[Ip-health] KEI and Public Citizen ask the NIH for safeguards in patent license for HCV drug

Thiru Balasubramaniam thiru at keionline.org
Tue Apr 14 07:41:11 PDT 2015


http://www.keionline.org/node/2202

KEI and Public Citizen ask the NIH for safeguards in patent license for HCV
drug

Submitted by James Love on 14. April 2015 - 7:24

The following attached letter [PDF
<http://keionline.org/sites/default/files/NIH_HCV_patent_KEI_PC_13April2015.pdf>],
from KEI and Public Citizen, asks the NIH to impose certain conditions on
an exclusive license on NIH owned patents for a new drug to treat the
hepatitis C virus (HCV). The NIH requires people to sign a non-disclosure
to know more about the deal. The KEI/Public Citizen submission, filed
yesterday with the NIH, asks the NIH to provide, at a minimum, four public
interest safeguards in the license. The first point proposes a clause to
ensure the product is not more expensive in the United States than in other
high income countries, and that the price is low enough the public and
private insurance companies provide reimbursement with low co-payments for
anyone who is HCV positive. The second point is to ensure that the license
does not block research on or with the NIH owned patented invention. The
third point is a proposal to enable the World Health Organization to
request a license if the license holder fails to adequately address an
important public health concern. The fourth point concerns transparency of
R&D outlays and product sales. A copy of the letter follows:

April 13, 2015

Kevin W. Chang, Ph.D.
Senior Licensing and Patenting Manager
NIH Office of Technology Transfer
6011 Executive Blvd, Suite 325
Rockville, MD 20852
Phone: (301) 435-5018
mailto:changke at mail.nih.gov <changke at mail.nih.gov>

Re: Prospective Grant of Exclusive License: Small Molecule Therapeutics
Against Hepatitis C Virus Infection: A Notice by the National Institutes of
Health on 03/27/2015. Document Citation: 80 FR 16389, Page: 16389 -16390 (2
pages), Document Number: 2015-06974, URL:
https://federalregister.gov/a/2015-06974

Dear Dr. Chang,

We are writing in regard to the Federal Register notice (the “Notice”)
concerning possible exclusive licenses for patents on the Prevention and
treatment of Hepatitis C Virus infection. [80 FR 16389-16390].

The United States and other countries are currently faced with extreme
hardships in paying for treatments for the hepatitis C virus (HCV), and in
the past, have also been confronted by barriers to innovation as a
consequence of restrictive licensing of HCV patents. Any license on
NIH-owned patents should include provisions that do the following:

   1. Ensure that the patented "invention is being utilized and that its
   benefits are to the extent permitted by law or Government regulations
   available to the public on reasonable terms" [See: 35 USC 201(f)],
   including specifically for prices that are reasonable. In evaluating the
   reasonableness of the price, we suggest that the following conditions
   apply, as separate tests:
      1. The price should be no higher than the unweighted average price in
      other countries that are economically similar and competitive with the
      United States in world markets, such as Canada, Australia,
France, the UK,
      Germany and Japan. This would be a test to ensure the US does
not pay more
      for its own NIH funded inventions, making the US less
competitive in global
      markets.
      2. The prices should be low enough that reimbursement bodies, both
      public and private, provide reimbursement for all HCV patients,
regardless
      of the severity of the liver damage, with low co-payments.
   2. Enable research. The NIH should ensure that third parties may conduct
   research on or with the invention, royalty free and without permission.
   3. The license should provide that under 35 USC 202(c)(4), the World
   Health Organization (WHO) may request from the NIH a license to practice or
   have practiced on its behalf, the patented invention, subject to the
   following procedures:
   1. The WHO can identify an important public health concern that is not
      being met by the holder of the license to the NIH owned invention,
      including but not limited to the goal of access to medicine for all;
      2. The WHO can explain the steps it has taken to address the issues,
      including attempts to negotiate voluntary licenses from the holder of the
      license to the NIH owned invention; and
      3. The WHO can explain how its proposed use and licensing of the
      invention will address the unmet health need, without unreasonably
      prejudicing the legitimate interests of the license holder, taking into
      account the legitimate interests of third parties and the goal
of access to
      medicine for all.
   4. Transparency. The NIH should require the license holder to provide
   the NIH with reports that detail its R&D outlays on the drug, including the
   costs of each clinical trial, with overhead as a separate line item. The
   NIH should require the license holder to provide the NIH with reports on
   annual sales, as measured by both units and revenues, by country, and
   within the United States, by major type of reimbursement body and
   government agency.

In our opinion, each of the requested provisions in the contract are not
only reasonable, but very modest in terms of ambition, and respond to
obvious concerns about the license involving patents on HCV treatments.

We could request that an NIH funded invention be less expensive in the
United States than elsewhere, or limited to some multiple of actual
investments, adjusted for risks, or suggest any number of other public
interest safeguards that would be justified by the public’s funding of the
invention. The points listed above are not only reasonable licensing terms,
they should be looked at as minimal terms for the grant of exclusive rights
on an NIH owned invention, assuming the NIH is operating with the interests
of the public in mind.

(KEI and Public Citizen agree that the contents of this letter are fully
available to the public under FOIA.)

Sincerely,

James Packard Love
Director
Knowledge Ecology International
1621 Connecticut Avenue, Suite 500
Washington, DC 20009
james.love at keionline.org
http://keionline.org/jamie

Robert Weissman
President
Public Citizen
1600 20th Street NW
Washington, DC 20009

Andrew S. Goldman, Esq.
Counsel, Policy & Legal Affairs
Knowledge Ecology International
1621 Connecticut Avenue, Suite 500
Washington, DC 20009
1600 20th Street NW
andrew.goldman at keionline.org

Peter Maybarduk
Global Access to Medicines Program Director
Public Citizen
Washington, DC 20009
pmaybarduk at citizen.org
ANNEX

The statutory legal basis for our comments to this Notice is found in 35
U.S.C. § 202(c)(4), which provides that every funding agreement with a
small business firm or nonprofit organization shall contain appropriate
provisions that effectuate the following:

With respect to any invention in which the contractor elects rights, the
Federal agency shall have a nonexclusive, nontransferrable, irrevocable,
paid-up license to practice or have practiced for or on behalf of the
United States any subject invention throughout the world: Provided, That
the funding agreement may provide for such additional rights, including the
right to assign or have assigned foreign patent rights in the subject
invention, as are determined by the agency as necessary for meeting the
obligations of the United States under any treaty, international agreement,
arrangement of cooperation, memorandum of understanding, or similar
arrangement, including military agreement relating to weapons development
and production. [Emphasis added.]

This statutory obligation is in turn implicated by several relevant
international agreements, including the World Health Assembly’s Global
Strategy and Plan of Action on Public Health, Innovation and Intellectual
Property (WHA61.21), and the 2001 Doha Declaration on TRIPS and Public
Health.
WHA61.21

In WHA61.21, the Sixty-First World Health Assembly put forth the Global
Strategy and Plan of Action on Public Health, Innovation and Intellectual
Property, with the aim of “promot[ing] new thinking on innovation and
access to medicines, as well as … provide a medium-term framework for
securing an enhanced and sustainable basis for needs driven essential
health research and development relevant to diseases which
disproportionately affect developing countries, proposing clear objectives
and priorities for R&D, and estimating funding needs in this area.” Among
the stated goals of the Global Strategy include, in paragraph 14(e),
“encourag[ing] and support[ing] the application and management of
intellectual property in a manner that . . . promotes access to medicines
for all…”

Various “elements” put forth in the annex of WHA61.21 are critical to the
Global Strategy’s implementation, including Element 2, on promoting
research and development; Element 4, on the transfer of technology; and
Element 5, on the application and management of intellectual property to
contribute to innovation and promote public health. These elements are to
be implemented through specific actions immediately relevant to this
Notice, including:

Section 2.4, calling for “the further development and dissemination of
publicly or donor-funded medical inventions and know-how through
appropriate licensing policies, including but not limited to open
licensing, that enhance access to innovations for development of products
of relevance to the public health needs of developing countries on
reasonable, affordable and non-discriminatory terms”;

Section 4.3, calling for the development of “new mechanisms to promote
transfer of and access to key health-related technologies … (b) to promote
transfer of and access to key health-related technologies of relevance to
public health needs of developing countries…”;

Section 5.1, calling for the “sharing of information and capacity building
in the application and management of intellectual property with respect to
health related innovation and the promotion of public health in developing
countries,” including, in subsection (a), “the application and management
of intellectual property in a manner that maximizes health-related
innovation and promotes access to health products...”

*Relevant Provisions from WHA61.21*

(2.4) Promoting greater access to knowledge and technology relevant to meet
public health needs of developing countries … (d) encourage the further
development and dissemination of publicly or donor-funded medical
inventions and know-how through appropriate licensing policies, including
but not limited to open licensing, that enhance access to innovations for
development of products of relevance to the public health needs of
developing countries on reasonable, affordable and non-discriminatory terms.

(4.3) developing possible new mechanisms to promote transfer of and access
to key health-related technologies (a) examine the feasibility of voluntary
patent pools of upstream and downstream technologies to promote innovation
of and access to health products and medical devices (b) explore and, if
feasible, develop possible new mechanisms to promote transfer of and access
to key health-related technologies of relevance to public health needs of
developing countries especially on Type II and III diseases and the
specific R&D needs of developing countries in respect of Type I diseases,
which are consistent with the provisions of the TRIPS agreement and
instruments related to that agreement, which provide flexibilities to take
measures to protect public health.

(5.1) supporting information sharing and capacity building in the
application and management of intellectual property with respect to health
related innovation and the promotion of public health in developing
countries (a) encourage and support the application and management of
intellectual property in a manner that maximizes health-related innovation
and promotes access to health products and that is consistent with the
provisions in the TRIPS agreement and other WTO instruments related to that
agreement and meets the specific R&D needs of developing countries (b)
promote and support, including through international cooperation, national
and regional institutions in their efforts to build and strengthen capacity
to manage and apply intellectual property in a manner oriented to public
health needs and priorities of developing countries (c) facilitate
widespread access to, and promote further development of, including, if
necessary, compiling, maintaining and updating, user-friendly global
databases which contain public information on the administrative status of
health-related patents, including supporting the existing efforts for
determining the patent status of health products, in order to strengthen
national capacities for analysis of the information contained in those
databases, and improve the quality of patents. (d) stimulate collaboration
among pertinent national institutions and relevant government departments,
as well as between national, regional and international institutions, in
order to promote information sharing relevant to public health needs (e)
strengthen education and training in the application and management of
intellectual property, from a public health perspective taking into account
the provisions contained in the Agreement on Trade-Related Aspects of
Intellectual Property Rights, including the flexibilities recognized by the
Doha Ministerial Declaration on the TRIPS Agreement and Public Health and
other WTO instruments related to the TRIPS agreement (f) facilitate, where
feasible and appropriate, possible access to traditional medicinal
knowledge information for use as prior art in examination of patents,
including, where appropriate, the inclusion of traditional medicinal
knowledge information in digital libraries (g) promote active and effective
participation of health representatives in intellectual property-related
negotiations, where appropriate, in order that such negotiations also
reflect public health needs (h) strengthen efforts to effectively
coordinate work relating to intellectual property and public health among
the Secretariats and governing bodies of relevant regional and
international organizations to facilitate dialogue and dissemination of
information to countries.
Doha Declaration on TRIPS and Public Health

Further obligations are imposed upon the United States Government via the
Doha Declaration on TRIPS and Public Health, which was designed to respond
to concerns about the implications of the TRIPS Agreement on global public
health issues and access to medicines.

The Doha Declaration states, in paragraph 4:

We agree that the TRIPS Agreement does not and should not prevent members
from taking measures to protect public health. Accordingly, while
reiterating our commitment to the TRIPS Agreement, we affirm that the
Agreement can and should be interpreted and implemented in a manner
supportive of WTO members' right to protect public health and, in
particular, to promote access to medicines for all.

In this connection, we reaffirm the right of WTO members to use, to the
full, the provisions in the TRIPS Agreement, which provide flexibility for
this purpose.



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