At a time when Big Pharma is struggling with new business models geared to the demands of a changing marketplace, the Medicines Patent Pool (MPP) is offering a way forward through voluntary licensing and patent deals that it insists will deliver what the drug majors say they want: more innovation; better market access; and the opportunity to demonstrate measurable improvements in public health. Is the MPP, as founding chair Phillipe Douste-Blazy claims, that “new business model for the future?”
Not yet. Progress in bringing companies into the fold has been slow. But this Geneva-based wing of the multilateral donor group UNITAID is redoubling its efforts under new, pragmatic leadership more interested in scoring deals that scoring points, particularly as the global health debate expands beyond the ideologically-charged context of AIDS, money and medicine to multiple disease partnerships focused on system-wide solutions.
MPP was established three years ago to support UNITAID’s mission in financing new treatments to fight the AIDS pandemic. It has a mandate to promote development and distribution of low-cost medicines through the negotiation of a “pool” of patents that can be licensed for production and sale in countries where access to HIV treatment is limited by resource constraints or cost. Staff are charged to negotiate licenses and sub-licenses with public and private sector partners; they also administer a data base to identify patented originator products relevant to addressing what the WHO and other aid agencies see as the most pressing treatment priorities in the HIV space. Terms of engagement are transparently clear: MPP only works around “live” patented medicines that can positively impact these priorities; if the patent has expired or is close to LOE, MPP doesn’t bite.
To date, MPP has forged deals with three partners. The first, with Gilead Sciences, gives it licenses on four HIV medicines plus a fixed dose combination of these four in a single pill known as the “Quad.” Three of the five [cobicistat, elvitegravir, and the Quad] are products still in clinical development, and the agreement allows for the development and manufacture of other combinations based on these medicines. One drug — tenofovir — is also licensed for use in Hepatitis B. In February, MPP agreed a license with the HIV joint venture ViiV Healthcare [GSK, Pfizer and Shionogi] for the pediatric AIDS drug abacavir, which will be distributed in 118 countries that cover almost 99 per cent of the world’s children with HIV. The pact calls for additional work to secure licenses and development rights for new fixed dose combinations geared to young patients. The third deal is with the US National Institutes of Health that awarded MPP its licenses on darunavir, a protease inhibitor for HIV, for production in low and middle income countries.
A fundamental sidebar to these deals is the sub-licenses MPP has secured for a whole host of low-cost generic manufacturers, including Shasun, Aurobindo, Hetero and Emcure. Hetero, based in India, alone produces ARV treatments for over 2 million HIV patients, in 100-plus countries.
Greg Perry, MPP’s new Executive Director who took up the post in January, told Pharm Exec that, while three partnerships in three years may seem a modest achievement, each sets important precedents for access. “Our work with the NIH is a badge of political support and established our credibility on public health. The Gilead partnership focuses on products still in the development pipeline, which allows us to accelerate the timing for uptake of these critical medicines in the field. And ViiV has committed to place its pipeline products into the pool once they are approved by regulatory authorities, with additional transfers of technology to assist generic sub-licensors in manufacturing, bioequivalence studies, and quality control. In essence, we are building with them an IP platform to help facilitate the registration of a new drug – you could say our original ‘imitation’ pool is actually becoming an innovation pool.”
Three and counting
MPP is currently in active negotiations with three other pharma companies: BMS, Roche and Boehringer-Ingelheim. Talks are “most advanced” with the first two. Other targets include AbbVie, Merck, and J&J. According to Perry, who most recently served as founding Director of the European Generic Medicines Association, “talking to big companies takes an equally big commitment of time. It’s no different than any other complex bilateral transaction, with the main issues being geographical scope, timing and conditions for transfers of technology, royalty terms, and provisions to structure relations with third parties.“ Perry contends his background as a trade group executive gives him a good understanding of how to work productively with the private sector. Companies seem to prefer him to the political baggage that the MPP’s first director, Ellie ‘t Hoen, carried as a prominent consumer activist, industry public scold – and key target for free-market think tanks financed largely by the big drug makers.
Perry says the message he takes to industry is all about predictability. “We reduce transaction costs and alleviate risk through our guarantees of efficacy and quality for all sub-licensors. With the patent pool, you will get the product on the market and deliver access to the target population we all identify as necessary to reach. It precludes the wasted time and effort when a license is agreed but never activated by the contracting parties. There are no such lost opportunities with us.”
Still, many companies remain to be convinced, with one executive that has been in talks with the MPP noting that it will not budge on one key concern: limiting the geographic reach of concessionary patent terms to bar those high growth, middle-income countries outside sub-Saharan Africa. This comes as no surprise, given that all the MPP’s principal sub-licensors to date are Indian. Other issues are the MPP’s reluctance to tighten and clarify contract terms [the MPP relies on a standardized 30-page text] covering the respective management and execution roles between licensors and licensees. Likewise, while there is much optimism about generic sub-licensors taking the lead in working with patent holders to commercialize new fixed dose combinations and other novel approaches to access, no guarantee exists that this will occur, particularly as the financial incentives for them to do so appear lacking.
Perry seems sensitive to these concerns and told Pharm Exec he is looking to see what additional dividends the MPP can offer to persuade industry to collaborate. “One improvement we’d like to facilitate is helping the industry obtain faster approval times for new drugs that meet a designated public health need. We are talking with numerous LDC governments to accelerate cooperation around faster time lines and more transparency on drug registration. The MPP is also involved in a WHO pilot project on a standard regime for the prequalification of priority medicines.”
So we return to that mission of the MPP – is it truly the vanguard of a new business model for pharma on the global stage? Could it be a tool for the hidden agendas of profit-seeking generic suppliers posing as alms for the poor? Or is it a public policy experiment with no grounding in the brutal logic that drives decisions in real-world markets? For now it’s anyone’s guess, but time will eventually cast a verdict. Licensing is, by definition, a transactional business – someone has to come to the table.
William Looney is Pharm Exec’s Editor-in-Chief.