By Daniele Dionisio
Author’s summary: The newly launched HIV Medicines Alliance (HMA) initiative commendably seeks enlarged brand, generic industry collaboration to optimize, enhance access to HIV treatments by developing world populations. But it raises concerns about implications for the freedom of India’s pharma companies, good faith in helping the greatest number of patients, and impact on the Medicines Patent Pool. These compound criticism that, as a lip service move to get rid of the Pool, HMA could fall short of a staunch commitment to affordable prices and availability.
A pharmaceutical industry initiative, the HIV Medicines Alliance (HMA) to optimize and enhance access to HIV treatments by developing world populations, was launched in London on 2-3 May 2012 at a stakeholder meeting gathered by the Wellcome Trust. This brought together representatives of originator companies, WHO, UNAIDS, CHAI, MSF, UNITAID, the Medicines Patent Pool, advocacy groups, donors, clinicians from Africa and other key stakeholders.
Participants met again on 21-22 June in New Delhi, to informally discuss and articulate the HMA vision as laid down early June in a draft charter showing some flexibility on brand industry’s part . As per its terms, multinational corporations (MNCs) are invited to share in-kind support and patented products royalty-free to developing countries under arrangements with generics companies.
The HMA effort is commendable as regards openings to enlarged partner collaboration to make HIV medicines more widely available. But it raises concerns about implications for India’s pharma companies’ freedom, good-faith to help the greatest number of patients, and impact on the Medicines Patent Pool (or the Pool), a trustworthy group with a similar but highly demanding mandate.
The Pool invites patent holders to offer the intellectual property (IP) related to their inventions. Any company in either low- or middle-income countries that wants to use this IP to develop antiretrovirals for HIV (or ARVs) can seek a license from the Pool against the payment of royalties. Expected benefits encompass, through increased competition, substantially lower prices for cutting-edge second- and third-line patent pool-generated fixed-dose combination (FDC) ARVs.
As such, while the Pool has inked licenses with Gilead Sciences and the US National Institutes of Health (NIH), Johnson & Johnson (J&J), Merck and Abbott corporations have unfortunately declined to enter negotiations. This is concerning because the participation of these companies in the Pool is necessary for generic companies to deliver appropriate antiretroviral (ARV) formulations.
In this connection, while the HMA plan stands as awareness that the Pool is unlikely to be a self-sufficient solution, it concurrently meets the brand industry’s reluctance to give up their IP rights via the Pool to the advantage of competing industries in the middle-income countries.
But, will the HMA plan also meet transparency and needs-driven, open source requirements the World Health Organization is calling for as regards models to ensure long-term access to medicines? Disappointingly, the WHO delegation at the May meeting in London was very slim (only one representative) as compared with oversized delegations from the brand industry and pro-big pharma organizations, including all companies that have declined to negotiate with the Pool.
And, astonishingly, only two Indian firms were present, while the Global Fund was apparently excluded, as were those Indian companies, like Cipla and Natco, fiercely opposing MNCs control.
Not the least surprising, the information currently available allows us to infer that the HMA strategy will mainly rely on royalty-free voluntary license bilateral agreements as already experienced in trade deals between the brand and generic counterparts worldwide. Unfortunately, a number of constraints limit the voluntary license model potential since the originators are granted full control over the manufacturing, distribution and pricing steps: an unbalanced, unfair mechanism. Inherently, it is worth remembering that J&J recently inked, only with Hetero Drugs Ltd., Matrix Laboratories Ltd. of India and Aspen Pharmacare of South Africa, a rather narrow voluntary license agreement in terms of geographical scope .
And there’s more.
HMA could fall short of a staunch commitment to affordable prices. Indeed, commitments in the draft charter mentioned before state that innovator companies will work to apply the lowest possible prices, while generic manufacturers will apply “… the lowest possible sustainable prices, recognizing our obligation to provide a fair and equitable return on investment to our shareholders”.
This is not the same as fixing prices poor populations can afford.
The New Delhi location of HMA’s June meeting is intriguing since India is home to most of the world’s generic production, at a time when the MNCs are looking to the country as a fast-growth market where 300 million people can afford out-of-pocket spending on healthcare . Unaffordable prices are being charged by MNCs for lifesaving new patented drugs in India, where they are steaming ahead with nonstop acquisitions of firms and takeover deals, as a strategy whereby lower prices applied to end products are offset by lower manufacturing, distribution and marketing costs.
And pharmaceutical sales are expected to reach US$30 billion by 2020 in India, compared with $11 billion in 2009, according to PricewaterhouseCoopers forecasts.
These insights are to the point now that India’s obligations to the WTO prevent the Indian companies from making generics for medicines introduced since 2005. And they add to TRIPS-plus policies [going beyond the 1994 WTO Agreement on Trade-Related Aspects of Intellectual Property Rights] pursued by the US and EU, which protect monopolistic interests at the expense of unbiased access to lifesaving medicines (read further here, here, here and here).
Aside from recent bold moves by the Indian government, these trends are likely doomed to get worse in the medium-term. As a result, the Indian pharma companies could unfortunately be restricted, under close control of drug giants, to an almost exclusive role as a sophisticated R&D arm.
The overall insights here raise concern that HMA lacks transparency, and support criticism that, as a lip service move to get rid of the Pool, HMA could fall short of a staunch commitment to affordable prices and availability.
These questions are crucial at a time when just under three billion people live on less than US$2 per day in resource-limited countries where key medicines protected by patents are unaffordable. (Read the WHO publication for further reference.)
Daniele Dionisio is a member of the European Parliament Working Group on Innovation, Access to Medicines and Poverty-Related Diseases; head of the research project Geopolitics, Public Health and Access to Medicines (GESPAM); and an advisor for the Italian Society for Infectious and Tropical Diseases (SIMIT). He can be contacted at email@example.com