Stimulating medical R

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Stimulating medical RD when inventions enter the
public domain

• James Packard Love
• CPTech
• _________________
• CIPP Workshop on Intellectual Property,
  Biotechnology Capacity and Development
• Buenos Aires
• 25 September 2006

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Basic ideas

• Separate markets for innovation from markets for
  products
• Allow generic competition for products, driving
  prices closer to marginal costs of manufacture
  and distribution
• Create new systems of finance for innovation,
  including (1) rewards for successful product
  development that are not tied to product prices,
  and (2) new methods of financing open
  collaborative science projects
• Create new global trade framework to address free
  rider problems, and to raising funding for global
  health care priorities

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Current focus

• Promote use of prizes to reward innovations that
  improve health care outcomes
• The United States market for prescription
  medicines
• Rewarding inventions for health care problems of
  patients and communities with low incomes
• Countries with large internal markets India or
  Brazil
• Investigate possible role of competitive
  intermediaries to support open collaborative
  research projects
• Change focus of trade agreements from specifying
  IPR regimes to addressing minimum levels of
  support for RD
• Inclusive in terms of mechanisms. All systems to
  support RD addressed, including traditional
  public sector funding, rewards for success
  innovations, competitive intermediaries, etc.

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Some key dates

• September 18, 2002, Ottrott-le-Haut, France.
  Aventis Radical IP scenarios
• January 26, 2005, Rep. Sanders introduces HR 417
• February 24, 2005, Request to Evaluate Proposal
  for New Global Medical RD Treaty
• May 27, 2006. WHA resolution Public health,
  innovation, essential health research and
  intellectual property rights towards a global
  strategy and plan of action
• December 4-8, 2006, 1st meeting of WHO
  Intergovernmental working group (IGWG)
• May 2008, WHA considers global strategy and plan
  of action

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Medical Innovation Prize FundHR 417 - 109th
Congress

• Annual funding of .5 percent of US GDP --
  approximately 60 billion per year
• Developers of medicines are rewarded for impact
  of invention on health care outcomes
• 10 year participation in rewards
• All products are open to generic competition
• Set-asides
• 4 percent (2.4b) for global neglected diseases
• 10 (6b) percent for orphan drugs and
• 4 (2.4b) percent global infectious diseases and
  other global public health priorities, including
  research on AIDS, AIDS vaccines, and medicines
  for responding to bio-terrorism

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Relationship between Medical Innovation Prize
Fund and Patent System

• Patent owners would not have rights to prohibit
  or authorize use and sale of products
• However,
• Patents would be factor in establishing ownership
  of inventions.
• Ownership of invention would create claims
  against Prize Fund (Prize fund payments are far
  higher than current royalty payments)

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Supply of QALYs
Size of prize fund
more elastic supply
less elastic supply
.75 of GDP
.50 of GDP
QALYs supplied
QALYs_50
QALYs_75
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Next steps on US prize fund

• New bill introduced in 2007. Some technical
  issues will be addressed, such as treatment of
  inventions that are developed at roughly the same
  time, or treatment of rewards for new uses of
  older medicines.
• Emphasis on expanding community of technical
  experts working on the proposal (economists,
  lawyers, research community, various
  stakeholders, etc).
• Fall of 2007. Begin serious effort to promote
  public debate on proposal.

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Essential Patent Pool Proposal

• Create pool for downstream use of patents on
  essential medical technologies.
• Create fund to provide rewards for inventions
  licensed to pool that improve health care
  outcomes.
• Possible extensions
• Agreement that developing countries that support
  reward fund can seek more liberal exceptions to
  IPR rules

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2005 Medical RD Treaty proposal

• New paradigm for trade negotiations -- focuses
  on RD rather than mechanisms to raise prices.
• Inclusive Recognizes the importance of public
  and private sector RD funding, and different
  mechanisms to stimulate RD
• For example
• Strong IP, high prices
• Weak IP, low prices, public sector funding
• Alternative incentives systems
• Focuses on capacity of country to support RD
  costs
• Flexibility in terms of mechanisms
• Creates global system of tradable credits as
  incentives to fund RD in areas of priority.

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Treaty mechanisms overview
Treaty Secretariat
Country A
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Treaty Supporters
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