Eal etc. presentation de 30_sep06

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  • 1.
  • 2.
  • 3.
  • 4.
  • 5.
    • Universities Allied for Essential Medicines
    • University of Pennsylvania
    • September 30, 2006
    University-based approaches to ensuring access to medicines
  • 6. Caveats
    • Striking the balance between complexity and accessibility
    • Stop me!
    • HIV exceptionalism
  • 7. Defining the problem
    • Adequate drugs and diagnostics simply do not exist for many neglected diseases
    • Even where drugs and diagnostics do exist, prices in developing countries are often out of reach when the market is not competitive
    • Even where prices are affordable, other barriers to delivery exist (human resources, infrastructure, management capacity)
  • 8. Price Disparity Across Markets $270 $330 $705 $300 $250 $460 $840 $120 $390 $480 $1,580 $3,560 $3,540 $1,930 $540 1 st -Line ARVs 2nd-Line ARVs Low-Income Countries Middle-Income Countries Average NVP regimen EFV ABC ddI TDF LPV/r SQV RTV Disparity driven largely by originator price discrimination; Potential prices are even lower than LIC prices for drugs that lack robust generic competition
  • 9. Consequences for developing countries *World Health Organization. http://www.who.int/medicines/services/essmedicines_def/en/
  • 10. ARV Price Comparison: 3TC+d4T(40)+NVP January 2006 Branded Best Price $562 Generic List Price $290 $562 $192 October 2003 Branded Best Price Generic List Price
  • 11. Effect of generic competition on market prices
  • 12. Other problems associated with originator market exclusivity
    • Untimely product launch
    • Heat-stable LPV/r
    • Tenofovir
    • Unreliability of supply in single-source situations
    • Barriers to innovation
    Pricing is not the sole concern with respect to patent-protected market exclusivity: do not equate access with low prices
  • 13. Features of generic competition Generic competition produces superior outcomes Economics (cost advantages, competition) Innovation (eg, FDCs, pediatric formulations) + + Quality
  • 14. Potential university role in promoting generic competition
    • Increasing rates of university patenting and licensing post-Bayh-Dole: roughly two-fold increase 1993-2003
    • 4 of top 10-12 antiretroviral compounds were developed at universities (d4T, 3TC, FTC, ABC)
    • Recent report found that 15 of the 21 drugs with the most therapeutic impact emerged from university research
    • Out-licensing to biotech & pharmaceutical companies for downstream development creates moment of opportunity
  • 15. Case study: Emory Univ. and Emtricitabine/Tenofovir
    • Case study will be presented in greater detail tomorrow
    • Emory developed Emtricitabine (FTC) and licensed the compound to Gilead for development
    • Gilead linked FTC with Tenofovir (TDF) in a fixed-dose combination called Truvada that proved very successful
    • Gilead and Royalty Pharma recently bought Emorys rights to royalty stream for $525 million
  • 16. TDF/FTC: Under-realized potential Originator $370 Potential generic $140 Price comparison $190 Leading first line regimen
    • TDF is a wonder drug:
    • - Low toxicity
    • - Potentially dominant 2nd line drug in near term
    • - Potentially dominant 1st line drug in medium term
    • - Potentially widely used prophylactic in long term
    • Unbridled generic competition is essential for TDF (+ FTC) to realize full potential
  • 17. Current situation in the TDF market
    • Possibility of patent protection in key countries such as:
    • India
    • Brazil
    • China
    • Patent opposition in India
    • Gilead voluntary licenses to Indian suppliers but with restrictions
    Pricing will not be as low as is achievable due to restrictions, in market where every $ matters Yet this outcome represents close to the best possible outcome in absence of ex ante university-pharma agreement
  • 18. Potential university approaches
    • Description of possible approaches
    • Rely on potential for government march-in
    • Address access concerns and seek exceptions post-launch and only upon activist pressure (as with d4T)
    • University non-patenting in Low and Middle Income (LMI) countries
    • Potential ex ante agreements with licesee (pharma or biotech):
      • Equitable Access License (to be discussed)
      • Fair pricing provisions
      • Provisions stipulating voluntary license program meeting certain minimum standards
      • Other means of retaining some discretion for licensees?
    Ex post Ex ante
  • 19. Equitable Access License (EAL) overview
    • Basic idea: Means of maintaining open door for robust generic competition
    • Deals with three basic hurdles: patent, regulatory/data, and production capacity
    • Major benefits include simplicity and ease of administration, maximum flexibility for generic producers, and wide coverage
    • Leaves relatively little discretion to university or licensee: self-executing rights, covers all LMIs, no eligibility (eg, quality) restrictions on suppliers, etc.
  • 20. EAL schematic: Cross-license and grant-back
  • 21. EAL schematic: Notification
  • 22. EAL schematic: Notifier improvements 4. Royalties flow to university and licensee
  • 23. Objections to the EAL
    • Known and suspected objections
    • Lost revenue
    • Lack of leverage/lost deals if individual universities adopt EAL alone; big disincentives to first movers
    • Anti-trust concerns if universities move toward EAL in concert
    • EAL-specific concerns:
      • Lack of discretion over licensed suppliers
      • Lack of discretion over companies
      • Limited discretion re: license terms
    • Usual concerns about generic production as general matter:
      • Parallel importation
      • Quality and legal liability concerns
      • Fear of price/cost transparency
      • Loss of revenue will force cut-backs in R&D because R&D costs will not be recouped
    Universities Pharma
  • 24. Changing strategic considerations for pharma
    • Parallel importation poses severe risk to sales in developed nations
    • Substantial risk of legal liability if generic producers/licensees sell poor-quality product that produces adverse clinical events
    • Fear of cost transparency
    • Revenue loss will compromise R&D
    • Public pressure to reduce prices via generics in LMIs can be withstood
    • Excess manufacturing capacity can be allocated to developing world demand
    • No benefit to be gained from licensing to generics
    Initial perspectives
    • Little empirical evidence of widespread parallel importation
    • Increasing confidence in quality standards among leading Indian generic manufacturers, coupled with expanded WHO and FDA quality assurance
    • Costs have become quite transparent, at least in HIV/AIDS sphere, with only modest increase in public pressure on pricing in developed nations
    • Disingenuous claim from beginning
    • High levels of public pressure on pricing in LMIs, and generic competition difficult to avert entirely
    • Little desire to invest in new manufacturing capacity to serve rapidly growing low-margin developing world demand
    • Potential strategic benefits to voluntary licensing: new sources of intermediates/API, and significant potential for grant-backs of process improvements
    Emerging perspectives