CPTech statement on Pharmacia voluntary license for Delavirdine

January 24, 2003

"Today's announcement from Pharmacia is not so much about providing treatment as it is a proposal for managing patents on essential medicines.

"This is mostly about the future of the intellectual property regime in developing countries. Pharmacia is saying, with an example of an AIDS drug that almost no one uses, that AIDS drugs should be licensed on a non-exclusive basis to generic firms, for the poorest countries, or those with high infection rates.

"This should be looked at in the broader context of the WTO discussions over paragraph 6 of the Doha Declaration, where big pharma companies are trying to limit the scope of compulsory licensing to AIDS or cases involving the most grave public health problems. This is a signal from a member of the cartel that it is time to cut losses on patents on AIDS drugs, in order to protect the overall IP regime for other diseases. While making concessions in this area, Pharmacia is looking to preserve as much as possible the markets in middle income countries, many of which are excluded from the Pharmacia proposal, as well as for other diseases.

"The cost of this announcement to Pharmacia will be next to nothing, since the drug is not likely to be used in any case. But Glaxo will have to respond, as will every company with an AIDS product.

"Like ddC, Delavirdine is not widely used. Delavirdine has a daily dose of 1200 milligrams of active ingredient, and is probably more expensive to manufacture than Nevirapine or Efavirenz, the two drugs in its class that are typically used by people providing treatment in resource poor settings. MSF doesn't even include delavirdine in its ARV pricing surveys.

"The positive aspects of the pharmacia announcement are that it would apparently be a non-exclusive license available to any generic producers that can meet quality standards, it would have a 5 percent royalty, it would cover a large number of countries and patients, and we assume it will permit sales to the private sector (but this needs to be clarified). This makes the Glaxo/Aspen license look pretty bad. The Glaxo license was limited to a single firm, had a 30 percent royalty, and was limited to sales to the government.

"The negative in terms of a model is that it would exclude many developing countries, including many developing countries where it is possible to extend universal access to HAART treatment for AIDS patients. The Pharmacia model will not address the need to extend treatment in countries like Malaysia or Mexico, or to sustain access to medicines in countries like Brazil.

James Love, Director
Consumer Project on Technology

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