On November 9, the Board of Trustees of the Association of University Technology Transfer Managers (AUTM) released and endorsed a “Statement of Principles and Strategies for the Equitable Dissemination of Medical Technologies” (AUTM Statement), which sounds like a good idea. After all, US universities, which receive more than $24 billion each year in public funds for health-related research, should have an interest in “disseminating” the resulting technology equitably and in ways that benefit US public health and, since the US is a world leader, global health. And the 1981 Bayh-Dole Act, through which the government created the university technology tech transfer industry by granting ownership of inventions made with federal funds to the institutions doing the research, was intended to promote commercialization of research results for pubic benefit (Council of Government Relations on Bayh-Dole). Consequently, almost every institution receiving federal research funding now has a tech transfer office (TTO) with an average staff of five people and gross licensing income of about $6 million (AUTM 2007 Licensing Survey). Institutions should be happy to endorse the Statement (six universities have signed already) since it is well-intentioned and unlikely to interfere the TTOs’ primary mandate to generate licensing revenue.
So what actions will the signatories undertake to achieve the equitable dissemination of technology for the public good? In addition to being “innovative and persistent” and making “vigorous efforts,” the institutions agree:
-not to pursue patents in countries where a generic (competing) version of the licensed product may be developed (essentially encouraging development of cheaper versions) but with exceptions one of which is for countries with the ability to sell a generic version in the major markets (e.g., China, Brazil, and India) (essentially making the commitment meaningless);
-to negotiate licenses that “draw on” (why not “include”?) “strategies” (“terms”?) like: no or low royalties on sales in low-income countries, the right to license others who may be willing to create products for low-income markets if the original licensee does not, required diligence in the development of products (for low income countries?), and “appropriate pricing;” and
-to “support the development” global health technologies at their institutions by accepting research funding from not-for-profits and “appropriate” for-profits “without regard to the economic value” of the funding (does this mean Harvard is giving up its 85% overhead rate on these contracts?).
The signatories also agree to the general obligations of developing measures for evaluating their efforts, sharing their experiences, encouraging others to adopt the Principles, and review the Statement every two years.
Obviously the Statement is well-intentioned what will be its practical effect on the much-needed invention and dissemination of new ways to diagnose and treat the diseases afflicting most of the world’s population? Unfortunately, very little, and for several reasons:
-being a statement of principles, it provides only non-binding guidance;
-it has major exceptions (noted above) that allow patenting and licensing as usual;
-it presumes that a TTO is licensing a product which is extremely rare (most licenses are for technologies leading to products) so the TTO’s leverage in negotiating the recommended terms is limited;
-the likelihood that a licensee (especially a start-up company) will accept the recommended restrictions (in addition to dealing with the TTO’s typical over-valuing of its technology) is low; and
-the patent coverage for products or technologies relevant to global health is the least important factor in their commercialization and use (evidence that they may work is most important).
So what should the TTOs and their universities and research institutions be doing? My recommendations are:
-rather than granting exclusive world-wide licenses, license non- or semi-exclusively by indication, geography, price, or national origin of the proposed licensee;
-grant multiple time-limited, no-cost options to interested parties to generate competition and proof-of-concept data;
-seek out entrepreneurs interested in creating no/low-profit ventures (tap alums if needed) as opposed to chasing venture capital firms (who aren’t interested in global health markets anyway);
-pool patents with other institutions to create patent packages needed for product development and make them easily accessed through standardized licenses;
-stop patenting methods for drug and vaccine discovery or at least stop licensing them exclusively;
-provide internal funding for proof-of-concept research on global health-relevant technology (some universities already have technology development funds to add value to early-stage research);
-review all existing licenses for global-health-relevant applications and try to force renegotiation in line with the Principles;
-be aware that, in addition to the “neglected diseases,” chronic conditions like cardiovascular disease, diabetes, and cancer are major contributors to mortality in low-income countries and therefore negotiate licenses for technologies for these indications in line with the Principles; and
-dissuade their administrations from measuring TTO performance solely on revenue and persuade them that licensing for social good is a duty of a publicly-funded university.
I thank AUTM, the authors, and institutions for drafting and endorsing the Statement, but we have got a long way to go to putting a meaningful fraction of our billions of academic research dollars to work in addressing global health.