Victory!

… for affordable medicines, or not?  According to some press coverage, this week’s rejection by India’s Supreme Court of the appeal of a patent application denial by Novartis, a multinational pharma company (MNC), on its cancer drug, Gleevec, was a triumph for the poor of India who can’t afford the high price of the drug and for India’s generic drug companies who supply affordable medicines to the developing world.  Not surprising, the story is more complicated and, for me anyway, the case’s resolution is of minor importance in creating a competitive world market for drugs.

Gleevec is one of Novartis’s most profitable drugs with worldwide sales of $4.7 billion in 2012 (FiercePharma article), in part because it works well against its molecular target and in part because Novartis has worked diligently to expand its approved uses for a bunch of relatively rare cancers.  Invented by Novartis (then Ciba-Geigy) in the 1990s and based on 30 years of academic research, Gleevec was approved in 2001 by the FDA for the treatment of a rare white blood cell cancer, chronic myelogenous leukemia, for which it increased the 5-year survival rate from 30 to 90% (Scitable article).  It is now used to treat a dozen cancers and proliferative diseases.  The patent case in India as along history, too, as I learned from Derek Lowe’s post (In the Pipeline ) and a summary by the Lawyers Collective HIV/AIDS Unit (2009 Summary).  Novartis got around to filing a patent on Gleevec in India in 1998 before the country was granting composition-of-matter patents, and, for a reason obscure to  me, the application was for a purer “beta-crystalline” form of the drug.  In 2005, the patent office rejected the application because Novartis had not shown that this form was sufficiently more effective that the original Gleevec under a section of the patent law designed to prevent companies from extending a drug’s patent life by filing patents on inconsequential changes to it.  After appeals, rulings, and changes of venue, the case came before the Supreme Court in 2009 and was decided against Novartis this week (the wheels of justice grind slowly but also finely).

Given Novartis’s dogged pursuit of the case, one would presume it stood to lose a lucrative market for Gleevec in India but not so.  The company gives the drug away to needy patients, currently to 31,000 in 80 countries, including 16,000 or 95% of all patients in India (and 5,000 in the US) (Novartis Gleevec case FAQ).  Was it to prevent India’s generics companies from flooding the world with low-priced Gleevec look-a-likes?  Not likely, since the knock-offs are out there already at a tenth of list price (PharmacyChecker.com, PharmacyChecker.com), and the drug goes off patent anyway in 2015*.  Was it because, as a spokesperson for Médecins Sans Frontières (MSF) implied, Novartis and other MNCs are attacking Indian patent law to maximize profit and minimize access to essential medicines (WSJ article)?  While I acknowledge that companies need to maximize profit to stay in business, I’m glad that Novartis is profitable enough to have a essential medicines access program and to develop Coratem (a combination drug for malaria) and sell more than 400 million doses at cost to public-sector agencies, including MSF, since 2001, contributing to saving 1 million lives in Africa (Novartis access program).  As for attacking, it seems the Indian patent office and courts are attacking the MNCs’ patents, including by favoring the granting of compulsory licenses because a patented drug was being sold a too high a price (not one of the criteria under the WTO of which India is a member; see my post, “Dueling Sitars”).

I think Novartis pushed the case under a policy of defending its patents universally and know first-hand that corporate legal departments are combative.  Novartis may have wanted a ruling to set legal precedent in advance of other patent disputes it may have in India, although I haven’t seen any reports of pending cases.  As for an effect of the ruling on access to affordable medicines, I don’t see much of one.  For the Indian generic drug companies, they may be able to copy and sell more of the MNC drugs that fall within this narrow category of drugs that received patents on minor modifications.  But they should be concentrating on the many non-patented but essential medicines in short supply in India and elsewhere by improving their manufacturing and distribution systems.  As for the MNCs, they will continue to participate in a number of donation/at-cost programs to gain access and experience in emerging markets (see the Access to Medicines Foundation’s recent Index for a rating of companies’ performance).

More importantly, the MNCs seem to be serious about competing on price in the developing world markets.  Several years ago, Gilead licensed a number of its HIV drugs with technology transfer to Indian and South African generics companies that lowered prices on the licensed drugs and put price pressure on competing, non-licensed versions.  As announced in 2009, Glaxo-SmithKline has priced its drugs at 25-30% of list in developing world markets.  In 2010, the CEO of Sanofi stated the company’s emerging markets strategy included competing with generics companies on price and increasing local manufacture (see my post, “Patent Non Grata?”).  The company recently announced it was starting up four new manufacturing plants in China (for a total of ten) and starting to build a third plant in Vietnam at a cost of $75 million (FiercePharmaManufacturing article).  As I have posted previously (e.g., “Knickers in a Twist”), patents and patent cases are less important in providing access to affordable medicines than companies seeking market share and to the extent that governments and NGOs can help create markets, for example, by building functional health care systems and transparent regulatory and approval regimes, the better.  A “victory” in improving world-wide access to medicines will require much more than court rulings.

*I noted that Novartis anticipated loss of patent coverage on Gleevec and declining profit and invented a more potent drug, Tasigna, that was approved in the US in 2007 (Bloomberg article).

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Dueling Sitars

The recent back-and-forth between the government of India and several of the multinational pharmaceutical companies (MNCs) led me what the outcome may mean for the role of the MNCs in the rest-of-world (ROW, non-US/EU) markets.  As some of you may know, the Indian Patent Office and courts are taking a hard line about the novelty, and therefore monopoly value, of several of the MNCs’ newer blockbuster drugs (those that command per patient per treatment course prices in the tens of thousands of dollars and generate more than $1 billion in annual sales).  Recently, a court acknowledged Roche’s patent on its cancer drug, Tarceva, but ruled against its suit for infringement against Cipla, a major Indian generic company, whose drug it said was similar but different from Tarceva (FiercePharma article 1).  Also recently Novartis completed its Supreme Court appeal of a lower court denial of its patent to Gleevec/Glivec, another big-selling cancer drug, on the basis of non-novelty; a decision is expected in two months (Reuters article 1).  Earlier this year, the Indian patent authority issued a compulsatory license order that would allow Natco Pharma, an Indian generics company, to make its version of Bayer’s Nexavar, another cancer drug, on the basis that Nexavar was not “reasonably affordably priced” (Health.India.com article), the rub being that price is not one of the factors under international trade laws for issuing a compulsatory license (Economic Times article).

The motivations and objectives of both sides aren’t obvious to me.  The Indian pharmaceutical market, while large among ROW countries (about $12 billion), is composed of 90% generic sales (Reuters article 1), so patented drugs are not big money-makers.  Novartis, whose generic drug sales are only about 16% of its annual sales of $58 billion (Sandoz products), and the other MNCs must either expect a lot of growth in the patented part of the market and significant increase in self-pay or insured patients (about 15% of India’s 1.2 billion people have health insurance) or the MNCs have another concern.  Perhaps, the MNCs want to protect their lucrative US/EU markets from Indian “similar-but-not-identical-and–therefore-not–infringing” versions of their patented best-sellers, but their friends at the regulatory agencies will require any company claiming to sell a novel drug to submit data supporting it, an expensive undertaking.  Perhaps, the MNCs want clarity in Indian patent law to set the stage for license negotiations with the generic companies who may make good partners for MNCs wanting to enter emerging markets.  The Indian companies sell most of their production in ROW countries and therefore may have a broader and deeper distribution channels than the MNCs.  One example is HIV/AIDS where 92% of all HIV/AIDS drugs are made by Indian companies, some under licenses from Gilead and other innovator companies, and almost all are sold to public health organizations.  And the Indian companies may see themselves as a lower-cost alternative to the MNCs’ own generic drug divisions.  Yusuf Hameid, chairman of Cipla, one of the largest Indian pharma, has proposed India have a “pragmatic” compulsatory licensing program and has said Cipla is willing to pay a 4% royalty to the licensor company (Forbes interview).

As for the government of India, its chief concern should be to generate economic growth and an improved tax base to be able to meet the health needs of its many poor, as well as the expectations of a growing middle class and many employers who want an affordable health care system (not the 18% of GDP we pay).  Hence, it, or more likely a few offices within its massive bureaucracy, may be trying to both bludgeon the MNCs with sticks like patent fights and compulsatory licenses and entice them with carrots into greater interest and involvement in India.  The government is in a position to increase the generic part of the market since 40% of the population is poor and receives drugs through the public health system, if at all, and greater government drug spending and insurance programs have been advocated by a task force (Health.India.com article).  In July, the government announced a commitment to spend about $5.4 billion over the next five years to buy generic drugs to be given away through the public health system (Reuters article 2).  But more recently, it proposed that the prices on all imported drugs be determined by actual product costs as they are domestically produced and sold drugs (FiercePharma article 2).  So this may be not much of a carrot for the MNCs.  Another carrot is allowing foreign companies to invest in or acquire domestic drug companies, and the government, which previously approved 49% foreign ownership of domestic companies, recently approved 21 investment proposals by foreign drug companies worth $433 million but with the stipulation that the domestic companies cannot raise prices on their current drugs for five years (Reuters article 1).  This may be to encourage the domestic/MNCs to grow their exports and keep domestic drugs affordable.  Again, not much of a carrot.

An interesting sideshow to all this is that India has a large “active pharmaceutical ingredient” (API) industry and its members supply about 20% of the raw ingredients for global drug manufacturing, but the number one supplier is China, thanks to lower costs and possibly less regulation (Business Today article).  The Indian government wants the MNCs to recognize their industry’s higher quality (unlike China most of its manufacturers have USFDA approval) and use them rather than Chinese companies, but doesn’t seem to realize it may be alienating its best customers.

Most of the MNCs already recognize the benefit to partnering with Indian companies and have been building up their research and development labs in India, and some are committed to offering lower prices in India and other ROW countries.  GSK prices all its drugs sold through its emerging markets group at 25% of their “retail” price in the UK, Novartis has a Gleevec donation program now supporting 30,000 patients worldwide including 15,000 in India, and in a pilot program, Roche sells its patented cancer drugs at a substantial discount to the government of Brazil with the stipulation they be given to patients without cost (Financial Times article).  But none of these actions are much help to the Indian government’s effort to service its poor given their small scale.

What could be an optimum outcome for both sides?  My thought is that the Indian generic drug makers, the API industry, and the government should make it really attractive for the MNCs to contract with the companies to invent low-cost drugs for India’s domestic market and for export to the world’s currently under-served and under-resourced people.  This would require lots of innovation, but not necessarily through the typical MNC research and development aimed at drugs that can be sold at high prices (to justify the expensive R and D).  This innovation would be in manufacturing, combining and re-purposing existing drugs, packaging, delivery (route of administration), and distribution.  There good examples of this type of innovation leading to lower cost drugs, in HIV/AIDS drugs for one, the key factors of which were subsidized purchasing by national and international groups, drug companies seeking new markets competitively, and a neutral party to guide the deals (the Clinton Foundation Drug Access Team).  It seems to me the Indian government would be better off trying to build on this model rather than poking the MNCs over patents.

Window Dressing

Last week on October 26, a new organization was launched that will accelerate the development of new treatments for global health, or so it was said.  With much fanfare (and a webcast), WIPO, the World Intellectual Property Organization (WIPO), one of the 16 specialized agencies of the United Nations (whose hyperbolic tagline is “Encouraging Creativity and Innovation”), BIOVentures for Global Health (BVGH), other prominent organizations, universities, and pharma companies launched a “consortium” called Re:Search (BVGH press release).  As I understand it, Re:Search is not the kind of consortium whose members combine money, personnel, and effort toward a common goal, but is a “voluntary endeavor” to “to encourage and support research and development of Products [sic] for NTDs [neglected tropical diseases]” (Guiding Principles).  While Re:Search will include, at some point, a Partnership Hub and Supporting Activities (details not given), the only function up and running is a searchable database of “available intellectual property [IP] assets, information, and resources” provided by the pharma companies, NIH, and others.  The idea is that academic researchers and companies will license the big pharma leftovers and, my assumption, use them to write publications (academics) or develop global health products (companies).  As a few readers may remember, I have posted on a similar effort managed by BVGH, the Pool for Open Innovation Against Neglected Tropical Diseases (NTD Pool, NTD Pool) (“Checking the Pool’s Temperature,” 5/26/11) and on the NTD Pool’s predecessor, a database of 800 patents provided by GlaxoSmithKline (GSK) and Alnylam (“Swimming in the Patent Pool,” 10/5/10).

In my previous posts, I noted a number of problems that limited the pools’ usefulness and, after reading through the Re:Search site (Re:Search) found the same problems:

  • academic researchers don’t need licenses since no patent-owner will seek an injunction against research (bad publicity and a damage award would be zero);
  • although the licenses are to be royalty free, the rights are limited to the least developed countries (the LDCs are listed) and the “neglected tropical diseases” (NTDs also listed), tuberculosis, and malaria; hence  major opportunities, both in terms of public health and in making a profit, are excluded.  For examples, Chagas disease is a listed NTD but none of the countries where it is endemic except for Haiti are LDCs (Mexico, Central America, and South America have  8 to 11 million people infected, CDC Chagas).  Similarly, dengue is endemic in at least 100 countries in Asia, the Pacific, the Americas, Africa, and the Caribbean with 50 to 100 million infections yearly, mostly among children (CDC Dengue) and fewer than half are on the LDC list.  The Re:Search Guiding Principles acknowledge this problem and request that licensors “consider in good faith the issue of access to these products for all developing countries” (Guiding Principles), but good faith consideration only goes so far.  And the focus on NTDs ignores the fact that non-infectious disease (e.g., heart disease, diabetes, cancer) are major health burdens in the developing world;
  • licenses will be negotiated on a case-by-case basis, meaning lots of lawyers, time, and money will be required; and
  • there is no requirement to provide the stuff that is really needed for product development.  As stated in the Principles, “physical materials, regulatory data or know-how, including information relevant to manufacturing” are not necessarily available.  All assets are provided and licensed at the providers’ discretion.

I checked out the Re:Search database (Search) and found it pretty limited, containing a total 140 items, 63 of which are from companies and most of the rest from NIH.  Individual items have lots of data fields for useful information, but most fields are blank.  I looked at the Preclinical Candidates category, in which there are 16 entries, all from AstraZeneca (AZ) or Esai, and most are identified as potential inhibitors of noninfectious disease pathways, which is OK but not encouraging as starting points for NTD drugs.  In the Resources category, GSK and AZ are offering guest researcher positions at their facilities to guest researchers and funding for projects (GSK), but apparently these are not for people from companies.  I’m sure the intent is to add to the database, but right now it is slim pickins.

I also noted that it looks like BVGH scored some contractual money from WIPO since it will be the “Partnership Hub Administrator” and will be responsible for helping interested persons find “available licensing and research collaboration opportunities, networking possibilities, and funding options.”  I’m guessing this means BVGH will host more conferences with nice receptions, but since the orientation of Re:Search is research at non-profit institutions as opposed to product development by low/no-profit companies, I don’t see how it fits with BVGH’s mission “to engage companies to drive partnerships and invest in global health initiatives” since the “investment” by the big pharma providers is negligible and small companies and startups are not welcome.  I also noted that my alma mater, MIT, is involved in some way, but they are not listed as a provider, user, or supporter.  A collaborator without commitment or consequence?  As I have noted before, pools of IP available for licensing for global health product development are a nice start, but without commitment of all the needed information, technical expertise, and funding and an orientation toward commercialization, they are pretty useless.

Well, I hope all involved enjoyed their trips to Geneva last week.

Checking the Pool’s Temperature

As my regular readers know, I have written several times on the concept of open source innovation for the discover and development of the products for neglected diseases (e.g., posts of 10/5/09, 8/5/10, 3/10/11) and about one of the more important efforts to make this concept reality:  the Pool for Open Innovation Against Neglected Tropical Diseases run by BIO Ventures for Global Health (NTD Pool).  While the Pool is a good step forward in making potentially useful compound-specific intellectual property (IP) available (and at no cost) to open-innovators, I have three major concerns:

  • the licensing terms lack incentives, that is, they are non-exclusive (good for protection against an infringement suit but useless for raising money), limited to the least developing countries (not the low- and middle-income countries with growing middle classes to provide revenue), and will not be granted if the IP contributor is using, or considering using, the IP for itself;
  • the licenses do not come with access to data and know-how needed to make the IP useful; and
  • there is no provision of samples of the compound(s) of interest and related family members to verify the data presented in the IP.

Since I had not seen any mention of the Pool and its activities recently, I visited the site to see what progress was being made.  The licensing polices have not changed and as far as I can tell and the Pool is not being utilized or its use is being promoted.  One important aspect of the open source innovation concept is the building of a community of users who share their perspectives and results and accelerate discovery.  Examples of drug discovery community-building efforts are those run by Collaborative Drug Discovery (for medicinal chemistry at CDD Public) and OpenClinica (for clinical trials at OpenClinica Community).  I did not see a similar effort at the Pool site and, while one can submit a request to be involved as a user or contributor (Pool Get Involved), my experience is that there’s no one at the other end.  I also noted that the last press release was in August 2010 which announced that Medicines for Malaria Venture (MMV) has joined the Pool as a contributor, not a user (Pool press release), and, as I asked in a previous posting, why not, if the Pool is such a valuable treasure trove of potential anti-malaria drugs?  Of course the MMV knows, as do the other product development programs (grant-supported, neglected-disease-specific, drug discovery and development organizations), that the IP in the Pool is just the starting point.

I did a quick search to find any users of the Pool and what they may be doing and did find an article on one group that illustrates that searching the Pool is just the start to finding a testable compound.  A Genetic Engineering News article of last November describes a collaboration between iThemba Pharmaceuticals, a South African biotech (iThemba), and Emory University’s Institute of Drug Discovery (EIDD), headed by the famous/infamous Dennis Liotta (see 3TC patent dispute), to search the Pool for possible polymerase inhibitors, the Institute’s area of expertise (GEN article).  They found six groups of interesting compounds, met with GSK scientists to get an update of where GSK was in their development, and more recently, signed an agreement to talk with GSK scientists more (EIDD press release).  Not at the licensing and technology transfer step yet.

Granted it has only been a bit more than two years since the Pool was initiated by GSK’s donation of malaria-drug IP and a year since BVGH took over its administration, but I think there should be more activity by now.  My ideas:  figure out why more PDPs and biotechs are not using the Pool, run workshops to show how user-friendly it is, and advertise its use and success.  Apparently BVGH has realized that they need to a better job of promoting the Pool and is hiring a Senior Director, Commercialization and Alliance Management (BVGH Careers); however, this fortunate person will also have a number of other responsibilities.  I look forward to hearing about the Pool’s utilization in the future.

Open Source Sesame

One concept for accelerating the development of drugs for neglected diseases (i.e., those whose treatment is not reimbursed by insurance companies) is application of the “open source” innovation model which originated the software industry.  This model is based on easy access to source code, distributed work among unaffiliated programmers, and rights to use (and sell) derivative products to produce usable and useful programs quickly and at low-cost (c.f., Open Source Initiative).  Last week, the folks at the Center for Global Health R and D Policy Assessment, a subgroup of the policy contract firm, Results for Development Institute, made public their draft study of the topic, “Open Source for Neglected Diseases” (CGHRDPA Report) and invited comment.  While the report is a good start, I opine that it doesn’t address the fundamental limitations of the open source approach as applied to drug development and, as I have written about the Center’s previous two draft assessments (my posting of 12/9/10), doesn’t reflect the years of experience of the biotech/pharma industry in playing the drug development game.

First, the good start is that the authors do a laudable job of covering a large and diverse field of ideas and efforts, and their summary of the open source “initiatives” on pages 6-9 and 19-20 is comprehensive but lacks, as the authors later note (page 17), an assessment of the initiatives’ output and cost effectiveness.  The authors also missed two software platforms that are available and are being used for neglected disease drug development, specifically, HEOS by Scynexis (Scynexis and my posting of 11/4/10) and OpenClinica by Akaza Research (OpenClinica) and an initiative, the Distributed Drug Discovery Project at the University of Indiana/Purdue University (D3).  The report also dwells too much on the supposed barriers of patents in early stage drug development, although the authors do note that there is considerable debate on this topic and the IP challenge may be a “theoretical problem.”  I think patents on research tools and methods are unenforceable in early-sage research and, if the patent-holder attempts enforcement on products, may be found invalid (as with the University of Rochester vs. Pfizer, c.f., Science article).  Moreover, I think that, if the patent was based on government-funded research, it should be licensed royalty-free for all neglected disease drug discovery and, if not, it should be ignored until public opinion stimulates reasonable licensing.

I disagree with the authors noting the utility of an open source approach to the later stages of drug development is “not clear.”  I’d say “not relevant.”   The open source approach is really only applicable to the discovery of drug candidates, or molecules that may result, after lots more testing in animal and humans, manufacturing process development, and regulatory approval of both, in a drug.  Clearly this is the most expensive part of drug development and therefore requires the greatest investment and at least break-even economics and the open source approach accounts for neither.   The authors mention a role of the approach in decreasing overall drug development costs (“A factor of five decrease in new drug costs, for example, shifts the landscape – and therefore the viability of collaborative and open source approaches“ on page 14), but do not offer any substantiation.  Their analysis of these economics would be helpful.  They also point out that Mauer et al. (Mauer et al. 2004) propose that the results of open source early-stage drug candidate discovery could feed into the neglected disease product development programs (PDPs), a logical idea but one that the PDPs haven’t supported over the intervening years, preferring, less effectively in my mind, to give grants to a small number of academic groups, typically those headed by members of the PDPs’ science advisory boards.

As an aside, I got a sense of the cost-efficiency of the tools available for drug discovery last fall when I met young man at the Medicines for Neglected Diseases Workshop who had used online structural data bases of targets and compounds to identify a series of candidates for treating dengue fever (my post of 9/16/10).  Andrew Navia, still a junior at Lexington High school, did the work for a state science project competition (“Molecular Modeling of Viral Protease Inhibitors: Focus on Dengue Fever,” Mass S and E Fair), but then he may have had help from his father, Manuel Navia, a renowned structural biologist and founder of several companies (Navio Bio).  Hey- I helped my kids with their science projects, too.

Another weakness of the open source approach that the authors do not address is that in effective drug development, at least as I experienced it, the early stages are informed and guided by continuous input from those responsible for the later stages, a positive feed back loop.  In open source, the distributed workers are likely to follow their own direction since they are not really invested in the final outcome and so may be highly ineffective.  Finally, as I mentioned above, I wonder if the opinions of industry drug developers may have been helpful.  The authors point out there is a need for identifying “clear metrics of ‘value’” and a “business case” for the open source approach (page 16), but, other than referring to the now-dated and limited case studies by BIOVentures for Global Health, give no insights that may have been provided by those whose paychecks depend on finding drugs.  I noted that of the 10 interviewees quoted in the report only two had industry affiliations.  Finally, I found the report’s recommended next steps pretty timid.  The first two (evaluating existing initiatives and developing value propositions) should be within the scope of the report and the third (a website for sharing) seems duplicative.  My opinion is that the open source approach for neglected disease drug discovery has merit, in part because it piggy-backs on the tremendous public investment in biomedical research and enables  participation in neglected disease research by many scientists who want to see their work result in social good but who are not rewarded for it.  I also think the open source approach should be encouraged and supported by those that may benefit from its output (the PDPs and companies looking for new drug candidates) but need help to figure out how to make this happen.

Patent Non Grata?

Almost lost in the recent buzz about Sanofi-Aventis’s potential $20 billion purchase of Genzyme was an interesting comment made by Sanofi’s CEO, Christopher Viehbacher.  As noted in the FiercePharma newsletter, he believes patent-protected products are dangerous to Sanofi’s health (FiercePharma Dirty Word).  More specifically, Viehbacher said he wants to find businesses where products are protected by mechanisms other than patents to avoid the steep revenue drops when drugs come off patent, a major problem for big pharma (Forbes article and AP article).  My interpretation:  rather than depending a few blockbusters (which will go bust), a big pharmaceutical company should diversify over a range of products, including generics, accept slower but smoother revenue growth, and be ready to on price and value.

Profits without relying on patent monopolies is Business 101:  build brands and customer loyalty, enter or create new markets, and invent new products that meet a need at an attractive price.  In the AP story, Veiehbacher cited Sanofi’s “emerging markets” strategy, particularly in the so-called BRIC countries (Brazil, Russia, India and China), which accounts for 30 percent of Sanofi’s sales, and he expects this action to double to $18 billion by 2013.  The company is also competing on price, made possible in part by local manufacture:  “We can produce as low-cost as any Indian generic company.”  I’m interested to see if Sanofi will be willing, ready, and able to compete with the Indian companies outside the BRIC market in Africa and Southeast Asia.  My guess is that he has a new business team running the numbers right now.

Viehbacher became Sanofi’s CEO in late 2008, leaving a top position at GlaxoSmithKline (GSK), and it may be not coincidence that his vision includes diversification away from patented products, low-cost manufacture, and new market entry.  GSK, as I noted in my posting of January 28, 2010, has my vote as the leading big pharma in building a global health business.  Abbas Hussain, GSK’s president of its emerging markets business summarized the company’s emerging market strategy for the online Harvard Business Review which included the statement:  “The pharmaceutical industry must balance the drive to build a sustainable business through increased market share, volume, and profits with a global commitment to work with governments and other stakeholders to support efforts to deliver our medicines and vaccines to as many people as possible.”  (HBR Blog).  Could not have said it better myself.

Unfortunately, this line of thinking is lost on the academic/government/NGO complex which seems fixated on patents and patent-holders as barriers to access to essential medicines.  Members have been beating this drum for a number of years, most recently as I noted in last week’s posting, by advocating for Unitaid’s patent pool concept.  Access to drugs depends on many other factors other than access to patents.  A more measured approach to improving big pharma’s drug access activities is the Access to Medicines Index, a ranking of companies put together by a Netherlands-based non-profit funded by Gates and the Dutch and UK governments among others (Access to Medicines).  While I haven’t read the Index through, it looks to be comprehensive, covering 27 companies (20 innovators and 7 generics) and using a total of 106 indicators that measure activity in four strategic and seven technical areas.  NB:  GSK is their number one.

Another company that has demonstrated that a licensing-based approach to revenue is a good substitute for a patent-based approach is Gilead.  As described in a recent article in the journal of the American Enterprise Institute (caveat needed) and mentioned in my posting of last week, Gilead has nonexclusively licensed one of its antiretroviral therapeutics, Viread, to 13 Indian drug manufacturers, several of whom are providing competitively-priced drug in the developing world markets.  And this despite the Indian government’s denial of Gilead’s patent application for the drug (American article).  Gilead gets a 5% royalty on sales in new markets and licensees monitoring those markets for counterfeits; the licensees get a top-quality product with manufacturing technology transfer and support of regulatory filings.  And those proving the treatment get more drug options.

In building their global health markets, big pharma may be finding patents are personae non gratae.