Inventions Innovate Thyself

To accelerate the discovery of an affordable AIDS vaccine and other crucial health resources, experts say they will need to invent new ways to use intellectual property

By Philip Cohen, PhD

Last summer, AIDS vaccine aficionados turned their attention to Brazil partly for the science and partly for the spectacle. The science emanated from the 3rd International AIDS Society Conference on HIV Pathogenesis and Treatment where the presentations had a strong focus on a wide array of prevention strategies: from circumcision and diaphragms to vaccines. The spectacle was provided by the continuing war of words between Brazil's government and the American pharmaceutical company Abbott over its patent for the antiretroviral (ARV) Kaletra.

Brazil had announced plans to manufacture a cheaper generic form of the drug (which is also known as lopinavir/ritonavir), arguing that Kaletra's high price was making it impossible to reach their treatment goals. The country's health minister forged an agreement with the company to respect the patent in return for a cut-rate price-but then he promptly resigned. The new health minister announced he had to rethink the agreement. Local AIDS activists and at least one other government official at the IAS conference openly criticized the deal as too costly.

After many months of heated negotiations, a new deal between Brazil and Abbott was finally reached in October. Shortly after, another battle between a government and Big Pharma grabbed the headlines. This time Taiwanese officials-driven by fears of a potential bird flu outbreak- threatened to produce a generic version of Roche's influenza drug Tamiflu if the company did not grant a license by the end of the year. Roche began discussion over a licensing deal, but decided it could supply the drug more cheaply than a Taiwanese company under a voluntary license. According to a November press release on the company's website, Roche will provide Taiwan with an additional 1.3 million treatments, making a compulsory license "unnecessary."

These public struggles illustrate an issue that has long been on the minds of AIDS vaccine developers-the need for new ways to strike a balance between preserving the innovation incentives of intellectual property (IP) without sacrificing the affordability of new medicines.

Intellectual property describes a range of knowledge-based assets that give their owner exclusive ability to sell some product or service. The best known form of IP is a patent, a published description of an invention which grants its holder a legal monopoly for use or sale of that invention for a number of years. But some of the IP relevant to vaccine production can also be in the form of carefully guarded data or know-how, such as secrets about processes that allow vaccine production to be scaled up.

Most of the time you pay for some new technology, whether it's an iPod or antiviral, somewhere an inventor responsible for ideas or IP inherent in the device gets a bit of money. While consumers traditionally pay the price for IP, the rationale for its existence is that society at large benefits from financially rewarding creativity and innovation. The argument goes that without exclusive marketing rights secured by IP, companies would never embark on risky research towards innovative products because another company that didn't make the same investment could simply copy the final product and sell it at a lower price.

But the incentive of IP and other aspects of the market-driven system have failed to deliver some crucial health technologies. For one, the uncertainty of an adequate market for treatments or preventives for diseases that mostly afflict people in developing countries has failed to entice many companies to invest in research and development in these areas. In other cases medications are developed but, partly because of the IP involved, they are not available at prices within the budgets of countries where these health technologies are desperately needed.

Navigating the set of laws and contracts that define IP is infamously difficult. Even some experienced lawyers, for example, refer to the legal framework of patents as "the thicket." And if the legal status quo wasn't complicated enough already, IP laws are currently undergoing a wave of reform in the US (see box, below) and internationally.

IP The American Way

While the TRIPS treaty has been shaking up the global patent landscape, independently the United States has been busy revamping its own IP laws which could indirectly affect AIDS vaccine development. The Cooperative Research and Technology Enhancement Act, also known as the Create Act, was signed into law in December 2004. It allows companies and academic institutions working with research partners to share confidential information without jeopardizing future patent applications. Until now such disclosures could be considered "prior art" raising questions on the novelty of the technology- a reason patent applications can be denied. Protecting IP arising from collaborations is important since AIDS vaccine research increasingly involves different partners working together. In June, a bill called the Patent Reform Act of 2005 was introduced in the US Congress to modernize American patent law. The reforms, which are being hotly debated, are intended to streamline the resolution of patent disputes and bring the US system in line with international norms such as giving priority to the first person to file a patent, rather than the first person to invent. Some experts worry that if these reforms are enacted, companies will gain an upper hand over academic institutions in pursuing AIDS vaccine research. Using IP as incentive is a controversial component of proposed US anti-terror legislation known as Bioshield II. The idea is that in return for developing new antiterror tools a company would be eligible for a range of incentives, including "transferable" patent extensions which will not apply to the antiterror technology but, say, one of their best-selling drugs. The legislation specifically lists HIV as one agent that may be used as a weapon of mass destruction and HIV/AIDS vaccines as a terror countermeasure under the provisions of the act.

Brazil and Taiwan claim their rights to manufacture, respectively, generic Kaletra and Tamiflu under a World Trade Organization agreement known as the Trade Related Intellectual Property Systems (TRIPS) agreement. This agreement obligates developing countries to adopt minimum standards to protect IP rights in exchange for other trade benefits of WTO membership. A few years ago the possible impact of TRIPS on the affordability of medicine to developing nations became the focus of a major debate in the WTO. This resulted in the Doha declaration, which asserted that during a public health crisis developing countries have the right to grant "compulsory licenses", allowing local companies to produce medicines without permission from the patent holder.

But overall TRIPS is leading to a strengthening of intellectual property rights, which experts feel could have global implications for development of new therapies. For instance, Brazil's current ability to provide low cost ARVs to its citizens is the result of a network of pharmaceutical firms from developing countries that grew up with no tradition of patent protection and, for that reason, can supply drugs at bargain basement price. ARV treatment programs in Kenya, South Africa, Malawi, and Thailand similarly rely on a discounted global supply chain including Indian, Chinese, and Korean companies. But as countries adapt to the provisions of TRIPS, this situation is rapidly changing. Just this year India changed its laws to recognize patents on pharmaceutical compounds issued after January 1, 2005 and all TRIPS signatories need to revise their laws by 2016. One concern that now looms is that in the post-TRIPS world where unlicensed generics on new medications are illegal, drug costs could soar out of the reach of many poor countries.

TRIPS could hold similar ramifications for an AIDS vaccine. Vaccine designers often must incorporate existing IP into new vaccines and the holders of those patents may be entitled to royalties from the sale. For instance, the world's first genetically-engineered vaccine—against hepatitis B virus—required 14 patented components and royalties amounting to 13% of total sales. But vaccine production also depends on undisclosed know-how, which would make it harder for developing countries to produce the vaccine since these processes would need to be reverse engineered even if a local company resorted to a compulsory license to get around existing patents. Even so, companies worry that they could have the same sort of showdown over prices that Abbott now faces with Brazil, says Phillip Gomez, director of vaccine production at the Vaccine Research Center of the US National Institutes of Health. "I think one of the biggest fears some large pharmaceutical companies have is that they will own a successful HIV vaccine," he says. "They will then be under tremendous pressure to produce billions of doses to sell at next to nothing."

An AIDS vaccine might also represent special challenges for IP management, says Helen Kettler of the Bill and Melinda Gates Foundation. "Given the number and difficulty of the unanswered [scientific] questions, there is a critical need for greater collaboration and information-sharing across the HIV vaccine field, especially on issues related to early-stage vaccine discovery," she says. Also, she says that since developing countries are making significant contributions to the research and testing of vaccine candidates, ethics demand that they be rewarded for their efforts. She points out that these issues are why the plan for the Global HIV/AIDS Vaccine Enterprise pinpointed creating an "enabling environment" for IP as an important step towards accelerating progress.

So if IP represents a potential obstacle to the AIDS vaccine field, what's the best way to overcome it? James Love, director of the Washington-based Consumer Project on Technology, thinks that the best solution is to do away with the current system of IP entirely. Love has argued that public health would be better served by systems where essential public health research is publicly funded, monopoly protections of IP are suspended, and information is freely exchanged as in the open source software movement (PLoS Biol. 2, 147, 2004). "Historically it was a big, profound mistake to give inventors of new medicines an exclusive right to sell that medicine. It's not wrong to give them money, but it's wrong to give them a monopoly." As an alternative, he points to legislation recently proposed in the US Congress called the Medical Innovation Prize Fund which would set aside part of the US government's budget to pay enormous cash rewards to researchers who create certain innovative drugs or vaccines, but removes the monopoly protections of IP. "This way you divorce the market for the product from the market for innovation," he says. He admits that such a radical rewrite of health policy will take years to implement, and be fiercely opposed by companies, but thinks consumers will support the legislation.

But less drastic measures can overcome barriers that IP may represent to affordability, says Richard Mahoney who just completed nine months as the interim CEO of the Centre for the Management of IP in Health Research and Development (MIHR) in Oxford, UK. MIHR promotes innovative IP practices to address social and economics inequalities. He believes that some of the uneasy relationship that now exists between large companies eager to protect IP and governments, non-governmental organizations (NGOs) and other nonprofits such as public-private partnerships (PPPs), stems from the relative inexperience these public sector agencies have with IP. "If you work for the private sector, there are units of lawyers and business managers around you who worry about IP," says Mahoney. "But the discipline of IP in the public sector is very, very embryonic. It's mostly a large, dark space."

To help PPPs shed some light on IP, MIHR and the Initiative on Public-Private Partnerships for Health organized a workshop dubbed "Dealmaking and Intellectual Property Management for Public Interest" in November 2004. There, PPPs met to compare experiences brokering IP deals and learn from each other. "What was clear from all the case studies presented is that you can't have a general contract. Each one needs to be tailored for the needs of each partner," says Jerry Sadoff, president of the Aeras Global TB Vaccine Foundation, which hosted the event.

The fine details of such deals are rarely publicly disclosed, but based on case studies presented at the meeting Sadoff says almost every arrangement imaginable is being made. Even within Aeras Sadoff says the deals range from agreements with pharmaceutical companies who insist on maintaining all IP rights to vaccine candidates on which they collaborate, to other candidates for which Aeras owns all the IP and may license with companies for production. For TB vaccines for which his foundation doesn't own the IP, Aeras gets assurances for reasonable prices for developing countries or makes deals where vaccines will be purchased at an agreed price above the manufacturing cost, or the company agrees to license their technology for others to scale up production for developing countries. If there is some general lesson, says Sadoff, it's that with enough effort and enough lawyers on the payroll there is usually some way to address the IP concerns of both parties. "And if there isn't, then you walk away from the deal," he says. "And we've also done that."

Mahoney says that reaching agreements on IP between a company and a nonprofit may sometimes be easier than between two profit-making companies. "What the public sector wants is complimentary and non-competitive to what the private sector wants," says Mahoney. Companies by their nature are interested in the potentially lucrative markets for vaccines in developed countries, while nonprofits are concerned with supplying the vaccine to very poor countries where it may need to be sold at a much lower cost.

Gomez points out another way in which governments or PPPs and companies have complementary IP interests. "If we approach a company about working on HIV vaccines, we are only focused on HIV," he says. "So our agreements try to leave them free to use any innovation in another more profitable part of their portfolio, for example cancer, while still allowing our HIV product to move forward."

When it comes to IP for an AIDS vaccine, it's important to remain optimistic and be prepared for hard work, says John Barton, an emeritus law professor at Stanford University who recently spent a year at the NIH studying vaccine technology transfer issues. "I'm sure there will be problems assembling the IP package for an AIDS vaccine. And I'm sure they are solvable, because the imperative is so great."