of developing
countries, and supports an approach that allows patent owners to license
to only those countries they want.  The Gilead license included some
middle income countries, and excluded others.  Merck, GSK and other
companies have all had different ways of grouping countries.  I don't
think a standard classification of geographic areas by UNITAID works to
anyone's benefit.

8.  KEI of course does not think the pool should repeat the mistakes of
the Gilead licenses, in terms of segmenting generic suppliers and API.
I believe Gilead understands that certain exclusionary offers would be
unacceptable.

9.  It is in every developing country's interest that the pool includes
middle income countries, and that patent owners agree to license in
middle income countries.  In our opinion, that will not happen for many
important patents without greater financial incentives to do so.  If
developing countries were willing to issue lots of compulsory licenses
there would be little need for the patent pool.  So far, the use of
non-voluntary licenses have been very important, but have not be used as
widely as they should.

Several big companies that hold important medical patents for AIDS, TB,
hepatitis, malaria and other diseases have said they would be willing to
discuss a case where a fraction of drug budgets funded an innovation
dividend, and that that the innovation dividend was the alternative to
the exclusive rights......   such as a prize fund combined with the open
license - as a new business model.  Many NGOs have expressed interest in
this, but I am pretty surprised that there is not more explicit support
for this among NGOs.  It is not as if things have been going
perfectively for patients, and a reasonable agreement on how to
reconcile the interests of patients (low marginal costs of products) and
developers (negotiated R&D rewards) seems to be a sustainable system
that can be inclusive of middle income countries.  It is not just giving
away gifts to the industry, it is negotiating access on the best
possible terms.

Jamie


On Sat, 2009-12-12 at 20:37 +0530, Gopa Kumar wrote:
> --
> [ Picked text/plain from multipart/alternative ]
> 11 December 2009
>
> To the UNITAID Board Chair
>
> Dr Philippe Douste-Blazy
> Special Adviser on Innovative Financing for Development *
> *UN Under-Secretary-General
>
> This is with reference to the Patent Pool that UNITAID is working to
> establish to ensure the availability of ARVs to people in developing
> countries. The Patent Pool Implementation Plan is to be approved by the
> Executive Board meeting on 14-15 December 2009.
>
> As we all know, increasing protection of intellectual property (IP) in
> developing countries as a result of the TRIPS Agreement puts the lives of
> millions of people living with various diseases including HIV, cancer, he=
art
> disease, asthma, blood pressure, etc. at risk.
>
> TRIPS has created vast inequities in global health by formalizing and
> institutionalizing a system where a person's wealth is the prime determin=
ant
> of their health. For example, better anti-retrovirals are already being u=
sed
> in the treatment of HIV/AIDS by patients in the developed northern
> countries. However the same are not available to people living in the
> countries of the global south precisely due to prohibitively high prices =
and
> extremely controlled availability of ARVs that have been patented.
> Consequently, patients of the global south are compelled to use older,
> ineffective treatments. It is in this context that the patent pool is see=
n
> as a mechanism to mitigate the disastrous impact of IP protection on
> treatment; in the case of HIV, the hope is -
>
> 1) to allow for production of generic versions of second line and newer
> antiretroviral drugs
>
> 2) to allow for the development of fixed dose combinations of ARV medicin=
es
> simplifying treatment for PLHIV
>
> 3) to allow for the development of pediatric formulations by generic
> producers
>
> Members of Indian civil society have always been and are willing to discu=
ss
> the initiative of UNITAID in setting up a patent pool for HIV/AIDS in
> detail.
>
> However, we feel that there has been lack of transparency regarding the
> drafting and processing of the Patent Pool Implementation Plan. This owes=
 to
> UNITAID's formal refusal to share the Patent Pool Implementation Plan wit=
h
> civil society stake holders and patient groups in developing countries an=
d
> to only allow access after the forth coming Executive Board meeting. We a=
re
> disappointed that this is unlike the phase when the Pool was being
> conceptualized and the broad outline of the "idea" was discussed with som=
e
> civil society organisations and academia. Indeed, this has weakened the
> support that is crucial for its success.
>
> *Therefore, we are writing to you to share our concerns and apprehensions=
 on
> the intent and content of the above said implementation plan: *
>
> 1. *Undermining India's section 3(d)* - One issue that is of serious conc=
ern
> to Indian civil society is the Plan's casual reference to the development=
 of
> FDCs and pediatric formulations as "follow-on innovation". While these ma=
y
> be important adaptations better suited to the treatment needs of AIDS
> programmes of developing countries - they do not deserve patent protectio=
n
> as is argued by pharmaceutical companies in their ongoing lobbying and le=
gal
> actions to weaken one of Indian patent law's most important public health
> safeguards - section 3(d).
>
>  Attempts to patent such changes to the original molecule are best
> characterized as evergreening or the extension of monopolies on an existi=
ng
> medicine. Our concern in this regard has increased with the provision for
> mandatory grant backs of improvements - the Pool thus creates an addition=
al
> revenue stream for generic manufacturers precisely on such patents. The
> inevitable fallout of such a provision is an increase in patenting of suc=
h
> changes not only by multinational pharmaceutical companies who would like=
 to
> preserve their monopolies on as many changes and improvements as possible=
,
> but now also by generic manufacturers in the hopes of opening up revenue
> streams for themselves.
>
>  That voluntary licences form part and parcel of bad patenting practices =
of
> companies is evident from the actions of Gilead Sciences in India and in
> Brazil. Groups in these countries are involved in oppositions on multiple
> patent and divisional patent applications being filed by Gilead Sciences =
to
> create monopolies on *tenofovir* - a pre-1995 medicine. For civil society
> organisations involved in these legal battles, the logic is simple - the
> decision of who gets medicines and who does not can never lie in the
> shifting priorities or public relations compulsions of one company.
>
>  Without addressing this critical issue, what the Patent Pool would then
> achieve is the legitimization of bad patenting tactics - companies indulg=
e
> in such practices because there are incentives for them to do so and the
> Pool will just provide yet another incentive for bad patenting practices.
>
> 2. *Undermining support and resources for patent oppositions in India* - =
The
> legal challenge of patent applications by patient groups of known medicin=
es
> such as ARVs is technical, difficult but not impossible. In fact, patient
> groups have already enjoyed some measure of success with the rejection of
> patents on *imatinib mesylate*, *tenofovir* and *nevirapine hemihydrate*.=
 In
> other cases, the oppositions have resulted either in withdrawals of
> applications such as the one for the *lamivudine/zidovudine* combination =
or
> changes in patent claims. Groups in Thailand and Brazil are also using th=
e
> opposition system to safeguard their access to generic medicines and impr=
ove
> the functioning of patent examination processes.
>
> In fact they played an unacknowledged but crucial role in the production =
of
> second line ARVs by Indian generic producers - even though several
> applications were pending before the Indian patent offices. It is in this
> regard, that we would like to convey our deep feelings of despair and ang=
er
> on the Plan's approach to the discussion on India's patent law and patent
> oppositions. To discuss this purely as a matter of legal uncertainty for
> patent holders and generic manufacturers rather than a key public health
> safeguard has done a great disservice to those fighting on the ground, in
> the very real battlefield for access to medicines. The analysis of streng=
ths
> and weaknesses leads to the inevitable situation of pitting the Pool as a
> better choice against such work undertaken by Indian patient and legal
> groups in India. Indeed the descriptions on Pg 30 and Pg 128 paint a blea=
k
> picture leading one to interpret that the Pool makes a better choice for
> those who have supported such legal work in India till now.
>
> 3. *Undermining compulsory licensing* -The Patent Pool naturally reinforc=
es
> the patent system; it also bears the political risk of undermining advoca=
cy
> and strategies towards mainstreaming of TRIPS flexibilities. If the pool
> becomes a reality then ongoing negotiations with the Pool will be used by
> pharmaceutical companies to delay and even prevent developing countries f=
rom
> using public health safeguards like CLs or government use licences.
> Safeguards to prevent this from happening are not detailed in the
> Implementation Plan. It is crucial that the Patent Pool negotiations are
> transparent and time bound.
>
> We are also extremely wary of the suggestion in the Patent Pool
> Implementation Plan of the further incentives required for the inclusion =
of
> all developing countries in the Pool. While tiered royalty appears to be =
one
> suggestion, some of the other suggestions seem to be dependent or conting=
ent
> on government action. Generating this sort of role for developing country
> governments in the inclusion of their countries in the Patent Pool create=
s
> significant barriers for governments considering the issue of compulsory
> licences. For developing countries, the bargain for access was their
> agreement to implement the TRIPS regime. To create further obligations or
> further conditions on developing country governments for access to treatm=
ent
> is simply unacceptable.
>
> 4. *Undermining the 2016 TRIPS deadline for LDCs** *- One of the effects =
of
> the Patent Pool and the push by multinational pharmaceutical companies fo=
r a
> primary focus on LDCs is that patients and governments in these countries
> will effectively be paying increased prices (because of royalties) even
> though they are not required to enforce patent rights on pharmaceuticals.
> The disastrous consequences for LDCs (who rely on imports of key medicine=
s)
> of increasing patent protection in developed and developing countries was
> noted at the time of the Doha Declaration. The result was the Para 6
> solution, which is admittedly an absolute failure. Companies like Gilead
> Sciences have exploited this failure by giving out voluntary licences for=
 *
> tenofovir* and charging royalties for LDCs where, according to KEI's FTC
> complaint they had not even applied for and/or had not got patents. The
> Patent Pool will legitimize this practice. Pharmaceutical companies pay
> little attention to the filing of patents in LDCs but there is concern th=
at
> the proposed Patent pool will provide additional incentives for aggressiv=
e
> patenting by pharmaceutical companies in LDCs to seek the maximum royalti=
es.
>
>
> 5. *Faulty and unnecessary classification of developing countries* - The
> Patent Pool Plan has adopted the World Bank classification of countries,
> which will be used to assess treatment needs. It is unfortunate that the
> classification and the objectives of the patent pool are in two different
> directions. We apprehend that adoption of this list would leave out milli=
ons
> of patients in developing countries which have been classified as middle
> income countries by the World Bank. It is also not very clear about the
> rationale of having such a classification of countries. Ideally, all the
> deserving patients across the developing world should benefit from the
> generic production that the Pool facilitates. The World Bank classificati=
on
> will fragment the market further into low income, low-middle income,
> high-middle income and high income countries. This shows that the pool wi=
ll
> be driven by the faulty economic principles based on the per capita incom=
e
> of countries rather than their actual health needs and ability to access
> medicines and treatment.
>
> 6. *Controlling generic competition* - As with the case of all voluntary
> licences, one of the primary motivations for pharmaceutical MNCs to
> participate in the Pool will be their ability to control generic
> competition. The idea behind a public health oriented Patent Pool should
> have been to move away from such business practices regarding developing
> countries; instead it gives in to the demand of patent-owners to allow th=
em
> to segment even developing country markets; a decision that impacts patie=
nts
> lives, creates more inequities in access to treatment and considerably mo=
re
> pressure on developing country governments. The Pool also complicates
> considerably the process of negotiations for itself and will eventually
> allow pharmaceutical companies to blame, variously, the Pool, its partner=
s,
> governments, generic companies and civil society for not creating the rig=
ht
> conditions for the inclusion of all developing countries. In doing so the
> Patent Pool Plan also seems unmindful of the current consolidation alread=
y
> taking place between multinational pharmaceutical companies and Indian
> generic producers. By allowing patent owners to further segment the marke=
ts
> it promotes this consolidation and ultimately undermines the true
> competition it seeks to promote. The effects of this consolidation become
> even greater when the Patent Pool does not promote local manufacture as
> discussed below.
>
> 7. *Preventing local production* - The Proposed Patent Pool Plan aims mai=
nly
> at the supply of HIV medicines to lower income countries and may include
> some of the middle income countries under a different set of conditions.
> Thus it is simply a mechanism to address the issue of supply rather than
> promoting local production and transfer of technology. The Pool does not
> address the question of improving the local manufacturing capacity in the=
se
> countries. The beneficiaries of the Patent Pool in terms of production th=
en
> appear to be largely the bigger Indian generic companies that have the
> technology and expertise in producing generic formulations. But digging a
> little deeper, the ability to prevent local manufacture and transfer of
> technology is precisely the second primary motivation for pharmaceutical
> MNCs to join the Pool.
>
> *Indeed, according to their own presentation on the Patent Pool in Novemb=
er
> 2009, it is a matter where Gilead Sciences wants "consensus" with the Poo=
l
> before moving forward i.e. that local production should not be pushed.* T=
his
> approach ties the hands of developing countries that rely primarily on lo=
cal
> production for their healthcare programmes. It increases their dependency=
 on
> exports to the benefit of MNCs and large Indian generic companies rather
> than promoting sustainability and local transfer of technology. For LDCs,
> transfer of technology was a primary area where they were supposed to gai=
n
> from the TRIPS Agreement; something the Patent Pool undermines by not
> promoting local manufacture and transfer of technology.
>
> 8. *Transparency is a key concern* - The Patent Pool is not going to publ=
ish
> licensing agreements but only an overview of the license allowing compani=
es
> to escape public scrutiny. Nor is there any discussion of time lines for
> negotiations, publishing when negotiations start and when they will end,
> patents in which countries are being left out of the pool and hence the
> licences and require further negotiations, what additional conditions are
> being discussed and when those negotiations are expected to be concluded.
>
> 9. *Little bargaining power for the Patent Pool Entity* - By envisioning =
the
> Patent Pool as an independent agency as opposed to one housed within
> UNITAID, the only real bargaining power that the Pool had, as a purchaser=
 of
> medicines is removed. Thus, as far as Patent Pool negotiations are concer=
ned
> there is asymmetry in the bargaining power between patent holders and the
> Patent Pool authority which will work to the advantage of pharmaceutical
> MNCs. This is already evident from the Patent pool document that makes
> concessions on geographical scope and pays scarce attention to the issue =
of
> local production. We are also extremely disappointed by the analysis in t=
he
> Plan for where the Patent Pool should be located. We feel it unnecessary =
to
> comment on this as the lack of substance of the analysis is self-evident.
> Needless to say the choice of location again undermines the bargaining po=
wer
> of the Patent Pool by placing it far beyond the access of civil society i=
n
> the Global South.
>
> *10. **No clarity on licensing terms and condition or even the public hea=
lth
> parameters for their negotiation* - Apart from our concerns above, it is =
not
> very clear what kind of licensing and royalty conditions would be agreed =
to
> by the Pool. (a) *Will there be a proper transfer of technology as part o=
f
> the licence*?  Without this there will be a greater time lag in making
> available generic versions and increase in costs as generic companies wil=
l
> have to spend more time and money on producing the generic versions.
> According to a 2007 Oxfam supported study of voluntary licences, includin=
g
> those of Gilead Sciences, the transfer of technology was in fact
> insufficient for speedy and efficient generic production. (b) *Will sales=
 be
> restricted to government or also include the private market and vice vers=
a*?
> This is a crucial issue decided not by licence terms and conditions but b=
y
> the public health infrastructure of a country. Dependence on government
> programmes can be a great barrier where such treatment programmes are
> restrictive in nature as was the case in India when despite an offer of
> fully subsidized second line treatment by the Clinton Foundation and gene=
ric
> production, the Indian government delayed considerably the rollout of sec=
ond
> line treatment. (c) *How will disputes be settled?* We are extremely
> concerned that WIPO is being considered as the forum for dispute settleme=
nt.
> WIPO has a proven organizational history of approaching public health iss=
ues
> from a position that only strengthens intellectual property rights and
> benefits rights owners. *We do not view WIPO as a neutral or acceptable
> forum for dispute resolution for licences whose primary purpose is the
> promotion of public health.* (d) *Will licensors be allowed to control AP=
I
> supply*? (e) *How will the licence terms and conditions address those
> countries where there is data exclusivity?* We are greatly concerned by t=
he
> lack of clarity on these matters.
>
> We would like to re-iterate, that as a part of the IGWG process, the
> undersigned have always supported the use of new and alternate mechanisms
> for R&D and access including the Patent Pool. However, we strongly feel t=
hat
> the UNITAID Patent Pool Implementation Plan has not responded to the
> aspirations and concerns raised by the patient groups, civil society
> organizations, policy makers and academia in India. We urge the UNITAID
> Board to discuss and debate fully the concerns we have raised and to hold
> wider consultations with civil society and patients groups before approvi=
ng
> the Plan. We the Civil Society Organisations are formally signing on to t=
his
> letter:
>
>    1. National Working Group on Patent Laws (NWGPL)
>
>
>    2. Centre for Trade and Development (Centad)
>
>
>    3. LOCOST, Baroda
>
>
>    4. All India Peoples Science Network
>
>
>    5. Drug Action Forum - Karnataka
>
>
>    6. All India Drug Action Network (AIDAN)
>
>
>    7. Initiative for Health, Equity and Society (IHES)
>
>
>
> Cc.
>
> UNITAID Secretariat
>
> World Health Organization
>
> 20, avenue Appia
>
> CH-1211 Geneva 27
>
> Switzerland
>
> Telephone: +41 22 791 55 03
>
> Fax: +41 22 791 48 90
>
> E-mail: unitaid@who.int
>
> *Members of the Executive Board*
>
> Brazil
> Ms Maria Nazareth Azavedo Farani
> Ambassador*
> *Permanent Mission of Brazil*
> *Geneva, Switzerland
>
> Tel: +41 22 332 50 00
>
> Fax: +41 22 910 07 51
>
> Email: *mission.brazil@delbrasgen.org* <mission.brazil@delbrasgen.org>
>
> Chile
> Dr Fernando Mu=C3=B1oz
> Attach=C3=A9*
> *Permanent Mission of Chile to the United Nations and other International
> Organizations*
> *Geneva, Switzerland
>
> Tel: +41 22 919 88 00
>
> Fax: +41 22 734 52 97
>
> Email: misionchile@misginchile.org
>
> France
> Mr Patrice Debr=C3=A9
> HIV/AIDS Ambassador*
> *Ministry of Foreign Affaires*
> *Paris, France
>
> Tel: +33 1 43 17 71 12
>
> Fax: +33 1 43 17 75 72
>
> patrice.debre@diplomatie.gouv.fr
>
> Norway
> Ms Sissel Hodne Steen
> Counsellor*
> *Permanent Mission of Norway to the United Nations and other Internationa=
l
> Organizations*
> *Geneva, Switzerland
>
> Phone: +41-(0)22 918 0400
>
> Fax: +41-(0)22 918 0410 and +41-(0)22 918 0411
>
> E-mail: mission.geneva@mfa.no
>
> United Kingdom*
> *Mr Gavin McGillivray*
> *Head*
> *International Financial Institutions Department, DFID*
> *London, United Kingdom
>
> African countries*
> *Dr Damase Bodzongo
> Director General of Health*
> *Ministry of Health*
> *Brazzaville, Congo
>
> Asian countries*
> *Mr Sul Kyung-hoon
> Director General*
> *Development Cooperation Bureau*
> *Ministry of Foreign Affairs and Trade of the Republic of Korea*
> *Seoul, Republic of Korea
>
> Nongovernmental organizations* *(NGOs)*
> *
>
> Dr Mohga Kamal Yanni
> Sr. Health Officer *
> *Oxfam*
> *Oxford, UK
>
> Communities living with the diseases*
> *
>
> Ms Carol Nawina Nyirenda*
> *Treatment Advocacy & Literacy Campaign, TALC*
> *Lusaka, Zambia
>
> Constituency of foundations*
> *Mr Joe Cerrell
> Director of Global Health Policy & Advocacy*
> *The Bill & Melinda Gates Foundation*
> *Seattle, United States
>
> WHO*
> *Ms Namita Pradhan
> Representative of the Director-General for Partnership and UN Reform*
> *World Health Organization*
> *Geneva, Switzerland
> _______________________________________________
> Ip-health mailing list
> Ip-health@lists.essential.org
> http://lists.essential.org/mailman/listinfo/ip-health


--
James Love, Director, Knowledge Ecology International
http://www.keionline.org | http://www.twitter.com/jamie_love
Wk: +1.202.332.2670 | US Mobile +1.202.361.3040 | Geneva Mobile +41.76.413.=
6584