[Ip-health] Proposed HIV Medicines Alliance - Promise or Peril

Baker, Brook b.baker at neu.edu
Sat Jul 7 13:43:14 PDT 2012

Proposed HIV Medicines Alliance - Promise or Peril
Professor Brook K. Baker, Health GAP
July 7, 2012


Behind the scenes, a core team of HIV/AIDS leaders, multilaterals, and pharmaceutical company executives have been floating the idea of a proposed HIV Medicines Alliance:  A Research & Development collaboration to optimize antiretroviral therapy [HIV Medicines Alliance].  In addition to preliminary discussions among early proponents, there have now been limited stakeholder consultations in London and India focusing primarily on innovator and generic pharmaceutical industry participants, but also including stakeholders from WHO, UNAIDS, UNITAID, OGAC, DFID, the Clinton Health Action Initiative, academics, implementers, and civil society advocates.  A report of the 2-3 May Stakeholder consultation, notes from a 14 June teleconference with advocates, and two drafts of a proposed Charter have been released.  Notes from June 20-22 meetings in india are pending.

The primary goal of the HIV Medicines Alliance outlined in its early documents is to deliver on UNAIDS' Treatment 2.0 strategy by supporting optimization of ARV regimens to help improve outcomes and scale-up access to prevention, treatment, and diagnostic commodities, with the main focus being on ARVs.  The HIV Medicines Alliance states that it will focus on R&D to secure stratified, simplified ARVs for 1st, 2nd and 3rd line treatments, and to address neglected aspects of current ARV therapy such as optimal therapy for women of childbearing age, child/infants, people co-infected with TB and hepatitis, etc.  The Alliance states that its primary goal is R&D, rather than licensing and that it is not a voluntary licensing initiative; but, as discussed further below, critical features of future licensing arrangement are discussed, many of which are deeply problematic.

Treatment 2.0 has identified the importance of optimization, simplification and standardization of ARV treatment options with a focus on developing treatment regimens that are:  simpler, lower-dose, and easier to use (e.g., once a day, fixed-dose combinations); efficacious (effective in stopping viral replication); less toxic (fewer and less severe side effects); more durable (high resistance barriers); and sequenced on the basis of no overlapping resistance profiles, thereby ensuring virological suppression in successive treatments.  Standardization of regimens will improve speed and cost of registration, forecasting, procurement and supply, training of clinicians, patient adherence, achievement of economies-of-scale, and ultimately cost/affordability.

To achieve these important goals and to speed resulting therapies to the tens of millions needing treatment in future years, both for their own clinical benefit and for ancillary prevention benefits, some degree of coordination and collaboration among pharmaceutical companies on ARV research and development may well be important. However, there are devils in the details and the proposed Alliance Charter reveals equal measures of promise and peril both with respect to the process and the substance the Alliance.

Process Concerns:  Big Pharma's Role and Early Lack of Transparency

Three of the main movers behind the HIV Medicines Alliance are Peter Piot, Mark Dybul, and Joy Phumaphi, with key involvement as well from UNAIDS (Bernharad Schwartlander/Tim Martineau) and WHO (Gottfriend Hirnschall).  Two innovator companies that are boycotting formal licensing discussions with the Medicines Patent Pool, Janssen/J&J (Paul Stoffels/Will Stephens) and Merck (Mark Feinberg), are also heavily involved [more on this later]. Representatives from the Wellcome Trust are facilitating early thinking and development of the proposal.

Every initiative has to have a start and multi-stakeholder collaborations are de rigor in HIV, but special care always has to be exercised when trying to balance the proprietary interests of for-profits companies - in this case both innovator and generic pharmaceuticals - and the ultimate interests of patients and payers.  Since most late-stage antiretroviral R&D is still being done by Big Pharma innovator companies, they obviously need to be brought to the table, but the question is whether they should be at the head of the table and how much their interests should drive the agenda.  It is important to remember that innovator companies have lucrative HIV markets in rich countries and deep market aspirations in so-called pharmemerging middle-income markets, where rates of growth in sales far exceed rates in Europe and North America.  As profit maximizing companies, these companies tend to prioritize proprietary interests even when they engage in more in more charitable/humanitarian activities.  For example, a company like Merck has a deep financial interest in moving its integrase inhibitor from third-line to second-line status.  The June 24 revised draft Charter discusses needing to manage conflicts of interest and gives lip service to norm-setting and treatment guidelines/standardization being done by WHO, but the risks of self-interest lobbying remain, especially where HIV Medicines Initiative decisions will have external effects in high- and middle-income markets.

In addition to conflict-of-interest process concerns, there are also transparency concerns with respect to the initial determination to make fundamental decisions about geographical scope and other important innovation and access decisions without the involvement of all stakeholders.  Whoever drafts first ordinarily codifies the basic architecture of agreements as well as key terms.  Proponents of the Alliance argue that it was necessary to engage with the key pharmaceutical players first to get their buy-in and to accommodate their most fundamental interests and goals, but this privileged involvement also means that Big Pharma's most fundamental goals go unchallenged and become calcified in basic frameworks.  It is not too late to seek PWA input and input from implementers, clinicians, and others advocates, North and South, but stakeholder engagement needs to be undertaken on much more rigorous terms other than a mere right of comment on existing drafts of foundational terms.

Substantive Concerns - Geographical Scope, licensing terms, and others

There are some positive features to the proposed HIV Medicines Alliance in terms of seeking drug company collaboration on treatment optimization, simplification, and standardization.  There is also positive attention to the problem of regulatory harmonization and drug registration and the need to develop improved treatments and formulations for key populations.  Finally, there is attention to the growing concern of ensuring a sustainable generic industry where competition is maximized but where rates of return also sufficient to encourage continued capacity development and production.  However, there are also multiple substantive problems in the draft Charter that need to be redressed.

Limited geographic scope:  The core geographic scope of the proposed HIV Medicines Alliance is limited to least developed and low-income countries and to sub-Saharan Africa.  Admittedly, this scope cover 75% of people currently living with HIV in developing countries, but it also excludes 25% - 8.5 million poor people living in Latin America and the Caribbean, South and South East Asia, North Africa and the Middle-East, and Eastern Europe and Central Asia.  This limited geographical scope represents a retreat from the current geographical of many drug company voluntary licensing agreements and from the 88% coverage achieved the the Gilead/Medicines Patent Pool license. It excludes PWAs with little or fragile access to medicines, whose middle-income country governments often under-serve them at present precisely because of higher tiered-prices for ARVs in their countries.

Many of these middle-income countries, including especially Brazil and Thailand, make the market for second- and third-line medicines because they were earliest in providing antiretroviral treatment to their people.  Excluding middle-income market-makers from the scope of the HIV Medicines Alliance will not only deprive many poor PWAs in those countries from accessing affordable medicines, but it will also retard the growth of competitive low-price markets with economies-of-scale in the core geographical scope countries as well.

Admittedly, the revised June 24 draft Charter states that it "recognizes the need for treatment optimization in other countries," but pharmaceutical companies only commit "to consider, individually and on a case-by-case basis, measures to address the issue of access to these [ARV] products for countries beyond this core scope."  Agreeing to "consider" promises nothing.  It's a vague, face-saving statement of ephemeral intentions, but it is unenforceable. Moreover, negotiating company-by-company, drug-by-drug, country-by-country is highly inefficient and is unlikely to produce the cross-licensing agreements that will permit the development and marketing of rational fixed-dose combinations.

Big Pharma has been fighting tooth and nail in every available forum to gain and maintain monopoly control over middle-income countries, especially China, Brazil, and India, but other pharmerging markets as well.  Much of its middle-income-country monopolization agenda is focused on trade agreements such as the Anti-Counterfeiting Trade Agreement (recently rejected by the European Parliament), the EU-India FTA, and the Trans-Pacific Partnership Agreement.  However, the attempt to exclude middle-income countries from access licensing has been a central feature in the WIPO Re:Search initiative (initiated by GSK) on neglected disease, in drug company negotiations with the Medicines Patent Pool, and in unilateral voluntary licensing agreements.

The HIV Medicines Alliance states that the core geographical scope will be a floor, not a ceiling, but the vehement persistence of Big Pharma in excluding middle-income countries suggests that geographical expansion will occur infrequently, if at all.  Instead, Big Pharma will have succeeded in establishing a global benchmark of restricted geographical access that will potentially undermine the Medicine Patent Pool, which has received sharp criticism for its limited, but more expansive territorial license with Gilead.  Big Pharma companies will achieve a reputational safe-haven in joining the Alliance that they hope will shield them from activist pressure to expand access in middle-income countries via licenses to the MPP, compulsory licenses, or otherwise.  Equally important, they will maintain their unilateral vetoes on expanding the geographical scope and privacy in any begrudging, minimalist expansion.

Regulatory issues:  The HIV Medicines Alliance companies require that medicines not be made available for licensing or otherwise until and unless registered in the US or EU, but there is no firm commitment to seek such registration or to do so on an expedited basis.  For medicines where companies have independent economic incentives to seek regulatory marketing approval, this might not be a problem.  However, for ARV formulations and combinations for which there are no rich country market incentives, e.g., pediatric formulations, the lack of a firm commitment to register could be a problem.  Likewise, innovator companies make no commitment to register their products in core scope territories and instead pass the entire burden of registration on to generic companies. Admittedly, innovator companies offer to provide some technical assistance on regulatory issues, but companies should be much more explicit about how they will help expedite generic registration.  For example, it's possible that innovators are intending to bypass data exclusivity rights and to facilitate fast-track reference- or reliance-based registration in licensed countries by means of their imprecise reference to licensing proprietary information, but greater specificity and clarity is highly desirable.  Fundamentally, it is undeniable that generic registration would be expedited in many countries if the innovator would initiate its own product registration and the Charter should address this need.

Limited to existing ARVs, with only case-by-case access to late-pipeline products:  One of the significant advances in the Gilead/MPP license was the agreement to license late-stage pipeline medicines so that generic companies could more quickly bring equivalents to market once initial regulatory approval had been achieved. Instead of establishing this as a baseline standard, the HIV Medicines Alliance Charter would allow individual-company, case-by-case decisions re access to late-stage clinical candidates.  Delaying licensed access to pipeline products until after regulatory approval would typically delay generic entry by at least three years.

Preservation of intellectual property rights and rights to proprietary information, and terms of purely discretionary licenses:  On the positive side, innovator companies have promised in-kind relevant technical and medicines information and "where feasible" expertise and capacity in product R&D, clinical, regulatory, manufacturing, and policy matters, subject to confidentiality agreements concerning proprietary information.  They have also promised to provide relevant technical and medical information to normative agencies and public health institution to ensure development of optimal guidelines for the use of ARVs.  However, innovators will retain their baseline intellectual property rights, which they call "important components of incentive structures," subject to their agreement to "support" (an indefinite commitment) licensing agreements covering relevant intellectual property rights and know-how.  In other words, innovator companies are not yet firmly committing to voluntary licenses let alone to the relinquishment of their IP rights in access territories.  With respect to discretionary licensing agreement that they might enter into, innovator companies wish to maintain tight control over provision of clinical supplies, review of clinical development plans, and review of registration strategies.  They also will maintain control over potential "template licensing agreements," agreeing only to work in good faith to develop the same.  Although the initial version of the draft Charter contained a commitment that the licenses would be royalty free, the revised Charter has removed that commitment and royalty terms go unaddressed.  Similarly, there is no discussion concerning grant-back rights or many other common features of licensing agreements.

Licensees and local production:  Very little is said about potential generic licensees except that they will be selected by the companies and that their generic medicines must be WHO-prequalified, which would include GMP certification of the manufacturing facility.  There is no commitment to offer open licenses to qualified producers, not to achieve any baseline level of competition.  Unfortunately, there is also no discussion of cooperation with efforts to expand local/regional pharmaceutical production in regions such as Africa, which are currently largely dependent on imported generics manufactured elsewhere.  Given that the AIDS pandemic is centered in sub-Saharan Africa and given regional efforts there to try to expand local pharmaceutical capacity, it seems odd that the HIV Medicines Alliance would not even mention this topic.

Light commitments to collaborative innovation:  One of the most important benefits of true collaboration in the identification and development of therapeutic priorities would be firm commitments to information-sharing and research partnerships.  Under the rubric of management of R&D, innovator companies in the draft Charter would "consider" flexible approaches, including collaborative R&D with other innovators and possibly the enablement of R&D collaboration with generics and others with reserved rights to provide input into the product development plan, the clinical trial design, and conducting reviews of clinical data.  One would wish for stronger commitments to collaboration than mere "consideration."  Likewise, it would be positive for the Alliance to propose models of collaboration with generic companies that were more even-handed and that more directly addressed the role of generics as they too engage in incremental innovation especially in more efficient synthesis and manufacturing processes.

Total absence of licensing transparency:  Again, a major advantage of the Gilead/MPP license was that it was totally transparent, if not in the negotiation at least with respect to final terms.  Here, there is no promise that discretionary voluntary licenses will be disclosed and those limited opportunities for outside stakeholders to evaluate the strengths and weaknesses of particular licenses.  Through leaks and otherwise, we know that past voluntary licenses have contained many troubling terms, indeed some that were frankly anti-competitive and unlawful.  The Alliance licenses will always be suspect if they are not open to inspection.

Absence of safeguards on TRIPS flexibilities and unbundling:  Early voluntary licenses frequently contained terms preventing licensees from challenging patents or from becoming compulsory licensees for territories outside of the core geographical scope of the license.  It is absolutely essential - full stop - that licenses not restrict generic companies rights to challenge improvidently granted patents or to become licensees where an excluded country lawfully issues a compulsory license.  The inclusion of patent-challenge and TRIPS-flexibility terms in the Gilead/MPP license was one of its most favorable provisions.  Similarly, past voluntary licenses often offered IP on a take-it-all or leave-it basis, meaning that licensees could not make strategic decision concerning different licensed technologies and between patent, regulatory data, and know-how trade secret.  The Gilead/MPP license, though imperfect in many respects, did allow such unbundling which has already been used by at least one generic licensee with respect to tenofovir.

Conclusion:  Is the HIV Medicines Initiative a Fig Leaf for Unilateral Decision-Making and Middle-Income Market Domination?

The proposed HIV Medicines Initiative is in its formative stages, but it already shows troubling signs of Big Pharma ideological control and manipulation.  Hiding behind Treatment 2.0's legitimate pursuit of improved ARVs as a fig leaf, Big Pharma has seized excessive unilateral and discretionary decision-making over key issues.  For example, before the Initiative was ever disclosed to advocates and other stakeholders, the principle decision on geographical scope was made so as to preemptively exclude 8.5 millions PWAs in middle-income countries. Likewise, the Initiative is strong on ephemeral promises but short on enforceable commitments.

The Treatment 2.0 innovation and product-development problems that the HIV Medicines Initiative is supposed to address are critically important - and therefore it is important to get the solution right.  There is a need for level-headed thinking and reflection on whether and why the Initiative is needed, whether the ARV innovation objective might not be better pursued through other means, including an expanded Medicines Patent Pool, and whether normative agencies, especially the WHO, shouldn't play a stronger role in governing the Initiative and guarding against conflicts of interest. Stakeholder engagement needs to be expanded to allow more vigorous critique, reformulation, and oversight.

In addition, no matter what positive steps are taken with respect to the HIV Medicines Alliance, countries need to enact, safeguard, and use their TRIPS-compliant flexibilities to access medicines.  Seventeen years after the passage of TRIPS and ten-plus years after the Doha Declaration, far too few countries have modified their laws to incorporate each and every TRIPS flexibility and even fewer have used those flexibilities to override IP and access barriers.  Given predictable resource constraints it remains imperative to maximize value for money, which in the ARV context requires energizing a robust, sustainable generic market that can serve low- and middle-income countries.

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

More information about the Ip-health mailing list