Brazil's latest compulsory licensing announcement

by James Packard Love

Michel Lotrowska, a musician and health activist in Brazil, posted this informative note on Brazil's latest announcement that it was considering a compulsory license on patents for a medicine -- in this case, efavirenz, the BMS/Merck AIDS drug marketed by Merck in Brazil.

As noted by Michel and others, the Brazil government is using the threat of the compulsory license to negotiate a lower price from Merck. Most health activists and groups, including Knowledge Ecology International, say that Brazil should forget about the negotiations with Merck, and just issue the compulsory license, and then buy the drug from the lowest price suppliers (of acceptable quality). Why?

First, no one can really say today what the long term best price will be for this drug. Brazil thought they were getting a good price when they previously negotiated a $580 per year price. When Thailand actually did issue a compulsory license, they were able to buy the drug from a Generic supplier for $238 per year.

How low can prices go? With larger economies of scale, this product should be available for less than $400 per formulated kilo, or less than $90 per year, for the 600 mg per day dose. But his will only happen if several large countries buy from generic suppliers. Thailand and Brazil together would make a big difference.

Second, Brazil needs access to generic versions of new fixed dose combinations, like FTC + TDF + EFV, not to mention newer protease inhibitors that are co-formulated with ritonavir. Brazil, a member of UNITAID, needs to create a patent pool for all patents that are relevant for sustaining treatments for AIDS, and ensure that the pool has access to everything, through compulsory licenses if necessary.

Brazil then should negotiate on the remuneration for patent owners. They should not make the mistake of Thailand, and start the negotiation with a royalty rate that is very low, because the world will see this as evidence that the country will not pay a reasonable amount. One possibility would be use the 2005 WHO/UNDP remuneration guidelines, which I wrote. Another possibility would be to set aside a fraction of the budget for ARV purchases for a prize fund that would reward developers of new AIDS drugs, in proportion to the impact of the drug on improving health outcomes. This second approach would be the most innovative, and sustainable, in the longer run, in our opinion.

E.C. on: Ethical aspects of patenting inventions involving human stem cells

by James Packard Love

This 2002 opinion by the E.C. Europe Group on Ethic's addressed larger issues of patents on stem cells, but it's statements on patents and access to health care have broader implications.

* 2.9. PATENTS AND ACCESS TO HEALTH CARE
The patent creates a control regarding commercial use. This raises questions as to the uses which are covered by the patent. To secure that patent holders do not misuse their rights for example by charging unreasonable fees for the use of their inventions, EGE finds that the recourse to compulsory licence should be encouraged when the access to diagnosis and treatment is blocked by misuse of patent rights. The EGE stresses the fact that it is the responsibility of the states to establish legal procedure for the delivery of compulsory licence and to examine if fair access to health care justifies such a procedure.

[Note the broad application of this statement, which is not limited to particular diseases or health problems. jl].

The Text of the Opinion No 16
ETHICAL ASPECTS OF PATENTING INVENTIONS INVOLVING HUMAN STEM CELLS

Delivered by the European Group on Ethics
In Science and New Technologies
To the European Commission
On 7 May 2002

Reference: Request by the European Commission on 18th October 2000
Rapporteurs: Linda Nielsen and Peter Whittaker
*****************************************************************************************************************************
The European Group on Ethics in Science and New Technologies (EGE),

2. OPINION
2.1. SCOPE OF THE OPINION

According to the 1998 EU Directive on the Legal Protection of Biotechnological Inventions article 7: « EGE evaluates all ethical aspects of biotechnology ».

The Group has, in its Opinion No. 15 of 14th November 2000 on the ethical implications of human stem cell research and its uses, made recommendations, namely:

- to set up a strict public control by centralised authorities, on human embryo research where it is allowed;

- to take measures to prevent commercialisation of human embryos or cadaveric foetal tissue;

- to ensure the respect of ethical principles through the control of public authorities, concerning import of human stem cells, where allowed.

This present opinion deals with the specific ethical questions related to patenting of inventions involving human stem cells. The Group is aware of the fact that patents also involve many difficult and different questions of an economic and political nature, which may influence the way of dealing with patents, but has seen its task as providing an ethical focus on the question. The rapid development of biotechnology, especially the promise of stem cell research, makes it appropriate to consider and clarify some questions which could not have been taken into account when the 1998 EU Directive was drafted, given the state of the art at that time.

One option would have been to forbid patenting of stem cells or stem cell lines. The consequence of such an option would be the major slowing of this research field (except in case of a very unlikely large public investment), and the EGE opinion is that it would be contrary to public (and especially patients’) interests. Moreover, the Group considers that it would be contrary to the EU choices as expressed by the 1998 EU Directive on patenting. The Group finds that it is crucial to define the conditions required to patent, the limits of the patenting of human stem cells in relation to ethical considerations and the relevant processes securing ethical evaluation.


2.2. THE BASIC ETHICAL DILEMMA
EGE recognises the importance of patents as an incentive to innovation and as a reward to the inventor for openness and publishing the results.

One ethical dilemma arises due to the fact that patents can encourage scientific progress which can be used to the benefit of better health care, and at the same time, patents can also impair access to the health care due to the need of a licence to use them and to the fees that will have to be paid to the patent holder.

It is then necessary to secure the right balance between the inventor’s interests and the society’s interest – in the sense that one task for the community is to secure ethical principles and values in the context of possible conflicting interests of stake-holders, namely: patients and patients’ associations, inventors and other researchers, donors, industry, investors, healthcare providers, and social insurance providers.

In order to be able to specify ethical limitations, a number of problems are to be considered, including:

- content of patents (process or product);
- various sources of stem cells;
- methods used to derive stem cells;
- protection of the donor;
- possible socio-economic consequences and philosophical implications of the patent system as applied to stem cells (further research, access to health care).


2.7. PATENTS AND FURTHER RESEARCH AND DEVELOPMENT
Although the appreciation of the patentability of an invention in biotechnology as in other fields is a matter of a case by case evaluation by a patent office and eventually by a court, the
Group again insists on the necessity to avoid the granting of too broad patents that would impair further research and development.

In the new area of stem cell research, the potential use is hoped to expand over time and stem cell lines may provide very important research tools. In addition to the academic exemption, it is essential to secure that patents on stem cell lines are not too broad, as this may have adverse effects on the aim to support further innovation to the benefit of health care.

It is therefore the opinion of EGE that patents shall only be granted, when the patent claim refers to a specific and a sufficiently accurately described stem cell line and its industrial application. That involves a consistent relationship between a patent claim and the description of the invention.


2.9. PATENTS AND ACCESS TO HEALTH CARE

The patent creates a control regarding commercial use. This raises questions as to the uses which are covered by the patent.

To secure that patent holders do not misuse their rights for example by charging unreasonable fees for the use of their inventions, EGE finds that the recourse to compulsory licence should be encouraged when the access to diagnosis and treatment is blocked by misuse of patent rights.

The EGE stresses the fact that it is the responsibility of the states to establish legal procedure for the delivery of compulsory licence and to examine if fair access to health care justifies such a procedure.