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July 18, 2011
Gilead Sciences Joins the Medicines Patent Pool
    by Robert Kropp

Gilead becomes the first pharmaceutical company to form a licensing agreement with the Pool, and will provide its HIV and Hepatitis B drugs at low cost to developing countries.


The Medicines Patent Pool was created by UNITAID in December 2009, to increase access to drugs for the tens of millions of people afflicted with HIV/AIDS in developing countries. Last week, the organization, which became a separate entity in November 2010, announced its first licensing agreement, with Gilead Sciences, to improve access to HIV and Hepatitis B treatment in developing countries.

The agreement with Gilead provides for the supply of HIV drugs to up to 111 countries. Royalties for Gilead are set at three to five percent of generic sales, and royalties for any new pediatric formulations will be waived by the company.

Ellen 't Hoen, executive director of the Medicines Patent Pool, stated, "Today marks a milestone in managing patents for public health. The license agreement with Gilead Sciences will help make medicines available at a lower-cost and in easier to use formulations without delays."

"People in developing countries often have to wait for years before they can access new health technologies," 't Hoen continued. "Today's agreement changed that."

Members of the Interfaith Center on Corporate Responsibility (ICCR) has been engaging with pharmaceutical companies to improve access to medicines for years. In response to Gilead's licensing agreement with Medicines Patent Pool, Rev. David Schilling, the director of human rights for ICCR, said, "When companies recognize access to affordable life-saving medicines as a basic human right they also acknowledge their responsibility to make whatever adjustments are necessary to their business models to protect this right. Joining the Medicines Patent Pool is a crucial step in that direction."

Schilling told SocialFunds.com, "ICCR held a roundtable of pharmaceutical companies, nongovernmental organizations, and investors earlier this year, and that was critically important." In one panel discussion, Schilling said, 't Hoen discussed the Medicines Patent Pool's goals for improving access to HIV medicine in developing countries.

Following the roundtable, ICCR issued a summary report which stated, "Investors believe that companies that engage all aspects of their business model to respond to the global public health crisis will be better positioned for future growth. It is expected that pharmaceutical companies will thoroughly examine and take advantage of the opportunities to provide people in developing countries and emerging markets access to the medicines they need in the most cost-effective way. Investors believe a key innovation with the potential to increase access to medicines is the Medicines Patent Pool."

Judy Byron of the Northwest Coalition for Responsible Investment (NWCRI), an ICCR member, has been engaging with pharmaceutical companies on access to medicine since 1998. She told SocialFunds.com, "ICCR members were the first to engage pharmaceutical companies on HIV/AIDS." In recent years, she continued, "I've seen a move from filing resolutions to having serious dialogues with companies."

"ICCR started addressing pharmaceuticals on the HIV pandemic in Africa in 2001, asking them how they were going to give access to medicines to 40 million people living with HIV/AIDS at the time," Byron said. "In 2004, our coalition wrote to Gilead and did not get a response, so we filed a resolution and got over 30% of the vote. After a resolution filed the next year also got over 30% of the vote, we met with Gilead, and in 2005 they issued their first generic license for two of their AIDS drugs to be distributed in 95 resource-limited countries and Africa. Since then Gilead has established over a dozen partnerships with Indian generic companies, and they created a tiered pricing system based on income."

"Right from the beginning, a stumbling block has been patents on these drugs," Byron continued. "We have ongoing dialogues with all the companies, and when the idea of the Medicines Patent Pool came up we brought it to them. We've been very involved in lobbying for the Patent Pool and getting it started."

One of the most important features of the agreements with pharmaceutical companies is the Medicines Patent Pool's insistence upon complete transparency, Byron noted. Stating in its Transparency Policy that it was established "to facilitate access to intellectual property in order to improve access to quality, safe and efficacious health products in low- and middle-income countries," the Pool stated further that it "will operate in a transparent manner, in recognition of the critical nature of the public health issues at stake and the widespread public interest in its work."

Gilead's agreement with the Pool is a critically important first step, Byron observed. However, "Other companies have critical HIV/AIDS drugs too, which would be important to put into the Patent Pool," she said. "Of the 6.6 million people receiving AIDS drugs in the developing world, 1.6 million are on Gilead medications. There are about 16 million with IV who should be on treatment but are not, and within the next five years those numbers are only going to increase."

"There are concerns over what countries will be eligible," Byron continued. "The agreement doesn't include middle-income countries, and that has been another stumbling block. Pharmaceutical companies are looking at middle-income countries as new sources of income, but in countries like Brazil there are segments of the population where there is great need."

While ICCR members have focused on access to medicine for HIV/AIDS, Byron told SocialFunds.com that they also engage with pharmaceutical companies on access to other drugs in low-income countries as well. "We've been asking pharmaceuticals to develop global access to health policies," she said, "and this spring Merck became the first to do that." As a result of Merck's agreement, ICCR members withdrew a shareowner resolution addressing the issue with the company.

In its Statement of Principles, Merck agreed to expand its low-cost manufacturing network through local and regional partnerships, use differential pricing frameworks that account for economic development and public health needs, and form partnerships with private, government, or non-profit resources and distribution channels.

"Merck also works with the GAVI Alliance to get their vaccines to the developing world as soon as they're produced," Byron said.

Since 2000, GAVI has committed $5.7 billion to immunizations for children in developing countries, and by the end of 2010 had supported the immunization of 288 million children and prevented over five million future deaths.

Following its agreement with Gilead, the Medicines Patent Pool announced that it has begun negotiations with Boehringer-Ingelheim and Bristol-Myers Squibb on licensing agreements for patents on HIV medicines. The Pool is also in negotiation with five other patent holders.

 

 
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