CPTech Statement on Roche/Gillead licensing of Tamiflu Patents

5 November 2005

James Love
cell 1.202.361.3040

1. Roche has clearly exaggerated and mislead government officials about the difficulties of manufacturing generic Tamiflu (oseltamivir phosphate). Government officials like US Health Secretary Michael Leavitt or Australian Health Minister Tony Abbott have relied upon this self-serving inaccurate information, and rejected measures that would enhance the public's security. From here on, government officials must be held to a higher standard, and be expected to do some measure of independent due diligence. It's their job to be right, not simply gullible, when preparing for a possible pandemic.

2. There are many different entities that could play an important role in expanding the supply of oseltamivir, including businesses that are motivated by profit opportunities. So long as there exist legal clouds over the ability market generic products, rational investors will hesitate.

3. Roche has had plenty to time to figure out what its options are regarding the licensing of the patents. There are too many potential suppliers to undertake individual negotiations with each company. Roche needs to simply identify the relevant terms it will impose on generic suppliers and offer open licenses to anyone who can comply. The Roche licenses should be simple, covering only a few items. Roche needs to say what the royalty will be for sales in different geographic markets. They don't need to address the issue of product quality, other than to possibly require that generic suppliers satisfy national regulatory requirements. If Roche is concerned that some countries have inadequate regulatory mechanisms, they should invite the WHO to qualify generic suppliers, like the WHO does now for generic AIDS drugs. (The public will have more confidence in the WHO than Roche for this task.)

4. Roche should not restrict generic sales to the stockpile market. Roche has cut off private sales in many countries. Consumers should have the opportunity to buy this drug, and Roche is clearly unable to address the demand for the product. Government stockpiles are clearly non-existent or inadequate in most of the world. The Roche prices are also unaffordable for consumers in developing countries.

5. If Roche does not act now, governments should issue the appropriate compulsory licenses in order to assure the competitive generics sector they can legally sell generic copies of the drug. Further delays by governments are not helpful, and increasingly hard to defend.

6. Governments that do issue compulsory licenses need to consider the appropriate remuneration schemes for the patent owners. CPTech recommends a different system for royalties for government stockpiles than for private sector sales. A system of contingent royalties for government stockpiles should be considered, as CPTech has proposed (James Love, October 28 2005, "A better way of stockpiling emergency medicines," Financial Times, http://www.cptech.org/ip/health/tamiflu/love10282005.html or with subscription: http://news.ft.com/cms/s/253d4b12-474f-11da-b8e5-00000e2511c8.html).

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