PATENT POOL & its CONCERNS PATENT POOL & its CONCERNS Manmohan A Amonkar 20 July 2010

Patent Pool “An Agreement between 2 or more patent owners to license 1 or more of their patents to one another or to third parties” “An Agreement between 2 or more patent owners to license 1 or more of their patents to one another or to third parties” Way to centralise licensing processes Way to centralise licensing processes Stop & Shop Facility Stop & Shop Facility Overcome the “Tragedy of Anti-commons” Overcome the “Tragedy of Anti-commons”

WORKING PatentPool PatentOwner Generics R o y a l t y

Timeline of Medicines Patent Pool Foundation (MPPF) 2006: Proposal to UNITAID to establish a patent pool on medicines 2006: Proposal to UNITAID to establish a patent pool on medicines July 2008: UNITAID Executive Board (EB) agreed, in principle, to establish a Voluntary Medicines Patent Pool July 2008: UNITAID Executive Board (EB) agreed, in principle, to establish a Voluntary Medicines Patent Pool June 2010: UNITAID EB decided to establish the Medicines Patent Pool Foundation (MPPF) as a separate not-for-profit entity constituted under the laws of Switzerland. June 2010: UNITAID EB decided to establish the Medicines Patent Pool Foundation (MPPF) as a separate not-for-profit entity constituted under the laws of Switzerland.

Benefits for Patent Owner Receipt of Royalties from Generic Companies Receipt of Royalties from Generic Companies Access to new markets Access to new markets Boost to reputation Boost to reputation

Benefits for generic companies Easier access to IP by Generic Companies Easier access to IP by Generic Companies Reduction of licensing transaction costs Reduction of licensing transaction costs Elimination of difficulties due to blocking patents Elimination of difficulties due to blocking patents

Benefits to patients: MPPF Goals Expedited availability of low cost medicines without having to wait for patent term to expire. Expedited availability of low cost medicines without having to wait for patent term to expire. In context of need for second-line and newer lines of treatment, In context of need for second-line and newer lines of treatment, –Fixed Dose Combinations –Pediatric Formulations –Heat stable formulations Increased access to affordable medicines in developing countries Increased access to affordable medicines in developing countries Price Reduction Price Reduction

Cryptic Dangers VOLUNTARY LICENSES (Hidden Devils) VOLUNTARY LICENSES (Hidden Devils)

Voluntary Licenses Contd.. Control Generic Competition Control Generic Competition 2006: Gilead offered voluntary licenses to 11 generic companies (Indian and others) on certain terms and conditions: 2006: Gilead offered voluntary licenses to 11 generic companies (Indian and others) on certain terms and conditions: Licensees should purchase active pharmaceutical ingredients only from certain authorised sources Licensees should purchase active pharmaceutical ingredients only from certain authorised sources Licensees should not export finished products to markets not approved by Gilead (eg Brazil) Licensees should not export finished products to markets not approved by Gilead (eg Brazil) withdraw patent oppositions on TENOFOVIR withdraw patent oppositions on TENOFOVIR Brazil: Tenofovir costs US$1,387 pppy while, in India, generic versions cost approximately US$ 99 pppy Brazil: Tenofovir costs US$1,387 pppy while, in India, generic versions cost approximately US$ 99 pppy

Restrict Innovation Restrict Innovation “One Stop Shop” for purchasing technology “One Stop Shop” for purchasing technology Dependency on innovator companies Dependency on innovator companies Stifle generic companies from developing their own technology Stifle generic companies from developing their own technology

EVERGREENING “Evergreening” of patents on medicines due to patents on “Evergreening” of patents on medicines due to patents on Fixed dosed combinations Fixed dosed combinations Pediatric formulations Pediatric formulations Heat-stable formulations Heat-stable formulations These new forms are likely to be patented in several countries. These new forms are likely to be patented in several countries. MPPF provides incentives to such evergreening practices MPPF provides incentives to such evergreening practices

Compulsory Licensing Compulsory licensing is a recognised flexibility available under the Agreement on Trade Related Aspects of Intellectual Property Rights Compulsory licensing is a recognised flexibility available under the Agreement on Trade Related Aspects of Intellectual Property Rights Negotiations with MPPF may enable patent holder to delay issuance of compulsory licences or government use Negotiations with MPPF may enable patent holder to delay issuance of compulsory licences or government use

Market Segmentation MPPF is purely VOLUNTARY in nature MPPF is purely VOLUNTARY in nature Balance of power titled in favour of patent holders Balance of power titled in favour of patent holders Insistence on exclusion of countries Insistence on exclusion of countries Tiered pricing / royalty Tiered pricing / royalty

Conclusion We must learn from the previous experience of Gilead voluntary licences We must learn from the previous experience of Gilead voluntary licences We must ensure that use of TRIPS flexibilities and other mechanisms such as anti-competition laws are not compromised We must ensure that use of TRIPS flexibilities and other mechanisms such as anti-competition laws are not compromised We must demand greater transparency We must demand greater transparency We must remember that this is one PROPOSED solution, and continue to work to push for strong public health safeguards in patent laws and oppose the present patenting practices We must remember that this is one PROPOSED solution, and continue to work to push for strong public health safeguards in patent laws and oppose the present patenting practices