Universities Allied for Essential Medicines
Approximately ten million people die needlessly each year because they do not have access to existing medicines and vaccines.1 This access gap stems from several factors, including unreliable health care delivery systems, insufficient public financing for health care, and high prices for medicines.2 High drug prices result in large part from the temporary monopolies granted to pharmaceutical companies through patent and regulatory systems.3
Recent history has shown that promotion of generic competition within low- and middle-income (LMI) countries is the most effective way to lower drug prices.4 A global policy facilitating generic competition in poor countries would have little impact on the profitability of large pharmaceutical companies, which derive only five to seven percent of profits from all LMI countries.5 While it might be desirable to address these issues through systemic intellectual property reform, existing international trade frameworks make such reform unlikely.
Our proposal centers around the role Penn can play in closing the access gap. Multiple studies have confirmed that university research is vital to the development of new medicines.6,7,8 Penn has consistently ranked second nationwide in funding received from the National Institutes of Health; in fiscal year 2004, total research funding was $756 million.9 Meanwhile, the institutional principles of the University are well-aligned with the goal of improving access to medicines globally. Our strategic plan mentions the goal of improving “the quality, impact, visibility, and translatability of Penn’s academic research and scholarly activity.”10 Penn’s Center for Technology Transfer explicitly states that its chief objective is to “commercialize Penn research discoveries for the public good.”11
We believe that Penn has a remarkable opportunity to take a leadership role among universities by pioneering some important changes that will narrow the access gap.
We propose that the University of Pennsylvania make both general and specific alterations to its intellectual property policies. The general alteration is the adoption of the official resolution that improving global human welfare is the most important goal of university technology transfer. To satisfy this principle, we submit the following specific policy proposals:
- Penn should adopt licensing provisions that facilitate access to its health-related innovations in poor countries; and
- Penn should promote research on neglected diseases that principally impact the global poor (where market forces fail to stimulate research and development) and find ways to work with nontraditional partners that seek to develop medicines for those diseases.
We advocate humanitarian licensing provisions known as ‘Equitable Access Licensing.’. An Equitable Access License (EAL), when applied to a university technology transfer agreement, facilitates generic competition in poor countries by providing open licenses guaranteeing third-party manufacturers the right to compete in low- and middle-income country markets, regardless of patents or other forms of exclusive rights (such as regulatory barriers). Click here to read the EAL [pdf].
In addition, we advocate the institution of policies to promote neglected-disease research. Specifically, we recommend that the University facilitate participation in innovative research activities such as public-private partnerships (PPPs) and promote projects that hold potential for neglected-disease drug development.18 This includes: ensuring that no barriers exist precluding university scientists from accepting research funding from PPPs, proactively monitoring university innovations for potential neglected-disease applicability, and lowering intellectual property hurdles for the neglected-disease research arena.
It is important to note that Equitable Access Licensing works by segmenting the world market—any drug developed using an upstream university innovation can remain under patent protection in countries where the pharmaceutical industry earns the vast majority of its revenue. Generic competition is allowed only in markets where there is little access—and therefore little revenue—in the first place. For any given product, then, a pharmaceutical company’s bottom line remains relatively intact, and, by extension, any decrease in revenue from licensing at Penn would be vanishingly small. A quick look at the numbers for Penn’s licensing revenue and total research budget during fiscal year 2004 – $11.9 million19 and $756 million, respectively – shows that Penn’s research mission would not suffer any ill effects from these changes.
In fact, aside from any intangible benefits Penn might derive from being a leader on an important humanitarian issue, there are reasons to believe that Penn may gain financially by adopting our proposals. First, as the EAL is written, Penn stands to gain a small but significant revenue stream from its share of royalties for generic end products that would otherwise not be sold in poor countries. Second, combining access-oriented licensing policies with an augmented neglected-disease research agenda can help Penn aggressively position itself as a research center for foundation-sponsored partnerships. The burgeoning field of public-private partnerships for global health research has attracted over $1.2 billion in funding from sources such as the Gates Foundation, the vast majority of which is contracted out to research scientists.20
The University of California-Berkeley has recently (October 2005) begun marketing its ‘Socially Responsible Licensing Initiative’ as a way to attract some of this nontraditional funding and has already signed a handful of deals with foundations and nonprofits under that licensing rubric.21 We have even loftier aspirations for our own University: by implementing the proposals outlined here, we believe Penn can break new ground in defining the role universities can play in closing the global access gap.
1 World Health Organization. Equitable access to essential medicines: a framework for collective action. Geneva: 2004.
2 Quick, JD. Essential medicines twenty-five years on: closing the access gap. Health Policy and Planning 2003; 18(1):1-3.
3 Commission on Intellectual Property Rights. Integrating Intellectual Property Rights and Development Policy.
London: 2002. p.51. http://www.iprcommission.org/papers/pdfs/final_report/CIPRfullfinal.pdf
4 Medecins Sans Frontieres. Surmounting Challenges: Procurement of Anti-Retroviral Medicines in Low- and Middle-Income Countries. Geneva: 2003.
5 Pharmaceutical Research and Manufacturers of America. Pharmaceutical Industry Profile 2005 – From Laboratory to Patient: Pathways to Biopharmaceutical Innovation. Washington, DC: 2005.
6 Cohen WM et al. Links and Impacts: The Influence of Public Research on Industrial R&D. Management Science 2002; 48(1): 1-23.
7 Klevorick AK et al. On the Sources and Significance of Interindustry Differences in Technological Opportunities. Research Policy 1995; 24(2): 185-205.
8 Jaffe AB. Real Effects of Academic Research. American Economic Review 1989; 79(5): 957-70.
9 Office of the Vice Provost for Research. http://www.upenn.edu/research/ResearchStatistics.htm.
10 Building on Excellence: The Leadership Agenda. http://www.upenn.edu/provost/strategic_plan.html
12 Petersen, M. Lifting the Curtain on the Real Costs of Making AIDS Drugs. New York Times, April 24, 2001.
13 McNeil Jr. DG. Yale Pressed to Help Cut Drug Costs in Africa. New York Times, March 12, 2001.
14 Bristol-Myers Squibb, Press Release. Bristol-Myers Squibb Announces Accelerated Program To Fight HIV/AIDS in Africa. March 14, 2001. http://www.prnewswire.co.uk/cgi/news/release?id=64424.
15 World Health Organization. Scaling up antiretroviral therapy in resource-limited settings: Treatment guidelines for a public-health approach. http://www.who.int/hiv/pub/prev_care/en/arvrevision2003en.pdf. Geneva: 2003.
16 Humanitarian Licensing Working Group, Science and Intellectual Property in the Public Interest Program, American Academy of Arts and Sciences. http://sippi.aaas.org/SIPPI%20Humanitarian%20Use%20Report%20-
%20July%202004.doc. Washington, DC: 2005.
17 See http://www.tmgh.org/
18 Chokshi DA. Universities should foster neglected-disease work. Nature (letter) 2005; 435(143).
19 Penn Center for Technology Transfer. Annual Report, FY 2004.
20 Widdus R and White K. Combating Diseases Associated with Poverty. Initiative on Public-Private Partnerships in Health. Geneva: 2004.
21 Office of Intellectual Property and Industry Research Alliances, University of California-Berkeley. Socially
Responsible Licensing at UC-Berkeley. http://ipira.berkeley.edu/docs/sociallyresponsible10-05.pdf.