[Ip-health] KEI’s Initial Comments on the MPP/BMS license to patents and know-how for daclatasvir (DCV) | Knowledge Ecology International

Andrew S. Goldman andrew.goldman at keionline.org
Mon Nov 23 11:39:23 PST 2015


http://keionline.org/node/2373

Knowledge Ecology International Press Advisory

KEI’s Initial Comments on the MPP/BMS license to patents and know-how for
daclatasvir (DCV)

FOR IMMEDIATE RELEASE
November 23, 2015

FYI:  Contact: Andrew Goldman (andrew.goldman at keionline.org) or Zack
Struver (zack.struver at keionline.org)

Knowledge Ecology International (KEI) notes the successful conclusion of
negotiations between Bristol-Myers Squibb (BMS) and the Medicines Patent
Pool (MPP) for a royalty-free license and technology transfer agreement on
daclatasvir (DCV), an important new medicine for the treatment of the
hepatitis C virus (HCV), and offers comments on the agreement.

As a result of this license, at least 112 low- and middle-income countries
will have access to a drug that, in combination with sofosbuvir, is
pangenotypic, thus bypassing the need for expensive genotype testing, and
produces high cure rates in 12-week treatments.

The terms of the license are a bit dense, and may take some time to fully
understand. The impact of the license on patients living outside of the
licensed territory are the focus of some of our comments.  In our
preliminary read of the license, the issue of the know-how appears to
present barriers to exporting the product outside of the licensed
territory.  Sales outside of the licensed territory will depend on a
generic drug company being able to claim that they developed and made the
drug without the know-how provided by the technology transfer agreement.

(The agreements that make up the license are available here:
http://www.medicinespatentpool.org/current-licences/)

According to the agreement, BMS only holds patents in two of the licensed
countries, India and South Africa.  The license allows products to be made
and sold within a 112-country area, including 110 countries where there are
no patents.

The license also includes a license to the know-how to make daclatasvir. In
the BMS license, a license to the know-how seems obligatory, and
consequential for countries outside of the license, although there is the
possibility of asserting that the product was developed without the
know-how provided by BMS.

We note that there would apparently be no breach of the agreement in a
scenario where a country inside or outside of the territory manufactures
for commercialization outside the territory, provided that the
commercialization "does not (i) infringe Licensed Patent Rights and
Non-Territory Patent Rights, " but also does not "(ii) rely on the Licensed
Manufacturing Know-How provided by BMS."

Significantly, the license defines "to infringe" as "infringement of a
patent in force, or any other activities that are prohibited under
applicable laws in relation to Licensed Patent Rights and Non-Territory
Patent Rights."  It is not clear what "any other activities . . in relation
to the LIcense Patent Rights" might include.

Section 2.8 is a key provision that describes situations in which exports
would be allowed under the license:

----------
2.8 Product Diversion
...
(c) For the avoidance of doubt, it would not be a breach of the Agreement
for the MPP or its Sublicensees to, Develop, seek regulatory approval for,
manufacture or use the Licensed Compounds and Licensed Product (in or
outside of the Territory) for Commercialization of such Licensed Compounds
or Licensed Product outside Territory where such Commercialization does not
(i) infringe Licensed Patent Rights and Non-Territory Patent Rights; and
(ii) rely on the Licensed Manufacturing Know-How provided by BMS. For the
purposes of this provision, "to infringe" will mean the infringement of a
patent in force, or any other activities that are prohibited under
applicable laws in relation to Licensed Patent Rights and Non-Territory
Patent Rights.
----------

If a company has to develop know-how twice, there will be an additional
expenditure of time to develop a generic version for countries outside of
the licensed territory.  According to MPP, this issue came up in an earlier
BMS/MPP license for the HIV drug atazanavir (ATV).   In that license, most
companies claimed they did not use the BMS provided know-how, and developed
their products based upon information in the public domain, or developed
separately from BMS.  This defense is allowed in this license in Section
10.1(b).

-------------

10.1 (b) Exceptions

. . .

The obligations under Section 10.1(a) will not apply with respect to any
portion of the Confidential Information that the receiving Party can show
by written evidence:

(i) is publicly disclosed by the disclosing Party, either before or after
it is disclosed to the receiving Party; or
(ii) was known to the receiving Party or any of its Affiliates, without any
obligations to keep it confidential or any restriction on its use, prior to
disclosure by the disclosing Party; or
(iii) is subsequently disclosed to the receiving Party or any of its
Affiliates by a Third Party lawfully in the possession thereof and without
any obligation to keep it confidential or any restriction on its use; or
(iv) is published by a Third Party or otherwise becomes publicly available,
either before or after it is disclosed to the receiving Party; or
(v) has been independently developed by employees or contractors of the
receiving Party or any of its Affiliates without the aid, application or
use of Confidential Information of the disclosing Party.
-------------

The MPP/BMS license for DCV does not include mandatory anti-diversion
measures, a subject of criticism from Médecins Sans Frontières (MSF) and
some other groups regarding the Gilead HCV license.

The generic drug companies who sign the license are not prevented from
engaging in patent challenges anywhere in the world.

James Love, Director of Knowledge Ecology International, said of the
BMS-MPP license:

"The new BMS/MPP license for daclatasvir will expand access to new
treatments for hepatitis C virus (HCV) for millions of people living in
low- and middle-income countries.  The terms of the royalty-free license
appear on balance to be pro-competitive and designed to benefit patients.
In several areas, BMS is setting an important precedent, including the
extensive transparency of the patent landscape for daclatasvir.

As always, KEI is concerned about the patients living in countries outside
of the licensed area, and that includes much of Latin America and the
Caribbean, several countries in the MIddle East, Eastern Europe and several
countries in Asia, as well as all high income countries.  We urge generic
manufacturers to develop and manufacture the drugs with their own know-how
under the flexibilities protected by Section 10.1(b) of the license, to
ensure that products manufactured in the licensed territories can be
exported to countries with no patents, or where compulsory licenses have
been granted.

Countries such as Egypt, Mexico, Chile, Argentina or Thailand that are
outside of the licensed territory can and should take measures to enable
the importation of generic versions of daclatasvir.  In countries outside
of the licensed territory where patents have been filed but not granted,
governments will have to either resolve the disputes over the patent
status, or grant compulsory licenses on patents filed but not granted, a
practice used in United States competition cases."


- 30 -
--
Andrew S. Goldman
Counsel, Policy and Legal Affairs
Knowledge Ecology International
andrew.goldman at keionline.org // www.twitter.com/ASG_KEI
tel.: +1.202.332.2670
www.keionline.org



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