[Ip-health] New ViiV license with the Medicines Patent Pool expands access but eviscerates transparency

Ed Silverman pharmalot at gmail.com
Tue Dec 1 07:17:17 PST 2020

Hi Brook
You made some good points. So I've updated my post to include a couple of
your written comments  - with proper attribution - and noted the update for
Also, just fyi, ViiV is controlled by Glaxo. Pfizer has a minority stake.
ed at pharmalot

On Tue, Dec 1, 2020 at 9:53 AM Baker, Brook <b.baker at northeastern.edu>

> New ViiV license with the Medicines Patent Pool expands access but
> eviscerates transparency
> Brook K. Baker, Senior Policy Analyst Health GAP (Global Access Project)
> Dec. 1, 2020
> The Medicines Patent Pool (MPP) has announced a new licensing agreement
> for dolutegravir (DTG) with ViiV for four countries (Azerbaijan, Belarus,
> Kazakhstan, and Malaysia) excluded from earlier licensing agreements.
> Reports<
> https://www.statnews.com/pharmalot/2020/11/30/hiv-aids-patents-viiv/>
> about this new announcement, which resulted from negotiations that directly
> involved the affected countries’ governments (unlike many past MPP
> licenses), have missed significant shortcomings in the deal.
> First, only three generic companies will be selected as sublicensees via a
> call for expressions of interest from the MPP.  Although all successful
> licensees will be required to register their generic DTG in all four
> countries, which will create a modicum of competition, the MPP also admits
> that generic licensees will in all likelihood price their generic versions
> substantially higher than the $75 per year secured through by the Clinton
> Health Access Initiative and others in 2014. In fact, the MPP anticipates
> an eventual price in the range of $400-$500 per year, a sign of both
> inexcusably high tiered pricing by generic licensees and an excessive
> royalty charged by ViiV.
> The precise royalty is undisclosed, but is estimated to be orders of
> magnitude higher than royalties previously charged on MPP licenses, which
> have ranged from 5-10%. The royalty will decrease as volumes
> increase—although no one knows by how much, because that information is
> being hidden.
> In an outrageous move, Pfizer is claiming that the royalty rate
> information is “commercially sensitive” and thus must be kept confidential.
> The MPP for the first time ever is acceding to industry demands to redact
> the royalty terms from its published licenses.  The MPP has historically
> been committed to full transparency of its licenses.  Now upsetting that
> commendable principle and bowing to Pfizer’s unprincipled demand and
> countries’ regrettable  acquiescence to secrecy, a key term in an MPP
> license will be hidden from public view.  This is a major setback to the
> principles upon which the MPP was founded and it is also a dangerous
> precedent in the COVID-19 era, where companies are hiding behind claims of
> transparency to maximize profits and power. They are insisting that
> everything— their R&D contracts, clinical trial protocols, research data,
> pricing decisions, advance purchase agreements and option contracts are
> entitled to full confidentiality as “trade secrets.”
> This precedent will also come back to haunt the MPP in future negotiations
> with Pharma companies that may now see a window of opportunity to override
> public demands for transparency in voluntary licenses and other agreements.
> Although the MPP and countries share a portion of blame for acceding to
> ViiV’s demands for secrecy, the major blame falls squarely on the shoulders
> of ViiV and its parent company, Pfizer, that demand that a key term in
> their licensing agreement should be hidden from public view and criticism.
>   There is no principled basis in the world why ViiV’s MPP royalty rates in
> previous agreements are subject to transparency, but royalties in these
> four countries are not.
> It is a positive development that the new MPP/ViiV license includes four
> upper-middle income countries that have been unnecessarily excluded for 6
> years, that countries were included in the negotiation process, and that
> prices are significantly reduced.  However, prices are still excessive
> compared to the prices in low- and lower-middle income countries both
> because of generic licensees’ freedom to set prices and high royalty rates
> charged by ViiV.  The absolute worst part of the agreement is the secrecy
> of the royalty rate agreement, which now threatens to become a regular
> feature of all licensing globally, including at the MPP.  The MPP might try
> to argue that they would only accept such a term for expansion into
> “commercial markets” or where countries agree, but Pharma is completely
> behind this downward ratchet to license transparency.
> Finally, many upper middle income countries still excluded from VIiV’s
> voluntary licenses. People living with HIV in these countries are at
> greater risk of substandard treatment because of ViiV’s unjust monopoly. We
> call on those countries to urgently use their rights to override ViiV’s
> intellectual property rights in favor of cost-cutting generic competition.
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