[Ip-health] KEI welcomes the Gilead HCV licenses, as a step to expand access to treatments. Notes challenges that remain

Thiru Balasubramaniam thiru at keionline.org
Mon Sep 15 06:52:37 PDT 2014



   - Copy of license:
   - KEI web page on hepatitis: http://www.keionline.org/hepatitis
   - KEI hepatitis timeline: http://www.keionline.org/hcvtimeline

KEI welcomes the Gilead HCV licenses, as a step to expand access to
treatments. Notes challenges that remain

Today Gilead announced it will provide seven generic drug manufacturers
licenses to make and sell two drugs that are used in combination to treat
the Hepatitis C Virus (HCV) in 91 developing countries.

The 91 countries in the licensed territory had a 2013 population of 3.26
billion persons, about 46 percent of the world population, and a per capita
income of $1,879. According to Gilead, about 54 percent of persons infected
with HCV live in the 91 countries. (Countries outside of the licenses had a
population of 3.87 billion persons, and a per capita income of $17,876).
Among countries not considered high income by the World Bank, the
percentage of persons included in the covered territory was 56 percent.
When both China and high income countries are excluded, the percentage is
73 percent. (Calculations here: http://goo.gl/3QgBS5)

The seven generic producers, which include CIPLA, Hetero, Ranbaxy, Mylan,
Strides, Sequent and Cadila Healthcare, must manufacture the active
pharmaceutical ingredients (APIs) in India. The license covers a number of
different patents, many of which have been filed but not issued, as well as
rights to rely upon Gilead test data for drug registration, and, at the
option of the company, know-how.

The licensed products are sofosbuvir (SOF), currently sold by Gilead under
the brand name Sovaldi, and ledipasvir (LDV), a drug not yet approved by
the US FDA. Under the license, generic manufacturers can make and sell
either drug separately, as a two drug combination, or in combination with
other drugs. The license does not include another Gilead pipeline drug,
GS-5816, which may work against more or all genotypes. Gilead says that
GS-5816 may be included at a later date.

The generic companies may make and supply countries outside of the
territory, if a patent does not exist, or if a compulsory license has been
issued. People who have looked at the license are in the process of
evaluating how it will work for countries where patents have been filed but
not granted. The royalty rate for the licenses are 7 percent of the generic

Gilead will be publishing the text of the basic license template.

Gilead’s HCV license is pro-competitive, in the sense that the license
covers a large enough area to induce entry, includes know-how and test data
rights, enables seven strong generic suppliers, and does not prohibit
companies from selling outside of the territory on a compulsory license,
including the mandatory export license in Section 92A of the Indian patent

The limits on the API supply in the license are not ideal, and, among other
things, may place too much emphasis on the proceedings in India, as regards
the patent grants. From the point of view of patients, the fact that seven
strong generic companies are licensed will be important. The licenses may
lead to an easy to administer oral combination of SOF+LDV priced under $100
for a course of treatment, if prices per gram for FDA approved generic HIV
drugs are a guide, and this will be good news for those patients in the
covered territory who can be treated successfully by SOF+LDV.

For some genotypes of HCV, a combination involving SOF and GS-5816, or a
second drug developed by another company, such as the BMS’s HCV drug
daclatasvir (DAC), may be the better treatment. KEI is not aware of efforts
by BMS, Merck, Roche, Novartis, J&J or Abbott to license their HCV patents
to generic suppliers.

Many, including KEI, wanted Gilead to include more countries in the covered

Patients living in countries outside of the covered territory can benefit
from the license, which creates a set of competitive suppliers of the
Gilead HCV drugs, if their country issues a compulsory licenses on patents,
or otherwise enables exports from India under Section 92A of the Indian
patent law, or through medical tourism.

There exist many challenges in expanding access to treatments for HCV,
including those relating to expanding diagnosis for HCV, registering
products, obtaining access to none-Gilead products, and funding treatment
programs. The intellectual property issues will continue to be important,
as well other issues.

The Gilead licenses are a step forward as regards access and KEI sees them
as have a number of very important benefits for patients, including
accelerating the entry by generic suppliers, creating competition among
suppliers, and addressing non-patient barriers to drug registration, by
addressing the rights in test data, for the covered territory in the
license, or countries that find a way to import from license holders.

Among the future challenges are to address access in the countries outside
of Gilead’s licensed area, and to engage patent holders other than Gilead,
for both diagnostics and treatments, as well the problems relating to the
registration of drug, the marketing of products, and the funding of

Manon Ress of KEI offered the following statement:

After today, the number of HCV patients who can imagine getting a cure has
expanded greatly. The license does not address all countries, nor all drugs
patients might need. Gilead has stepped up, to ensure there will be
competitive suppliers in generic versions of their drugs. BMS, Merck,
Abbott, Roche, Novartis, J&J and other companies need to follow suit.

James Love of KEI offered this statement:

There are many benefits in the new Gilead licenses. Among them, Gilead is
working with seven very strong generic manufactures, and the competition
between them will drive the price down for the Gilead drugs. Gilead will
allow the companies signing the licenses to sell outside of the licensed
territory, to countries that issue compulsory licenses, or where there are
no patents. Gilead will allow its products to be used in combinations with
drugs from other companies. Gilead has published the text of the voluntary
license, a transparency promoting action that is quite important.

We don't like the narrow coverage in so called middle income countries.
Gilead should expand the license to include Mexico, more countries in South
America, Central America and the Caribbean, greater coverage of South and
Central Asia, North Africa and Eastern Europe. It will also be important
that generic drugs are available in China. In each of these areas, there
are a significant number of persons living with HCV who will not receive
treatment at Gilead's prices. Addressing these access gaps will be
important, and patient advocates should encourage the excluded developing
countries to issue compulsory licenses in order to receive exports from the
companies with the licenses, or from companies that did not sign the

High income countries also face considerable challenges in terms of access
and affordability of HCV drugs. We hope that important debate is delinked
from the policies in developing countries, where the realities of financing
treatment are considerably more difficult.

Thiru Balasubramaniam, Managing Director of KEI-Europe, offered this

Gilead, by acting first to license its HCV patents, has shown leadership.
We see the license as a serious effort to improve access and affordability
in developing countries. It can be difficult to compare the coverage of the
HCV and HIV licenses for several reasons. First, the incidence of HCV is
more evenly distributed among countries, than is the case for HIV. Second,
the new HCV drugs offer a 12 week cure for HCV, and are not used as part of
a daily chronic treatment regime. For this reason, Gilead faces larger
challenges as regards diversion from low income to high income markets.
Given these challenges, Gilead has taken some risks, for the benefit of
lower income patients. The many middle income countries that have been
excluded from the licenses should have more bargaining power, since there
will be multiple high quality suppliers of affordable drugs, should they
decide to grant compulsory licenses, and this will be a factor even when
negotiations lead to price reductions.

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