[Ip-health] Plenary speech by Ellen 't Hoen (UNITAID) at AIDS 2010 IAS Conference: 'A proposal for change: Managing patents to ensure access to AIDS medicines for all'

Thiru Balasubramaniam thiru at keionline.org
Fri Jul 23 02:08:51 PDT 2010

Presentation at the AIDS 2010 IAS Conference – 21 July 2010
'A proposal for change: Managing patents to ensure access to AIDS  
medicines for all'
By Ellen ‘t Hoen, Senior Advisor UNITAID Medicines Patent Pool

Ten years ago, the world prepared to gather in Durban, South Africa,  
for the first International AIDS Conference to be held on the  
continent most devastated by this terrible disease. At the time, the  
statistics were grim: only one in a thousand African people in need  
could get access to AIDS treatment, because the drugs were only  
available from originator companies who owned the patents on these  
medicines. They came with a paralysing price tag of US$10,000 to US 
$15,000 per patient per year.

Through an immense joint mobilization of people living with HIV/AIDS  
and their organisations, their doctors and nurses, civil society,  
dedicated ministries of health, donor governments, and pharmaceutical  
companies, we have achieved today what most delegates at Durban  
thought impossible: access to AIDS treatment for more than 4 million  
people in the developing world.

This achievement required some key essential ingredients: first of all  
the AIDS treatment movement that put the AIDS crisis on the political  
agenda, alongside courageous medical leaders willing to take risks,  
increased funding for HIV treatment, the availability of low-cost  

While the achievements so far are enormous, there are huge challenges  
that still need to be overcome to ensure that current and future unmet  
needs are met.

The last ten years have shown how we can have a tremendous impact on  
reducing illness and death in developing countries through ARV  
treatment. But in this current climate of wavering support for  
achieving universal access to treatment – a promise only 5 years old -  
we must look ahead to see how we can have an even greater impact by  
making treatment more affordable so that the millions of people still  
waiting for treatment can be brought onboard and those already on  
treatment are ensured a chance at long-term survival.

In line with scientific consensus, the latest WHO treatment guidelines  
recommend that people should start treatment earlier, before they  
become very ill and weak. This is a critical step toward bringing  
treatment for people in developing countries in line with treatment in  
wealthy nations, and is expected to help prevent transmission of the  
virus. However, it also means that 14 million people are now in urgent  
need of treatment. But of these 14 million people, only 4 million  
receive treatment, leaving a further ten million waiting empty-handed .

I have been asked by the IAS to address today how intellectual  
property – or IP – rules and practices relate to access to medicines.  
I will look at where we have been and what we have learned over the  
last decade, before focusing on ways to ensure affordable treatment is  
available to people in developing countries in the future.

The AIDS crisis and all its actors have caused a radical change in how  
we approach intellectual property in the field of medicine. This is  
reflected in legislative and policy changes, and changes in  
pharmaceutical companies’ business practices.

It started in 1996 when a group of health NGOs met in Bielefeld, a mid  
size, sleepy town in Germany – made famous by John le Carre’s The  
Constant Gardener – to discuss ‘Access to Medicines and the WTO GATT  

The TRIPS Agreement had just come into force. The TRIPS Agreement, an  
annex to the WTO rule book, was intended to encourage trade among its  
members. The TRIPS Agreement sets out minimum standards for IP  
protection and enforcement. The negotiations leading to the agreement  
had been primarily driven by the trade and commercial interests of  
powerful nations.  Public health was not their focus and civil society  
organisations had not been part of the process.

The new WTO rules globalised intellectual property standards that were  
the norm in highly industrialized Western countries, and made them  
enforceable through the WTO dispute settlement procedures. Before  
TRIPS, pharmaceutical patent policies and practices were diverse. For  
example, many countries did not consider patents on products such as  
medicines and food to be in the public interest and half of the  
countries actively excluded pharmaceutical (product) patenting  
altogether. This included a number of European countries such as Spain  
and Norway.

The WTO rules put an end to this when it required all member countries  
to introduce 20 year patents on medicines. As part of the WTO package,  
it was not possible for countries to opt out of TRIPS while becoming a  
member of the WTO, and the following years saw a wave of IP reforms in  
most developing countries to meet the requirements of the TRIPS  
Agreement. The policy space countries once enjoyed to design IP  
systems in line with their own development needs and priorities was  
rapidly shrinking.

In the late nineties, the potential effect of the changing IP rules on  
access to medicines was little understood, and interest in IP issues  
among the public health community was still rare.

A couple of things changed that:

In 1998, 39 drug companies and their representative body sued the new  
democratic South African government over amendments to its Medicines  
Act, which aimed to make low cost medicines more readily available.  
The companies asserted it was both unconstitutional and not compliant  
with the TRIPS Agreement.

This was done against the backdrop of the growing AIDS treatment  
crisis in the developing world at a time when HAART had become  
available in Western countries. HAART had shown that treatment could  
turn a disease with a certain death sentence into a chronic illness.

Big Pharma vs. Nelson Mandela provided shock therapy. It was a call to  
action that pulled many different actors onto the stage.
In 1999 at the UN in Geneva, a group of NGOs and AIDS activists held a  
conference titled ‘compulsory licensing of AIDS drugs.’ A compulsory  
license – or CL – is a way to overcome a patent barrier, whereby a  
government grants a license to an entity other than the patent holder,  
allowing them to produce the given product in exchange for “adequate  
remuneration”. It is allowed under the TRIPS Agreement under certain  
circumstances and has been used repeatedly in industrialized countries  
throughout history – including to purchase low cost medicines.

Today there is nothing revolutionary or newsworthy about holding  
meetings about compulsory licensing and access to medicines – this  
conference has seen a number of sessions related to the topic – but in  
1999 that was quite different. Discussing CLs were the exclusive  
domain of a subset of specialized IP lawyers. Here was a gathering of  
NGOs and health officials discussing how flexibilities in IP law could  
be used to increase the availability of low cost AIDS treatment in the  
developing world. This caused a great deal of concern among the patent  

Thailand and Brazil were the first developing countries with AIDS  
treatment programmes that embraced the notion of universal access.  
They both heavily relied on the ability to produce low cost medicines  
in government facilities, illustrating the enormous cost reductions  
that could be achieved. (e.g., Thai fluconazole for 0.29 USD vs. 11  
USD Guatemala negotiated price from originator, a 38-fold difference).  
But both countries experienced pressure from wealthy nations that were  
concerned that strategies to create alternative sources of low cost  
medicines would be detrimental to their pharmaceutical industries.

The growing discontent culminated at the WTO ministerial conference in  
Seattle in 1999 with a call to ‘humanize the trade agreements’ – the  
rallying cry of the NGOs campaigning for access to medicines - and  
allow measures such as compulsory licensing to accelerate the  
production and availability of low cost AIDS medicines without risk of  
trade retaliation. A strong coalition of NGOs and developing countries  
was forming. Some soothing statements on access to medicines were  
made, but this was primarily aimed at diverting more radical change.

At the time, an editorial in the Pharmaceutical Executive commented:  
“Unlikely as it seems, the pharmaceutical industry may have reason to  
thank the demonstrators who brought Seattle and the ministerial  
meeting of the World Trade Organization (WTO) to a standstill. Had the  
demonstrators not disrupted the gathering, the forecast for global  
pharma might be much cloudier (Gopal 2000).”

But those that thought that the collapse of the WTO talks in Seattle  
would mute the demands for change in IP rules were wrong.

The period between the failed Seattle WTO Ministerial conference in  
1999 and the 2001 WTO meeting in Doha saw a number of developments  
that had a profound effect on access to medicines and intellectual  

Both Brazil and Thailand began to experience the consequences of  
pharmaceutical patents on AIDS drugs. Patents significantly limited  
their ability to produce generics at much lower cost, resulting in a  
heavy burden on their public health budgets . In Brazil 3 (out of a  
total of 17 products) patented medicines ate up 75% of the AIDS  
programme’s drug budget.

In May 2000, five pharmaceutical companies had announced the  
Accelerating Access Initiative (AAI) to improve access to more  
affordable HIV-related medicines and diagnostics for developing  
countries and those hardest hit by the epidemic.

However, the voluntary price discounts offered through this initiative  
paled in comparison to the prices offered by the low cost generic  
producers. The generic producers were not yet hampered by patents, and  
so could also offer products in fixed dose combinations – or FDCs –  
that combined three medicines into one pill, which brought us  
‘Triomune’ a FDC that helped to ease treatment tremendously.

Generic production of ARVs in India was possible because the Indian  
Patents Act did not provide for patents for pharmaceutical products  
until it had to in 2005. In early 2001, the Indian generic medicines  
producer Cipla offered triple-therapy AIDS treatment for 350 USD per  
patient/year to NGOs and for 600 USD for governments of developing  
countries. Cipla’s dramatic price reduction, which received widespread  
media attention, hammered the message home that many of the  
multinational drug companies were abusing their monopolistic position  
in the face of a catastrophic human disaster and drew attention to the  
effects of generic market competition in bringing drug prices down.  
India quickly was becoming the ‘AIDS pharmacy of the developing world.’

The same year controversy had broken out over the cost of the drug  
stavudine (also known as d4T) which came to a head on the Yale  
University campus in March 2001. Stavudine was developed by  
researchers at Yale University, which held the patent on the drug. The  
price of the generic version of stavudine in South Africa was thirty- 
four times less than the price of the brand-name product, but the  
patent prevented its use in South Africa. Under pressure from  
researchers, students, and access advocates, Yale renegotiated its  
license with Bristol Myers Squibb to ensure the availability of  
generic versions of stavudine in developing countries.

In 2000, the G8 paid unprecedented attention to health and the need  
for action to increase access to medicines. In December of that year,  
a 3-day global summit in Okinawa on infectious diseases outlined an  
agenda to prevent the spread of AIDS, provide treatment and care for  
those affected, and to enhance R&D for international public goods,  
including new approaches to managing IP. Most importantly, the Okinawa  
summit was the birth place of the Global Fund.

Then, in April 2001 after a global and domestic public outcry under  
the leadership of the South African Treatment Action Campaign, the 39  
drug companies dropped their case against the South African  
government. The landscape had dramatically changed.

Access to medicines and the need to revisit the patent rules that  
govern them had become part of a larger political agenda and was no  
longer the exclusive domain of trade negotiators.

In November 2001, governments at the WTO Ministerial Conference – in  
an unprecedented move – adopted the Doha Declaration on TRIPS and  
Public Health. The Doha Declaration made clear that the TRIPS  
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.”

This represented the first significant push back to the relentless  
march to strengthen private IP rights without regard for societal  
consequences in poor countries.

In 2003, the WTO adopted the August 30th decision in an attempt to  
find a remedy for legal barriers to exporting sufficient amounts of  
medicines produced under a compulsory license, and to ensure that  
countries that rely on import for their medicines supply could benefit  
from CLs. While the solution that was adopted is deeply flawed, the  
TRIPS 31bis amendment is the sole amendment agreed since 1994 not only  
to TRIPS itself, but also to the full set of WTO agreements. It was  
public health considerations and especially the AIDS crisis that moved  

On 1 December 2003, WHO together with UNAIDS declared the lack of
HIV/AIDS treatment to be a global public health emergency and  
announced the 3by5 campaign.

The 500-word Doha Declaration on TRIPS and Public Health has been  
essential in making low cost medicines available on a large scale.  
While Thailand and Brazil’s compulsory licenses for ARVs in 2006 and  
2007 (and more recently in Ecuador) have been widely publicized, it is  
a little known fact that low and middle income countries have enabled  
procurement of low cost medicines on a large scale using the  
flexibilities contained in the Doha Declaration. Sixteen low and  
middle-income developing countries have issued compulsory licenses or  
government use licenses to gain access to generic ARVs. Twenty-eight  
out of 32 LDC WTO members authorized importation of generic ARVs with  
reference to paragraph 7 of the Doha declaration, which gave them the  
right to delay granting or enforcing of medicines patents until 2016.

When India became compliant with TRIPS in 2005, it incorporated public  
health safeguards in its Patents Act, introducing strict patentability  
criteria and the possibility for anyone to oppose the granting of  
patents. PLWHA and the Indian Lawyers Collective used these new  
flexibilities successfully to oppose patents on AIDS medicines that  
did not fulfill the patentability criteria India had adopted. A  
challenge to these provisions by one drug company (Novartis) – whose  
patent application for its cancer drug (Glivec) was rejected.

We have also seen companies responding to the challenges to their  
patents by agreeing to voluntary licenses to their patents, for  
example in South Africa as part of a settlement reached after people  
with AIDS and the Treatment Action Campaign had filed a successful  
complaint with the South African Competition Commission. Companies  
have also made voluntary licenses available in response to the threat  
of non voluntary measures such as CLs and patent grant oppositions.

The AIDS crisis has been an engine for change – not only in thinking  
about IP and Health -

but also in the way health care is delivered through task shifting;

in treatment literacy, which empowered PLWHA and made them central to  
their own treatments vs. systems controlled DOTs;

in increased political attention for health well beyond AIDS;

in the role of civil society in decision making in global health;

in the establishment of access strategies by the pharmaceutical  

in the establishment of the WHO Pre Qualification system which helped  
create the market for low cost generics;

and in bringing about new financing mechanisms such as the Global  
Fund, PEPFAR and UNITAID whose beneficiaries go beyond AIDS. The AIDS  
crisis is also fuelling the Robin Hood tax movement.

Market competition for the early generation of generic ARVs resulted  
in prices per patient per year dropping by 99% over the past decade.  
Drugs that used to cost $10,000 per year are now widely available for  
$67 per year.

So, what is the problem?

First, the cost of treatment is increasing again because new AIDS  
medicines are likely to be patented in developing countries and thus  
more expensive. Even in India, the new ARVs are likely to be  
patentable. Without production sources, the countries that rely on  
importation will find it hard to source low cost medicines. New FDCs  
will not be available automatically because of patents on the  
individual compounds.

Second, increasing numbers of people will need access to new  
generation treatments. These treatments in general are more widely  
patented and more expensive.

Third, we still need to expand access to first line medicines to  
people that do not benefit from them today. For example, the prices of  
HIV treatment even in some of the Eastern European countries are out  
of reach of the people who need them.

The current licensing practices of the patent-holding companies are  
too scattered and come with limitations that hamper the full effect of  
generic competition and the ability to develop FDCs.

Fourth, we need to be able to respond to new scientific knowledge and  
evidence; we need to find ways of making key products affordable and  
available on a wide scale. For example, we need to replace older  
treatments that have significant side effects with the newer, less- 
toxic medicines that are now recommended by the WHO. But the cost of  
doing so is a barrier.

Fifth, we are faced with a serious financial crisis that risks setting  
back the treatment achievements of the last 10 years.

At the same time we see provisions in bilateral or regional Free Trade  
Agreements that try to limit flexibilities in patent law well beyond  
what is required by the WTO.

In July 2009, the UK all Party Parliamentary Group on AIDS called this  
situation the ‘Treatment Timebomb’ and called for “political activism”  
to “ensure that the next generation of drugs is available to the  
world’s poorest in future”

We need to go further than where we are today. We need expanded use of  
the existing flexibilities in patent law and new models to address the  
second wave of the access crisis, because, without generic  
competition, prices for newer drugs will not come down the same way  
they did for the first generation of medicines.

UNITAID is a new financing mechanism based on a small solidarity tax  
on airline tickets supported by 29 countries, the Bill and Melinda  
Gates Foundation, NGOs, and communities. Our mission is to increase  
access to treatments for AIDS, TB and malaria by making markets work  
better for health. UNITAID has raised 1 billion US$. It is innovative  
in the way it raises money, and also in how it is spent.

UNITAID, together with its implementing partner, the Clinton Health  
Access Initiative, created the market for pediatric fixed-dose  
combination ARVs, representing more than 99% of the market for these  
products in 2008 and 2009. These purchase arrangements also resulted  
in a two-thirds price-reduction for pediatric ARVs, allowing many more  
children to be treated with more acceptable formulations.

UNITAID stimulated the development of nine new second-line ARV  
formulations since 2007 and contributed to price reductions of up to  
43% for some 2nd line ARVs.

UNITAID's support of the WHO Prequalification of Medicines Programme  
ensures that medicines purchased with donor funds are of assured  
quality. A total of 28 medicines have been WHO Prequalified since  
early 2007.

It is UNITAID's overarching principle to make markets work for health  
that made it a natural birthplace for the Medicines Patent Pool  
Initiative, which will go live in the weeks to come.

The idea for an AIDS Medicines Patent Pool was first launched at the  
2002 AIDS conference in Barcelona by James Love from Knowledge Ecology  
International. He had studied the US airplane patent pool which was  
established in 1917 by the US government to overcome the patent  
barriers to the mass production of airplanes needed for the military.  
He suggested doing the same for AIDS drugs patents.

The patent pool is a response to the changed IP environment in which  
medicines are being more widely patented in developing countries. It  
is built on the proven way of bringing prices down, namely competition  
in the market. But we can only have robust competition if licenses are  

This is how the Pool will work:

Patent holders make licenses available through the patent pool that  
will allow others to produce low cost generic versions of patented  
ARVs for developing countries. Generic companies will also be able to  
make and sell FDCs and develop adapted formulations e.g., for the  
treatment of children.

Those who take licenses from the pool will pay royalties on their  
sales to the patent holders. The Patent Pool will be a systematic and  
predictable way of making voluntary licenses available, which offers  
legal certainty to all involved.

It can function within the existing IP framework. No change in  
international or national law is required – what is required is a  
change in mindset from the patent holders without whose collaboration  
this initiative cannot succeed.

Voluntary is the key word here, which means that the Patent Pool will  
only work if the patent holders are willing to collaborate with the  
patent pool and make their IP available. The good news is that some  
have shown a keen interest and see the potential of the Pool. Others  
have told us this week that they already think they do enough. I  

One warning: sorting out IP difficulties cannot be a proxy for  
financing. They have to go hand in hand. Without an assured market for  
even the lowest cost medicines, we cannot expect that anyone will be  
ready to develop and produce these products. We have a model that can  
work to address IP barriers to improved and scaled up treatment, but  
assured adequate funding remains a prerequisite.

The fight for access to medicines has been and will be a continuous  
fight, sometimes an uphill battle, and not always easy to win. But the  
lessons of the past ten years show what can be achieved if we mobilize.

We are at a crucial point in time - not only do we need to protect  
what has been achieved, we also need to be ambitious and go further.  
It is feasible that with better adapted, more affordable ARVs, we can  
double or triple the number of people on treatment without doubling or  
tripling the cost. We can also ensure that people have access to  
better and better-tolerated treatment.

I remember sitting next to Fred from Malawi, a village farmer living  
with HIV/AIDS who had left his village for the first time to come to  
the AIDS conference in Barcelona in 2002. We were listening to a  
presentation by an economist on the ‘cost effectiveness of ARV  
treatment’. It had lots of graphs and was hard to follow but at some  
point Fred leaned over and asked me: ‘Are these people saying it costs  
too much to keep me alive?” I will never forget that moment. That was  
indeed what was being said.

I would like to be able to say 'luckily those days are over, never to  

Cost considerations simply cannot be a ground for withholding  
lifesaving treatments from people. Access to lifesaving treatment is a  
fundamental human right. This puts the obligation on all of us to do  
all we can to make sure that it happens Right Here, Right Now.


Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)
thiru at keionline.org

Tel: +41 22 791 6727
Mobile: +41 76 508 0997

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