[Ip-health] ITPC's press statement on Gilead's voluntary license

Pauline Londeix pauline.londeix at gmail.com
Fri Sep 19 07:55:19 PDT 2014

Press release - International Treatment Preparedness Coalition (ITPC)

September 19, 2014


A Step Back for Millions of People with Hepatitis C:

Why Gilead's Recent Deal with Generic Producers for its Hepatitis C
Drugs (Sofosbuvir and Ledipasvir) is a Sham

Hepatitis C Virus (HCV) Treatment: Gilead Sciences Voluntary License

Under the pretext of increasing access to its hepatitis C treatment,
the new deal signed by Gilead for their HCV drugs sofosbuvir
(Sovaldi(c)) and ledipasvir hides a clear strategy to prevent fair
generic competition. Gilead, a U.S.-based pharmaceutical company, has
left millions of people with hepatitis C --worldwide -- without access
to life-saving treatment. The International Treatment Preparedness
Coalition (ITPC) denounces Gilead's strategy to block generic
competition. ITPC calls on governments across the world to take action
to ensure that an HCV cure will be available and accessible at the
lowest price possible, using all the flexibilities allowed under the
Trade-related Aspects of Intellectual Property Rights (TRIPS)
agreement including possibilities to develop local production, and use
competition/antitrust laws.

On September 15th, Gilead Sciences announced a voluntary license with
seven Indian-based generic companies that allows production and sale
of their new hepatitis C drugs sofosbuvir (Sovaldi(c)) and ledipasvir in
91 countries. The licenses are mainly for low-income (LICs) and least
developed countries (LDCs), and includes only a few middle-income
countries (MICs). Sofosbuvir (Sovaldi(c)), now on the market, and
ledipasvir, soon to be approved, are Direct Action Antivirals (DAAs)
demonstrating high cure rates when used in combination with other
drugs to treat HCV.

Gilead claims that their licenses will improve access to HCV treatment
and cure globally, but in reality, 51 key MICs with a high burden of
HCV are excluded from the deal. This initiative has little chance to
improve global HCV treatment access, since (unlike HIV) the highest
burden of the disease is located in upper- and middle-income
countries, where 73% of the world's 185 million people infected by HCV
worldwide live.

According to Christine Stegling, Executive Director of ITPC: "In the
absence of a global mechanism to fund HCV treatment in the poorest
countries in the world, it is very unlikely that this license will
have a significant impact. Additionally, this license leaves out
developing countries that have shown leadership by putting in place
treatment programs and investing domestic resources to treat their
people. We know from the past that voluntary licenses can have major
limitations as they do not always lead to production or export and
originator companies often do not bother registering their product in
poorest countries. This ultimately prevents generic producers from
registering their products in the country. In the case of this
license, the originator company Gilead, has not given any timeline
regarding their registration process in these 91 countries".

While the anticipated impact of the license in the covered countries
remains theoretical and uncertain, we know that Gilead's deal will
immediately block access to generic HCV treatment in excluded
countries, even where there are no patent barriers. Developing
countries from Latin America, North Africa, the Middle East, as well
as Eastern Europe and South, Southeast and Central Asia cannot afford
the high prices offered by Gilead or the "discounted prices", given
the sheer number of people in need of treatment and care-related

Excluded countries include: China (30 million of people with HCV),
Brazil (2.6 million), the Philippines (1.9 million), Turkey (1.5
millions), Thailand (1.4 million) and Mexico (1.1 million).

For ITPC, the license is a step back from the international consensus
on use of the flexibilities included in the TRIPS agreement to protect
public health and access to medicines. Gilead's license territory
includes LDCs, which have until 2021 to implement the TRIPS agreement
and are not under obligation to grant patents. The licensing
agreements also provide a rationale for market monopolies in excluded
countries where Gilead has no patents, nor the right to claim a

"There are no patents on sofosbuvir in India and several other
countries that these generic companies could have sold to. These
licenses are clearly designed by Gilead to prevent competition, which
means that millions will go without access to this drug." said Tahir
Amin, Director of Intellectual Property at I-MAK.org, which has filed
patent oppositions on the drug in India. "There is a high probability
that Gilead's patents will be rejected by patent offices around the
world, and yet today's license will stop these generic companies from
supplying those countries."

In November 2013 and March 2014, The Delhi Network of Positive People
(DNP+) and Initiative for Medicine and Access to Knowledge (I-MAK)
filed a pre-grant oppositions application challenging the validity of
key patent applications for sofosbuvir in India. The Asia Pacific
Network of People Living with HIV (APN+) with Sankalp Rehabilitation
Trust and Hepatitis Coalition Nagaland - represented by Lawyers
Collective (LC) - filed another opposition in September 2014. A patent
has already been rejected twice by the Egyptian patent office for lack
of novelty and inventiveness.

"By unlocking access to generic sofosbuvir, the governments of
countries left out of the license could save at least US$60 billion
dollars, according to our analysis," stated Priti Radhakrishnan,
Director of Treatment Access at I-MAK.org. "We urge these country
governments to take urgent action to reject the patents on sofosbuvir
and ensure this drug reaches the people whose lives depend upon it."

According to I-MAK's analysis, the cost of the exclusion of most MICs
from Gilead's license will be extremely high. For example, if Gilead
charges Latin American countries US$7,000 for a course of sofosbuvir,
it would require the Argentinian health authorities to overspend
(their existing budget) by US$5 billion, and the Brazilian health
authorities to overspend by US$17.3 billion, to provide access to
these new drugs without generic competition. Even in the unlikely
scenario that Gilead were to lower its price as low as US$1,567 for
excluded countries, the amount these countries would overspend would
be prohibitive: in China US$36.7 billion, in Morocco US$736 million in
Thailand US$1.9 billion, and in Ukraine US$2.9 billion.

Another point of concern is that Gilead's license also excludes sales
of the active pharmaceutical ingredients (API) used as raw materials
for local production to non-partners of Gilead, even in countries
included in the license."This is terrible news for countries who have
capacity to produce their own medicines," said Othoman Mellouk,
Regional Advocacy Coordinator of ITPC in The Middle East and North
Africa (MENA), "In countries like Egypt where 20 million people are
infected with HCV, governments will not be able to secure treatment
for all even with the discounted price provided by Gilead. The country
started working recently on local production of sofosbuvir to ensure
sustainability of treatment. Now, with this license, local
manufacturers will not be able to buy APIs anymore from Indian
suppliers. Egypt will now have to completely rely on generic producers
selected by Gilead - which essentially means just replacing a monopoly
with another. Although this country is covered by the license and the
patent on sofosbuvir is not granted, free and fair generic competition
is just not possible anymore, thanks to Gilead's move."

"Gilead announced its licensing agreements as a means to increase
access in developing countries. It should be clear by now that these
agreements that are based on voluntary licenses, are not intended to
promote access, but to segment markets and increase company profits,"
stated Marcela Vieira, coordinator of GTPI/Rebrip - Working Group on
Intellectual Property of the Brazilian Network for Integration of
Peoples in Brazil.

"It is important to recognize that Gilead's licenses are a wolf
dressed as a lamb. They will hinder access for millions of people in
desperate need of HCV treatment, and harm the entire generic
industry," stated Tracy Swan, Hepatitis/HIV Project Director at
Treatment Action Group in New York City.

ITPC has noted with deep concern that the leading Indian generic
company Cipla is among the companies who have signed this deal with
Gilead. In the HIV field, Cipla has demonstrated a proactive approach
to develop generic versions of unpatented medicines in India, and
opposed abusive patents in collaboration with community and consumer
groups. The company's leadership has been an inspiration for other
generic producers and garnered respect and trust from civil society
and community groups worldwide. Today, ITPC is deeply concerned that
by entering into such license with Gilead, Cipla will deprive many
developing countries of an important source of procurement of
affordable and quality generic medicines that could save millions of
lives, especially in middle-income countries.

"We denounce Gilead's attempts to block generic competition and urge
them to amend this license to allow all those in need to access
treatment regardless where they live. Our movement calls on
governments across the world to take action to ensure that an HCV cure
will be available and accessible at the lowest price possible." Gregg
Gonsalves, Interim Chair of the Global Advisory Board of ITPC.

For further information please contact:

Pauline Londeix, IP and Access Advisor, ITPC MENA, atpauline.londeix at gmail.com

Othoman Mellouk, Regional Coordinator, ITPC MENA, ato.mellouk at gmail.com

Christine Stegling, Executive Director, ITPC at cstegling at itpcglobal.com

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