[Ip-health] IPN's Empty Patent Pool Article Empty of Facts

Baker, Brook b.baker at neu.edu
Sun Jul 11 10:18:30 PDT 2010

Alec Van Gelder and Philip Stevens of the International Policy Network have written a hatchet job about the UNITAID Patent Pool http://policynetwork.net/health/publication/what-purpose-unitaid%E2%80%99s-patent-pool at the behest of their Big Pharma supporters.  Although I have no interest whatsoever in entering into a pseudo policy debate with these Pharma reps or in lending any credence to their factually empty critique of the Patent Pool, I think it is in the interest of access-to-medicine that there be a public critique of their rant.  In sum, this article is one of the worst of right-wing, think-tank nonsense.

First, they argue that investment in HIV R&D is wasteful given the global burden of disease and the relative priority of HIV research that already exists.  They ignore that HIV is the leading cause of mortality of women of child-bearing age in developing countries, that it is a leading cause of child mortality, and that HIV has particularly devasting impacts, especially in Africa, because its burden is borne by the "middle-generation" that is so important in terms of parenthood, economic activity, and support for elders.

Second, they misstate the "business case" for the patent pool, suggesting that it's only rationale is incentivize creation of fixed-dose combinations even though the Patent Pool has made it abundantly clear that it hopes to lower unit costs by incentivizing robust generic competition and that it seeks to incentivize new formulations, including pediatric formulations and heat-stable formulations, as well as new fixed-dose combinations.

Third, they suggest that Indian generic are free to and are making multiple fixed-dose combinations, thereby ignoring evidence that the newest ARVs are patent protected in India and that many important FDC ARVs are not yet being produced.  Because Indian generics are making 44 combinations of medicines that are older and unpatented in India, they make the illogical leap that there is no problem on the ground for any ARV combination.

Fourth, they suggest that voluntary licensing is saving the day, ignoring evidence that most proprietary companies are not creating licenses at all (e.g., Abbott) and/or that allow sale in all the countries potentially covered by the patent pool.

Fifth, they suggest that discount pricing will save the day even though it is not available for all ARVs nor for all lower and middle-income countries.  Even when discount pricing is available, brandname, price-discounted medicines are typically 200-700% more expensive than bioequivalent generic mediicnes produced more cheaply in India.  Moreover, discount/tiered prices are ordinarily significantly higher in middle-income countries than low-income countries.  Erroneously, the authors also state that a patent pool when prevent companies from setting prices everywhere.  This is obviously poppycock since Big Pharma will continue to enforce its patent monopolies in non-Patent-Pool territories - the rich country markets where they make the vast majority of their sales.

Sixth, they exaggerate that patent pool medicines will be sold at no-profit when in fact generics must earn a modest profit both to recoup their investments in bringing a medicine to market and getting it registered and to pay for follow-on innovations for improved formulations.

Seventh, they bring out the old chestnut that it is primarily infrastructure and health worker shortages that impede acess to medicines.  Apparently, the fact that there are multiple problems causes them to think that a big problem like supra-competitive prices falls off the table.

Eighth, they argue that R&D will sqelched because patent holders will have no incentives to innovate new AIDS medicines, thereby ignoring that there is an important market for ARVs in developed countries with current sales in rich countries excess of $10 billion/year and heading toward $14 billion/year in a few years.

Ninth, they argue that voluntary licensing in the patent pool is a foot-in-the-door for compulsory licensing despite the fact that UNITAID has been exquisitely clear that it will not seek compulsory licenses.

Finally, they even take a pot-shot as prizes, even though prizes are not yet an accepted modality for the Patent Pool Foundation.  Moreover, they grossly exaggerate the difficulties of establishing prizes and misrepresent that prizes could only be given for patentable innovations instead of for useful incremental improvements.

Ten errors of logic and fact are about par for Pharma's think-tank apologists.

Professor Brook K. Baker
Health GAP (Global Access Project) &
Northeastern U. School of Law, Program on Human Rights and the Global Economy
400 Huntington Ave.
Boston, MA 02115 USA
(w) 617-373-3217
(c) 617-259-0760
(f) 617-373-5056
b.baker at neu.edu

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