What are the intellectual property issues in healthcare?

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What are the intellectual property issues in healthcare?

Does intellectual property impact access to medicines? How so? What is the impact on access to medicines, treatment and information in developing countries?  

Share your ideas on this topic by adding a new comment below or replying to existing comments!

Why are there so few "ability to pay" norms in health care IP?

Inequality will continue to grow as technology puts more and more people out of work. Given that trend, any humane program of liberalism must proceed towards a minimum basic income. Individuals should be guaranteed a minimum of food, shelter, education, information and communication technology, and health care (our topic today).

My question is: why aren't there more "ability to pay" norms in health care IP?  Can we estimate how much death and suffering happens each year because of lack of access?

This is not unique to health

Without wanting to stray off topic, I think the answer is that there are few "ability to pay" norms in IP more broadly.  Moreover these shouldn't be confused with "pay what you feel" norms, which, however, are also rare.  As far as "ability to pay" is concerned, there was the Creative Commons Developing Nations licence, but it has been retired and deprecated.  It was never used in health care IP, anyway (as far as I know).


Could you please explain a bit further how "ability to pay" and "pay what you feel" norms differ and how they relate to IP in general?

"Ability to pay" and "pay what you feel"

First, these are not really IP terms of art.  And second, apologies that I'm not giving any examples from health here, since that's not my main specialty area. Maybe someone else can fill in the gaps.

Being charged based on ability to pay does not necessarily mean that anyone is receiving a subsidy.  In fact, price discrimination, based on ability to pay, is an economically rational decision for a supplier to make.  The difficulty is that it is not always practical, because how does the supplier check how much the buyer can pay?

So the development level of the country is used as a proxy for ability to pay.  But even then, suppliers resist charging differential prices, because they fear that parallel imports will come back from the poorer countries where their product is cheaper, to the richer ones.

This is why the lowest price for a new release original American DVD or CD anywhere in the world differs by only about 50%, though the income level can differ by more than 90%, and the production costs would allow for a a 90% discount and even make this economically sensible.

Pay what you feel is different.  This is a new model, whereby the burden of determining what the consumer can pay is shifted from the supplier to the consumer's conscience.  They receive the product essentially for a donation.  It has been seen most often in the music industry, most famously by Radiohead, but also by many others including all the artists on the Magnatune record label.

Either model is equally compatible with IP law.  The rights granted to the purchaser or licensee don't have to be any different based on what they pay or how it is calculated.

Ability to Pay

I am not clear about your reference to "ability to pay" norms and it's application to Intellectual Property. Could you further explain what do you have in mind? Are you suggesting that communities or countries that lack access to information, patents, or technologies be subsidized in some way??   

Answered above


Drug patents and their impact on access to medicine

Hi everyone,

I'd like to point out the issue of drug patents as an intellectual property issue that impacts access to essential medicines. The problem is basically this:

Essential medicines are out of reach for poor people.

The UAEM website points out:

Ten million people die each year from diseases that have available cures. Tragically, the essential medicines to treat such diseases are lacking throughout much of the world. Nearly a third of humanity does not have regular access to essential medicines, and in the poorest parts of Africa and Asia this figure rises to over 50%. During the fifteen seconds it takes to read this paragraph, five people have died from preventable causes.

Many medicines (such as HIV/AIDS treatment) is too expensive for the very people that suffer from treatable illnesses.  Why is this the case?  One major reason for this is drug patents for these essential medicines.  Pharmaceutical companies patent their drugs so that companies cannot create generic versions of these drugs.  A patent is the legal right to exclusively manufacture and sell something so that it is possible to recoup investment costs. 

That sounds fair, in an economic sort of way - but there is a big dilemma here.  Pharmaceutical companies enjoy the title of second most profitable industry in the world.  Their profit margins are around 25%.  At the same time, they are manufacturing and distributing medicines that save peoples' lives.  Is it reasonable to profit so much off of something that is clearly the right of a human being?

There is a great TEDxTalk presented by Mike Gretes of Universities Allied for Essential Medicines (UAEM) at a school in 2008: http://essentialmedicine.org/issues

  • The first 10 minutes (the full video is 23 minutes) gives a great overview of the basic issue around drug patents. 
  • The last 10 minutes introduces a new approach (Global Access Licensing) to improve access to essential medicines but still keep the pharmacutical companies happy.  Well talk about this UAEM approach and other ideas throughout the week in this online dialogue, so stay tuned!

Certainly there are other reasons why people do not have access to medicines - there are many medicines that have not been developed yet. I'll leave that issue for another thread.

What are your thoughts on the impact that drug patents have on access to essential medicines?  Should essential medicines be affordable?  Is this a human right?  What other intellectual property issues impact access to healthcare?

Should essential medicines be affordable?

If we are going by the WHO’s current interpretation of the term ‘essential medicines’, these medicines are by definition affordable.  Per the WHO, essential medicines are selected based on disease prevalence, efficacy and safety, and cost-effectiveness.  They go on define essential medicines as medicines that are available in the appropriate dosage forms with assured quality, and at a price the individual and the community can afford.  So at the moment, essential medicines technically only include those medicines that are already affordable. 

 I believe that a more ethical definition of an essential medicine is one that does not include reference to cost.  Medicines should be defined as essential based purely on an assessment of medical need (this is a closer approximation of UAEM’s working definition of an ‘essential medicine’).  I believe that for any medicine deemed ‘essential’ on this basis, measures should be taken to make it affordable.

Essential medicines in international law?

Thank you for adding this comment, Sara!  I didn't realize that the WHO includes 'affordability' in its definition of 'essential medicines.'  Can someone explain what impact this has on activism around access to essential medicines?  If the WHO changed the definition of 'essential medicines' and took out any reference to cost - what would that change, exactly?  What kind of impact does this definition have on this intersection of intellectual property and access to medicine?  I also wonder if this is somehow connected to international law.  Are there international treaties that layout guidelines for stakeholders - pharmaceutical companies, governments, patients, etc? 

Thank you!

Essential Medicines and Affordability

It should be said at the outset that price is not the only determining factor in whether someone has access to medicines.  Many will argue that patents and price are not the problem as most of the medicines on the WHO Essential Medicines List are not on patent.  If we accept this argument, however, we ignore that price is clearly important and yes there are important logistical and other barriers, but we should work to improve access at every potential barrier point.  Price and patent status is of course related to the criteria of "comparative cost effectiveness."  Logically, medicines that are not on patent will be cheaper and therefore more cost-effective.  I don't quite agree though that comparative cost-effectiveness means they will be affordable given the wide audience that the EML is aimed at.  The EML is used by many countries to set drug purchasing priorities for their national health systems and so they put a premium on getting these medicines affordably (typically there is a corresponding national list that is occasionally amended).

I think an essential point with patented medicines and price, whether or not a medicines is on the EML, is that in many cases they simply do not have to cost what they do, particularly for poor populations.  In many case, if a newer medicine is on patent and therefore fails in being cost-effective, that would be due to a failure to take into account the fact that the price is somewhat arbitrary, particularly for a country that could issues a compulsory license and bring the price down through WTO rules.  Perhaps one way to think about changes to the EML would be that WHO should put a greater emphasis on proactively helping to remove patent and other IP barriers to needed medicines for poor countries.  They could also focus more on actual costs of production assuming IP barriers were removed rather than the production + IP + other stuff price.  This could create a better evaluation of medicines based on medical need.

Legal Prospective

I think from a legal prospect, some of the issues with intellectual property and its impact on access to medicine stems from the continuos blurring the courts have allowed with patentable subject matter. Originally, a person could not patent things that already existed in nature because the courts were concerned with allowing a monopoly to one person over things that are naturally available to everyone. Later the courts redefined the general rule to allow all "man made" creations whether living or non-living to become patentable, which includes bacteria and other living organisms. The legal rule was again expanded to include the Purification Rule. This rule states that when the 1st person extracts a product and makes it available for any use,  and the product becomes a new thing commercially and therapeutically, it is patentable.

This is the state of the law now that allows the patentability and monopoly over many human genes and strands of DNA. The monopoly over these "products" prevents other companies and even other countries fair access to essential components for independent development of cures for many diseases, like cancer.    

But for how much longer?

Thankfully, though, the USPTO is widely seen to have overstepped the mark in allowing gene sequences to be patented, and is being reigned back by the courts. In March 2010, the patents awarded to Myriad Genetics over gene sequences BRCA1 and BRCA2 that are used to test for breast cancer, were ruled invalid by a New York Federal Court in a test case brought by the ACLU.  This ruling is under appeal.  A similar test case to invalidate the same patent claims has since been launched in Australia.  What confounds the expectations of most ordinary people is that the patents were not granted over a genetic treatment, but over the isolated gene sequences themselves.  As a result, nobody could even test for those genetic sequences, without infringing Myriad's patent.

subject matter patentability

Interestingly, as most of the people participating in this dialogue probably already know, the patenting of the BRCA1/2 genes isn't much of an anomaly.  It's estimated that 20 percent of the human genome has been patented.  This obviously has serious implications for downstream research and innovation.

If the future of medicine is personalized treatment, it's extremely important to focus on properly identifying and weeding out claimed inventions that don't qualify as patentable subject matter.  This question maybe fits in one of the other threads better but I'll flag it here: what are the opportunities for tackling the patentable subject matter question short of trying to influence legislation or submitting amicus briefs in (the rare) patent cases?  Lately I've seen a few "Requests for Information" (RFI's) in the Federal Register from the USPTO soliciting public input on how to implement new patent examination rules as the courts hand down patent decisions.  The Center for Patent Innovations at NYLS recently submitted position statement in response to the USPTO's RFI on how to determine subject matter patentability post Bilski.  Of course it's not clear just how much influence one can have on these types of matters by simply submitting position statements, but it's a start...

IP barriers not just patents

I frequently find that in discussion of IP and access to medicines, the focus tends to be mainly, if not entirely, on patents.  For traditional small molecule drugs (eg: drugs that can be chemically synthesized), I believe that patents are a critical issue determining access because they are main impediment to generic production.  With regard to biologics, and particularly vaccines, I would argue that patents are not the sole, or even main barrier to access.  Rather, I believe that data exclusivity and trade secret protections are critical impediments to access.  I also believe that an IP activist community that has traditionally focused on patents needs to expand their focus and expertise to cover these two issues in order to be effective in promoting access to new vaccines and biologics.

With regard to vaccines, historically it has taken 15 to 20 years to introduce new vaccines into poor countries after their introduction in high-income markets.  This situation is clearly not acceptable.  There are a number of underlying causes, but vaccine cost is undoubtedly a critically important issue.  In general, the best approach to sustainably ensuring affordable drug prices is generic production.  In the case of vaccines, it is likewise clear that the existence of multiple developing country vaccine manufacturers is crucial to achieving affordable vaccine prices.  Unlike small molecule drugs, however, addressing the issue of patents will not by itself allow the production of affordable generic vaccines.  Because of their complexity, vaccines cannot be reverse engineered like small molecule drugs, and it is necessary to have access to information about the production process in order to replicate the vaccine.  Detailed production process information is not covered by patents, instead being covered by trade secret law, meaning that it is NEVER made publically available.  A major need in the vaccine market is a strategy facilitate the dissemination of process secrets to developing country vaccine manufacturers.  

More on the issue of biologics and the current debate regarding data exclusivity for generic biologics later. 

I absolutely concur. What

I absolutely concur. What changes in trade secret law or policy do you believe would be most effective in making this information more accessible??  

Addressing trade secret protections

Two of the major approaches I believe will be important are 1) disclosure requirements, possibly based on the concept of enableabiliy, and 2) technology transfer hubs. 

Over the course of the recent debate over generic biologics, BIO has worked very hard to argue that for biological drugs the process = product, meaning that it is impossible for generic companies to replicate a product without having access to (trade secret protected) manufacturing process information. An argument has been made that this actually violates the requirement for enableability (which, as I understand it, requires that the patent must include enough information for someone skilled in the art to replicate the patented invention). In any case, one approach would be to require disclosure of trade secret protected manufacturing process information in the patent or at the time of patent expiration, or alternatively, a company could opt to disclose process secrets at the time a product is approved IN EXCHANGE for a period of data exclusivity. Industry would be scandalized at even the mention of the idea of requiring process secret disclosure, however I believe that we are never going to see anything that resembles true generic competition in the field of biologics until there is a large degree of disclosure of manufacturing information that currently NEVER becomes publicly available because it is protected by trade secret law. It is interesting in the generic biologics debate, because it is spoken about as if there is some law of god preventing generic manufacturers from truly replicating originator biologic drugs. I think that the first step forward will simply be to get people to recognize that this is a CHOICE that we are making by deciding not to require process information disclosure.

I think that in some cases, particularly for vaccines, a technology transfer hub or a Patents-Materials-Know How Pool (PMK Pool) approach would be superior. A technology transfer hub is the approach that the WHO recently used to deal with the shortage in flu vaccine supplies. The idea is to compile full documentation of all relevant manufacturing process information and then develop training modules that cover the relevant know-how for a given vaccine. This package could then be licensed out to multiple developing country vaccine manufacturers who would then be enabled to start producing the vaccine efficiently and cost-effectively. This approach has so far been hugely successful with the flu vaccine (initiated in 2007, there are now at least 11 developing country vaccine manufacturers licensees, 5-6 of whom have registered their products).

A downside of the technology transfer hub approach is that it only works in cases when there are no interfering patents. A more comprehensive approach that would address this issue is he idea of the PMK Pools. This strategy would essentially combine the technology transfer hub approach with the UNITAID Patent Pool approach, as well as include materials transfer agreements for any critical materials (eg: cell lines). PMK Pools would thus bring together everything necessary to manufacture a given vaccine into a single location, allowing 'one stop shopping' for any developing country vaccine manufacturer wishing to license with the PMK Pool to produce the vaccine. 

IP + everything else to create barriers to affordability

Sara is completely right that patents are not the only barrier to access.  Pharma has a very well thought out strategy of how to use a variety of strategies that impeded access to affordable medicines.  In the 1990s and early 2000s with the creation of medicines to treat patients laid low by the AIDS crisis, many activists realized that patents were a key barrier.  When UAEM started for instance, we campaigned for access to stavudine, an early HIV/AIDS treatment that cost $1,600 per patient per year in South Africa.  This was clearly unaffordable.  Working with Doctors Without Borders, we convinced Yale University, the patent holder, and Bristol Myers-Squibb, the company marketing the drug, to allow it to be produced generically, which brought the price down to $55!  By Yale's own words they didn't lose money on the deal as no one could afford the drug in any case.  Such is the power of generic competition that the cost of the earliest tri-therapy to treat HIV has dropped from over $10,000 in 2001 to less than $100 today.

Despite important victories, the difficulties we currently face are many.  In the realm of patents, due to World Trade Organization rules, all member states, including some of the poorest countries in the world, will have to have patents on medicines by 2016.  Important middle-income countries such as Brazil and India already have the requirements in place which prevents them from making affordable versions of many newer medicines that are still on patent despite tremendous poverty throughout the world.  

Beyond patents (and trade secrets as mentioned by Sara), there are two other related areas that we need to watch: data exclusivity and purposeful confusion of legitimate generics with counterfeits.  Drug companies have been seeing their pipelines dry up and have had patents on medicines susceptible to invalidation (see very interesting work by Hemphill and Sampat).  They've also realized that given that patents can be challenged and invalidated, protection through data exclusivity is a good deal for them.  Data exclusivity is a protection given to data that is used by the drug authority (such as the FDA) to approve the drug for market.  Unlike patents, it is simply granted and therefore cannot be challenged.  So, in the case of generic biologics you have a sure shot at 12 years from data exclusivity whether you have valid patents or not.  There is a shift through many trade agreements to push data exclusivity on India (EU-India Free Trade Agreement) or extend the period (e.g. EU-Canada FTA).  In the US, with 12 years of exclusivity we are already hearing rumblings of wanting to extend the period for everyday medicines past the current 5 years.  Why would others not just repeat the trials to replicate the data? First, it would be unethical to repeat tests that you know will allow some patients to suffer while receiving a placebo or some alternative to the ideal dose already approved.  Second, the testing is the most expensive piece of the drug development puzzle and would therefore largely eliminate savings for any company wanting to produce a cheaper version.

For now, I'll skip the counterfeit issue given the length of this post.

The point being: We need to watch patent issues but also need to closely follow and push back against efforts to extend data exclusivity.

There are very positive initiatives to counter this but there need to be more.  I'll discuss what's been happening in later posts.

patent pooling

how about patent pooling as a way to support affordable medicines by reducing cost and time of production? 

Patent pools

I agree that patent pools could have an important role to play in lowering the price of certain small molecule drugs. For biologics and vaccines, however, I do not think that patent pools are the answer. Partially because they do not do anything to address the issues of data exclusivity and trade secrets. See my above posting though for a similar concept that I do believe has potential to improve access for vaccines and possibly other biologics.

Patent pools beyond patents

Sara's right that if a pool focuses only on patents it won't get very far on biologics.  There has been some thinking however on how to deal with a number of other issues so that it could clear blockages from data exclusivity, etc.  You can read KEI's work on this here and an article that Sara and I wrote on it here with regard to the HPV vaccine.

University Contributions to the HPV Vaccine and Implications for Access to Vaccines in Developing Countries: Addressing Materials and Know-How in University Technology Transfer Policy
    Sara E. Crager, Ethan Guillen, & Matt Price

Generic companies replicating clinical trials

Actually, in the situation you are talking about a generic company would probably preform a non-inferiority trial as opposed to a placebo controlled trial. A non-inferiority trial aims to show that treatment x (the generic drug) is no worse than treatment y (the brand name drug). This creates somewhat less of an ethical problem, but potentially more of a cost problem. Even though non-inferiority trials generally require a smaller sample size than standard of care-controlled superiority trials, they usually require a significantly LARGER sample size than placebo-controlled trials. In practical terms, this means more patients are needed for the trial, which translates in to more expensive clinical trials, leading to price increases for patients. I agree with Ethan that generic companies faced with excessive periods of data exclusivity protection may in fact opt to preform these trials. However such trials would be very costly, and in the case of small molecule drugs would still be unethical because they would require the use of large numbers of human subjects and research funding to answer the completely idiotic question of whether one drug will have the same effect as the EXACT SAME DRUG. 

Question - is it the EXACT SAME DRUG?

Thank you Sara and others for outlining this discussion regarding patented and generic drugs. This is an entirely new topic area for me so I'm learning a great deal. I do have a question about what you've posted here regarding generic companies relicating clinical trials.

Given the points that you raised earlier in your post  Addressing trade secret protections, you stated, Over the course of the recent debate over generic biologics, BIO has worked very hard to argue that for biological drugs the process = product, meaning that it is impossible for generic companies to replicate a product without having access to (trade secret protected) manufacturing process information.

Doesn't this mean that the generic version of a drug is bound to be somewhat different that the original because the manufacturer of the generic does not have the access they need to truly replicate the product?

And, if this is truly the case, the actual effectiveness of a drug may well be different - and perhaps even better - than the original product. But how would the consumers of the drug know this, be able to make not only a choice but know how a drug might interact for people with different kinds of characteristics?

When is a generic exactly the same?

This is a very important question to be clear on, and it is not completely straightforward. 

The short answer is for small molecule drugs, a generic version IS exactly the same as the brand name drug, but for biologic drugs the generic version is NOT exactly the same.  This is, in fact, why in the debate over 'generic' biologics, they are referred to not as generics, but as biosimilars (the idea being that they are highly similar, but not identical, and therefore cannot technically be called 'generic).  In the last part of my post above discussing generics and data exclusivity, I was specifically referring to small molecule drugs, and so in that context it is true that they are EXACTLY the same.

So why is this the case, and what are the implications of this?  Small molecule drugs are chemical compounds that are synthesized by a chemist in a lab through a process that does not involve any living organisms.  Biologics are very large molecules (proteins, antibodies, etc) that are impossible to synthesize chemically in a lab, and must be produced using living organisms (ie: in cells).  Because we have 100% control over the process of synthesizing small molecule drugs, and because the molecules are small enough that it is relatively easy to completely characterize their structure, we are able to say with surety that two small molecules are exactly the same.  In addition, it is possible to reverse engineer small molecules because no matter how you get from Point A to Point B, the end product will be the same.

In the case of biologics, we do not have 100% control over all the details of how the cell produces the drug.  In addition, biologics are larger and much more structurally complex than small molecule drugs (think airplane vs. bicycle...), and we do not currently have the tools to confidently characterize their precise structure.  In the case of biologics, they are not as simple to reverse engineer because the only way of being confident that two biologics are exactly the same is to have a production process that is exactly the same (hence the product = process arguement). 

What this means is that in the case of small molecule generics, it is completely nonsensical to repeat clinical trials.  In the case of biologic 'generics', it will likely be necessary to repeat clinical trials to at least some extent to show that the two drugs have the same effects in patients.  The extent to which this is necessary is currently the topic of a great deal of debate as the FDA is currently in the process of implementing the first ever approval pathway for 'generic' biologics (Hatch-Waxman only applied to small molecule drugs). 



Vaccines are biologics

I just wanted to add to my last post a mention of the fact that the vast majority of vaccines are biologics.  This has implications for IP strategies to reduce prices of new vaccines because it is not possible to produce 'generic' vaccines in the same way that it is possible to produce generic HIV drugs, and strategies such as compulsory licensing that solely address patents are insufficient.  I wrote more on this in a previous post:

IP barriers not just patents

Sara, Just to be clear on the


Just to be clear on the idea of "biosimilars" - you mentioned that clinical trials have to be done on these because the producer has not used the exact same sequence of events to create this medicine (b/c that info is protected), correct?  Given that clinical trials cost a lot - and it's not nearly as easy as creating a true generic (of a small molecule drug), where will the incentive come for an entity to produce this "biosimilar", go through the clinical trials to ensure it's safety, and then release it into a third world country that really needs it, all while collecting almost no money for it?  This appears to be a barrier in itself.  Where would the funding come to at least pay for the clinical trials that are required?



Business model for biosimilars?

Hi Amanda,

You hit the point exactly.  It has been pretty widely recognized that biosimilars are going to be significantly more expensive than traditional small molecule generics, and the fact that generic companies will have to preform some amount of clinical trials is a major reason for this.  The FDA has yet to come out with guidances on the what extent additional clinical trials will be necessary for biologics, and it is likely to very widely depending on the particular biologic in question.  In talking to biosimilars companies, it appears that the extent of required additional clinical trials will be a key variable in their calculation of whether biosimilars constitute a viable business model. The issue of getting biosimilars to developing countries I believe is going to becoming increasingly important (particularly given that many important cancer treatments are biologics, and an increasing amount of the worldwide cancer burden is now carried by developing countries...), however I think we are a long way from a model where this is realistic. 

We recenty testified at a FDA hearing that elicited input on the issue of clinical trials and a number of other, issues from stakeholders in the biosimilars game.  Below are some excerpts from our testimony:

"We hope to see the eventual development of a robust biosimilars industry that benefits both patients and the healthcare system at large by decreasing costs and broadening access to medicines.  We do not, however, believe that the current legislation provides an effective path to achieving this. The small molecule generics industry has been incredibly effective at expanding access to medicines and reducing costs.  This has resulted in savings of hundreds of billions of dollars just within the last decade, without the disastrous effects on pharmaceutical innovation that were predicted when this pathway was initially being developed.  There are obviously a large number of major differences between small molecule generics and follow-on biologic products, and the development of a successful regulatory pathway cannot straightforwardly replicate the framework set out by the Hatch-Waxman Act.  To the extent possible, however, we should attempt to apply the broad principles that have been responsible for the great success of the small molecule generics in ways appropriate to the biosimilars industry.

 One of our major concerns is that the legislative framework set out in the Biologics Price Competition and Innovation Act has the potential to fail to create a strong bio‘generics’ industry, and will rather mainly result in the growth of a ‘biobetters’ industry.  While there is certainly value in making progressive improvements to existing treatments, this will not be highly effective in promoting either innovation or price competition. The problems with a system that mainly incentivizing biobetters are two-fold.  Firstly, if the structural incentives are such that follow-on biologics companies mainly opt to focus on a biobetters approach, this will not mimic true generic competition, and is unlikely to result in maximal, or maybe even significant, cost savings.  Secondly, this could decrease truly novel R&D for unmet medical needs in favor of the lower risk approach of making incremental improvements to existing medicines.

 A closely related issue is the problem of [evergreening]. The extensive 12-year period of data exclusivity in the current legislation is significant problem that, by itself, will act as a significant obstacle to biosimilar competition.  This problem is greatly magnified by the granting of additional 12-year periods of data exclusivity for modifications to the reference product.  This creates problems with regard to both affordability and innovation.  This could negatively effect the [market evaluation] of biosimilar manufacturers, making it even more difficult to predict the state of the market after the initial period of data exclusivity is over.  Such a prolonged period of data exclusivity applied to each incrementally altered version of the original reference product has the potential to result in biosimilar competition being perpetually relegated to older versions of the drug, for which there is a di­minished market.  Furthermore, while these extended data exclusivity periods are justified as necessary to ensure continuing innovation, we must ask what sort of innovation these additional periods of exclusivity will be incentivizing?  We believe that rather than maintaining a focus on higher risk research leading to significant breakthroughs for unmet clinical needs, it will incentivize lower-risk approaches of continuously making small incremental improvements to existing treatments.  [Many of the analyses that have been written recently on originator companies preparing to respond to the BPCI act focus on a biobetters approach].

Another variable important to the long-term success of the biosimilars industry is interchangeability.  There is no question that determination of interchangeability for biologics is substantially more complicated than for small molecule drugs.  Nevertheless, this has been an extremely important element in the success of the small molecule generics industry.  There is a long-standing precedent for establishing interchangeability on the basis of comparability, set by the ICH Q5E guidelines for assessing changes made to manufacturing processes of innovator biologics.   This standard has been used successfully and safely for years, without any requirements for switchability studies and without informing doctors that any change in the product has occurred.  As such, it is highly likely that many patients have inadvertently been switched back and forth between the pre- and post-manufacturing changes.

If the premise of interchangeability based on comparability is indeed sound, then it is unclear why biosimilars should require an entirely new category of data (eg: switchability studies), rather than simply more extensive comparability studies.  We believe that in the future it will be important to address the question of whether there is truly a scientific justification for requiring switchability studies in one instance but not the other, provided that biosimilars fall within the acceptable comparability range.  If the biosimilar product can be determined to be at least as similar to the innovator company’s original reference product as the innovator product is after a manufacturing change, why should it automatically be assumed that one is less safe than the other?  If switchability studies are in fact truly necessary to ensure patient safety under the premise that there is a chance that manufacturing process changes can result in product changes that cannot be fully assessed by comparability studies but can have unpredictable clinical effects, why does this logic not applicable to manufacturing process changes to innovator biologics as well? .....

These are only a small subset of the variables that will be important to creating a framework that incentivizes the development of truly innovative treatments while simultaneously creating generic-like competition for existing biologics. 

Our question moving forward is: Given that a major goal of the BPCI Act is to stimulate price competition, how will our responses to the issues posed today ensure patient safety while simultaneously creating a biosimilars industry that will result in real, significant cost savings?  Rather than creating an industry that generates a large number of different branded versions of the same drug, how can we facilitate an environment that will promote true innovation and more closely approximate the competition seen in the small molecule generic industry?

We believe that a key element of this process will to be the preservation of sufficient flexibility to rapidly integrate technological advances into the regulatory framework for biosimilars, which will hopefully lead to progressive decreases in the scope of clinical trials that are found to be necessary.  Not only will clinical studies that are not completely necessary in the context of the most up-to-date technologies increase drug costs, it is unethical to perform human subjects research if there is not a clear need for additional studies to ensure patient safety."










Very Helpful Distinction - Chemical vs Bio


This was a very helpful distinction to provide a basic understanding of the differences and why chemical generic drugs have in fact been effective in providing the EXACT same drug for such reduced costs.

Additional question:

Are biologics ever able to be exactly replicated due to the variance of the living organisms from which the biologics are made would vary from one "batch" to another? Would this mean that some clinical trials would always be necessary to show comparable impact for patients? OR does the product = process argument actually address this variable as well?


Biologics batch variation

You are exactly right to pick up on the fact that there is potential for batch to batch variation in drugs that are made by living organisms.  In the pharmaceutical manufacturing this is addressed is by having highly stringent regulations in place for the production of biologics, with the aim of keeping the production process as consistent as possible from batch to batch, the idea being that if the production processes are closely monitored to maintain consistency, the end products will be similarly consistent.  Obviously there is the potential for error here, particularly when you start talking about different manufacturing plants etc.  This is why, for example, vaccines have lot numbers, so that if there is some kind of adverse event, it can be clearly traced to a particular batch.

The key question really is whether a manufacturing process alteration will actually result in a clinically significant difference in safety or efficacy (many will not), and to what extent we are capable of predicting such differences by using our current tools to evaluate changes to the structure of the biologic.  Science has not yet provided a way to definitively resolve these issues, and it is currently a matter of great debate to what degree we are able to come to confident conclusions about the precicse structure of a biologic and the clinical relevance of possible structural alterations.  Predictably, the originator companies tend to be much more pessimistic about our current and future capabilities that generic companies.  The FDA's assessment of this issue will go a long way towards determining the extent of additional trials that will be necessary for biosimilars. 

(A quick side note here is that originator companies that make changes to the manufacturing process of one of their own biologic drugs must go through a process of evaluating the impact of the change on the product in order for the FDA to approve the change, but this process does NOT involve extensive clinical trials.  This issue is discussed in a bit more detail in our recent testimony to the FDA on biosimilars, which is included in one of my posts above).

An interesting article on the

An interesting article on the latest state of play from the market perspective globally with biologics, pharma influence and regulatory attempts to develop control.

"Because biosimilars aren't identical copies, "biotech and big pharma are looking to squash the movement by throwing bioequivalent issues and quality-control issues," says Mary Ann Crandall, an independent pharmaceutical analyst at research firm Kalorama Information. "I think that will continue to hinder things. These products are too much of a cash cow to just let generics come in and cannibalize it." "




Data exclusivity is clearly a

Data exclusivity is clearly a key issue, and has been in US bilateral trade agreements for years, and is currently a key issue in the all-important EU-India bilateral deal apparently nearing completion. One assumes India, as the biggest generics producer, would not agree to unfavorable terms on exclusivity but this may not be the case.

On patents, I think this article on patents choking stem cell research in the US is interesting. http://www.google.com/hostednews/afp/article/ALeqM5iPtBIarvPCd4E8rJt-BCu...

And I've long been interested in seeing good information about the real costs of R&D that is claimed to be so high as to warrant high prices.

Hi, and some reactions

Hi everybody!


Sorry for arriving late to the party. Last week was the first week of classes, and things got a bit crazy.


I have now caught up on the fascinating discussion. Some quick reactions, mostly in the form of questions:


[1] I want to push a bit more on human rights and medicines. I'm interested in hearing more about your collective views on what “essential” medicines people (in developed countries, developing, generally) have a right to have. I agree with some of the commentary above that introducing cost among the variables makes things complicated. (Among other reasons, since costs are different in different contexts – different countries, different time periods, depending on whether drugs are patented). But if costs are taken out of the equation, does that mean that people have a right to any drugs that clinicians say are effective? For free (or at marginal cost of production)? Is that financially sustainable? (Or are weaker claims that don't invoke rights to medicines but other principles more practically useful?)


[2] From a strategic perspective, I wonder if it is a good idea to tie calls for access to claims that “drug companies are doing well.” Why? They may not always be. Would this make calls for access less salient? I wonder if some of the advocates have thoughts on this?


[3] Sara and Ethan raise some important points about vaccines and bio being different. Some questions, that will reveal my ignorance I'm sure. Is it really possible for developing country manufacturers to learn about the technologies from training modules and documentation? My prior had been that there is a lot of tacit knowledge involved here, such that codified information is not really going to be enough to enable others to produce. I suppose this depends in part on how much experience the producers have. In the flu vaccine case, was there a lot of face-to-face interaction between those that had the know-how and those that needed it? The reason I raise these points is that know-how and tacit knowledge transfer are famously difficult to write contracts around, a characteristic which, if present in this context, could cause problems for a PMK pool. But I'm interested in hearing more.


[4] More on data exclusivity later. Agreed that this is where a lot of the interesting action is.





Vaccine tech transfer... hubs and pools?

Thanks for bringing up point 3, I think these are critical issues. 

Technology transfer to developing country manufacturers has been recognized as a potentially important strategy in a couple of prominent places:

In paragraph 66.2 of TRIPs: “Developed country Members shall provide incentives to enterprises and institutions in their territories for the purpose of promoting and encouraging technology transfer to least developed country Members in order to enable them to create a sound and viable technological base”.

It is also in WHA 61.15: “The sixty-first World Health Assembly […] requests the Director-General […] to collaborate with international partners and intergovernmental partners in order to provide technical support to expand the number of manufacturers, particularly in developing countries, that can meet the standards required to attain and maintain WHO-prequalification standards

Depending on the complexity of the particular vaccine manufacturing process and the cell lines used there is going to be a range of difficulty in technology transfer to developing country vaccine manufacturers (DCVMs).  I agree that often technology transfer will require a significant degree of cooperation and participation from the originator company in order to be effective, and, at the very least, access to their trade secret protected process information.  This type of tech transfer absolutely does occur between multinational pharma companies and DCVMs (for GSK’s summary position on this, see http://www.google.com/url?sa=t&source=web&cd=3&ved=0CC4QFjAC&url=http%3A%2F%2Fwww.gsk.com%2Fpolicies%2FTechnology-Transfer-Vaccines.pdf&rct=j&q=vaccine%20technology%20transfer&ei=xLNFTcDSK4Ss8Aas5oizAQ&usg=AFQjCNEGW6IxbX8fV3apatGVqEkxYuVMNA&cad=rja).  From the perspective of maximizing vaccine affordability and ensuring vaccine security, which requires the existence of multiple producers, it is terribly inefficient for this to happen between a technology holder and a single DCVM.  This is the idea behind the technology transfer hub.  I believe that with the participation of originator companies it would be possible to create a training program and documentation package held by the hub institution or PMK pool that could then be licensed to multiple DCVMs.  In addition, DCVMs are becoming increasingly sophisticated, and I do believe that there exists a strong base for uptake of new vaccine technologies.

The following are key things that I think need to be explored in order to evaluate the feasibility of moving forward with using tech transfer hubs or PMK pools to improve access to new vaccines:

1)    Develop incentives for originator firms to engage in technology transfer projects with hubs or pools that license the technologies to DCVMs.  Because they do engage in this kind of relationship with individual DCMVs already, the first step would be to look at the incentive structure that exist in these cases.

2)    Examine contracts that have been used in tech transfer agreements between pharma companies and DCVMs in the past, and look at how they would need to be adapted for licensing to a hub or pool

3)    Identify potential institutions with the capability (and willingness…) to be the host of the hub or pool.

TRIPS and technology transfer

I appreciate Sara's point about the importance of technology transfer. As she notes above, the obligation to incentivize technology transfer to the least-developed countries is contained in TRIPS, which is a legally binding international agreement, and is phrased in mandatory terms ("shall provide"). Although it would be challenging to say the least to "enforce" this kind of a promise, I think it could be an extremely effective focal point for activism. Least-developed countries gave up a lot in agreeing to TRIPS, and part of the bargain they received in return was this promise of technology transfer. This language might be helpful in organizing pressure to provide assistance that would counteract or balance the effects of strong global IP norms in many places.

Sara: Agreed that looking at

Sara: Agreed that looking at looking at existing contracts is a good thing. There is an old book by Farouk Contractor (!) called International Technology Licensing that talks about this, and also some more recent work by Ashish Arora. If one relied only on contracts, I think one common solution is to give the original technology holder a significant sales based royalty, to make provision of tacit knowledge (which is really hard to contract around, since the extent of effort is hard to observe/verify) incentive compatible. I'm not sure of pros and cons of this sort of thing in this context. Also some of the work on university licensing contracts encounters a similar issue, i.e. how to make cooperation by the inventor (who holds tacit knowledge) incentive compatible in context where this tacit knowledge is needed for successful commercialization.


Anyhow, I think all of this is very promising to explore. This is important not only in this context, but also for thinking about tech transfer obligations in TRIPS. My climate technology friends tell me that getting developed countries to fulfill these obligations there is extremely important, and has thus far been frustrating. To my knowledge there isn't much activism around these issues, and perhaps there should be more given their importance for various challenges in sustainable development. 

I also see the point about

I also see the point about examining licensing contracts as interesting for policymakers, and would encourage those with knowledge of these to get them in front of the WTO TRIPS Council or the WHO working group on R&D financing. I think making concrete suggestions like the ones above on how to encourage more meaningful transfer are very useful.

Some developing countries have raised questions about developed countries' compliance with TRIPS Art. 66.2 in recent years, but that obligation to help enable tech transfer is always said to have been met through a list of activities such as training. As a result, multilateral discussion on whether the developeds are fulfilling this obligation doesn't seem to get off the ground, but perhaps a better measure of whether the objective of Article 66.2 is being met might be how much and what quality technology has been transferred now 15 years into TRIPS. IQsensato in Geneva and Nairobi has looked into this a bit as have some of the developing country governments. 


pandemic flu acces and benefit sharing

And on vaccines, it will be interesting to see if the WHO working group is able to overcome deep differences on access and benefit sharing in cases of pandemics like influenza, in time for the May World Health Assembly. Governments are closer now than in recent years and have cause for hope, but there is plenty to undermine them. The basic fear remains if a developing country shares its virus strain with the global network, which leads to development of a treatment or vaccine, will someone from the developed world patent the outcome and then make the product available at higher prices than the developing world can afford - including the country that shared the unique virus strain to begin with. This has essentially happened in past so the fear is well-founded. The basic question is whether the working group, or the multilateral context generally, can bring about a fair and equitable regime for ensuring all parties get a fair share - and in fact that there are more shares to go around. As we know, in the recent H1N1 case, developed countries ended up with surplus treatments while smaller economies did not have enough for their populations. Industry has a solution, which is to receive more funding from governments in order to produce more vaccines. International organizations like the WHO appear to like that idea.

Along the same vein, the WHO R&D financing working group will look again this year at ways to finance development of drugs for diseases that predominately afflict poor populations, for which there is little market incentive. Here again, the tendency is toward supporting industry to do more of what it does so well, through massively funded PPPs. Whether the group assessing proposals will give a fair look at alternatives to that approach remains to be seen.

Then again, WHO is undergoing a soul-searching in the next biennium anyway due to funding problems, while groups like the Global Fund receive increasing amounts of support from northern economies that see more direct ability to control the use of those funds they give.

Coverage of all above here: http://www.ip-watch.org/weblog/category/venues/who/


Anticompetitive strategies of pharmaceutical companies

First of all I would like to apologize if I am to legal in my comment and if need be I will try to provide further clarification on the subject.

In my opinion another issue that greatly affects access to medicines and is a little bit overlooked by civil society are the anti competitive behaviour/strategies of pharmaceutical companies when they try to enforce a patent.

While IP law deliberately subjects intellectual assets to the exclusive control of right owners, competition law seeks to avoid market barriers and benefit consumers by encouraging competition among a multiplicity of suppliers of goods, services and technologies. Therefore it is crucial to ensure the right balance between competition and the protection of intellectual property rights. I believe civil society could very well help exercise this role in ensuring a proper balance.

As far as I know only a few NGO’s (Section 27 from South Africa - http://www.section27.org.za and KEI http://keionline.org/) have had experience in presenting complaints at the national competition authorities.

In Europe the discussion related to the interface between pharmaceutical patents and competition is advanced and deserves a special mention the Pharmaceutical Sector Inquiry led by the European Commission Competition Directorate General. The final Report is 29 pages long but the interesting part to read is the preliminary report that is pretty detailed, it has about 430 pages. The report points out distinct anti competitive strategies utilized by originator companies to delay or prevent entry of generic competitors such as patent life cycling, complaints at the national sanitary agencies (like FDA) questioning the safety and efficacy of the medicine, sham litigation (baseless litigation used to delay or create obstacles) trying to enforce a patent, pay to delay settlements etc.

Also recently the European Competition Authority is starting to monitor patent settlements that are on or off the courts to delay the entry of generic competitors in exchange for a large monetary sum (pay-to-delay). The US Federal Trade Commission also are monitoring these kind of agreements because as an agency staff study recently found, delaying the entry of generic drugs costs consumers billions of dollars a year, and one method in particular – pay-for-delay patent litigation settlements – costs consumers approximately $3.5 billion per year.

In Brazil the discussion related to the interface between pharmaceutical patents and competition is relatively recent but there have been progresses namely the ongoing development of a Brazilian Pharmaceutical Sector Inquiry and the ongoing investigation of at least 5 cases of sham litigation in the pharma sector. The only ruling against pharmaceutical companies pertinent to A2M issues was a decision of 2005 against several transnational pharmaceutical companies that got together to build a kind of a campaign (cartel) against the launch of generic versions of their medicines, saying that generics are of inferior quality that the ones they market. 

Since there are no international rules (with the exception of Article 40 of the TRIPS) that constrain the capacity of developing countries to create or follow their own approach to competition law and to discipline IP related anti-competitive behaviour I believe this is an important field to watch for. In the absence of international rules on the matter, countries may have different views about what constitutes undesirable anti-competitive effects as a result of the exclusivity granted under IPRs.

Therefore, I believe it is necessary to educate and build up human resources by the education of individuals, social movements and organizations that work in areas affected by the system of intellectual property to also learn to present complaints of anti competitive behaviour and put pressure in the governments to, if necessary, enact appropriate legislation.

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