Report: Civil Society meeting on the Medicines Patent Pool (MPP) and voluntary licenses

On 9 – 10 November 2012, the Treatment Action Campaign (TAC), SECTION27 and the Medicines Patent Pool (MPP) brought together global treatment activists to discuss guiding principles and access maximising provisions for terms and conditions that should be sought in the licenses negotiated by the MPP and others.

By reaching civil society consensus on a number of key issues and setting terms and conditions to be sought in licenses, civil society will have a tool to campaign around, as well as to assess future licenses negotiated by the MPP as well as other voluntary licenses negotiated by pharmaceutical companies.

During the meeting, CSOs reached consensus on the following key issues covered in voluntary licenses:

1. Geographical scope
2. Royalties and royalty terms
3. Technology transfer
4. Manufacturing and use of active pharmaceutical ingredients
5. The right to manufacture fixed dose combinations and other formulations
6. Regulatory approvals (quality assurance, data exclusivity, national registration)

The following issues were also discussed, however consensus was not reached:

7. Grant back royalties
8. Pending patent applications
9. Quality assurance requirements

Discussion documents on each of these three issues will be developed as a guide for further discussions aiming to set guiding principles and access maximising provisions to be sought in licenses.  These will provide background for a follow-up meeting to be held in the first half of 2013.

The following issues were also highlighted, to be further discussed in the follow-up civil society meeting:

10. Provisions relating to compulsory licensing
11. Patent oppositions
12. Parallel importation
13. The role of the MPP in enforcing its licences

In addition, it was agreed that voluntary licences are one mechanism among many that exist to address IP-related access constraints.  A separate document outlines some of the other strategies discussed at the meeting while acknowledging that they need to be further fleshed out and developed by civil society.

Agreed Provisions

Attendees agreed on guiding principles and access maximising provisions for the terms and conditions of voluntary licenses.  These provisions were developed in three groups, and then brought back to and agreed by the plenary.  Many of the conclusions, particularly in relation to the geographical scope of licences, included strategic considerations.
GEOGRAPHIC SCOPE OF LICENSES
Guiding principles and strategies

1. Public statements and documents from CSOs should demand 100% coverage for all L/MICs, and be maximally expansive. The strongest possible mandate from CSOs helps the Pool negotiate stronger licenses, and public documents that stratify countries or compromise on geographic coverage could form a ceiling for drug companies.
2. There is a huge range of difference between countries, and CSOs recognise that negotiating “100% coverage” agreements will be exceedingly difficult until the Access Movement is much stronger.
3. Access for poor people in MICs with huge disparities in access to medicine based on economic inequality should be a priority focus. Tools to explore may include intra-country differential pricing based on various factors e.g. public vs. private, geography, urban vs. rural, through a particular channel.
4. CSOs often have more influence over governments than drug companies. Governments often have more power over Big Pharma than CSOs. CSOs can influence governments to put pressure on recalcitrant pharmaceutical companies..
5. Companies are using voluntary licences (VLs)—especially secretly negotiated VLs—to divide and conquer.
6. CSOs discussed advocacy strategies that push governments into our corner to create a stronger, unified demand from both governments and civil society for the least restrictive VLs possible, linked to credible threats to use stronger TRIPs flexibilities.
7. The quality of MPP deals is tightly correlated with the effectiveness of the global access movement. MPP has too little leverage on its own, and needs tighter linkages to global movement and more sophisticated strategies to win.

Access maximizing provisions and strategies

Rather than countries being excluded by strict stratification by income levels, the MPP’s VLs should be negotiated on terms that prioritize improving access for poor people with HIV, including, in particular, MICs according to the following strategies:

• Differentiation between public and private sector (inclusion of at least public sector incl. NGO sector in MPP-VL)
• Tiered royalties (MICs can pay higher but still reasonable royalties) prioritization of MICs with high disease burden, high income inequality based on Gini index and poor access to treatment.
• CSOs can stand more strongly with the MPP and more effectively pressure drug companies if MPP provides more real-time information about existing or anticipated negotiating obstacles from the companies.
• CSOs asked the MPP to clarify its relationship with civil society, and urged the MPP to recognise itself as accountable to communities of poor PLHIV worldwide.
• A stronger access movement will equal a stronger MPP, which will equal better VLs. Together, we must renew sustained collective global and complementary national action campaigns, but funding for movement groups is an issue. Newer, critically needed drugs in the pipeline and not yet under patent in some countries like dolutegravir were identified as a strategic priority.
• In addition to company campaigns, CSOs discussed the need for campaigns to win better IP policies from governments. One strategy that emerged was to campaign to win letters from national governments to drug companies that demand all products be put in to the MPP under very detailed and expansive terms and conditions. CSOs can then hold governments to the standards set out in such a letter, and derail nasty closed-door private VLs. The Pool can use the letters to demonstrate a stronger, more specific mandate from countries and CSOs; terms and conditions below which the MPP cannot agree.

ROYALTIES AND ROYALTY TERMS
Guiding principles:

• Where there is no patent or patent application claimed in either country – the country of manufacture or the country of importation – then no royalty will be paid.
• No royalties should be required from LDCs, except when there is evidence of upstream reasonable royalty costs to third parties. In these cases these costs must be fully disclosed.
• The MPP must seek the minimum reasonable [flat rate] royalty with experimental efforts to augment rates where necessary/useful to expand the scope of licenses to upper middle countries.
• No royalties will be paid on any paediatric forms of medicines.

TECHNOLOGY TRANSFER

Guiding principles:

• Transfer of know-how will not be linked to claims of territorial exclusivity or to royalties. Know-how should be offered but licensees should not be required to take it. If a licensee takes the know-how there should be no requirement that it is used by the licensee.
• Technology should be transferred as early as possible to facilitate generic entry. This shall include technology that enables full development, registration and manufacturing of the medicine on a commercial scale.
• The need for additional intensive technology transfer shall be negotiated on a case-by-case basis.
• Royalties are paid on the final product. No additional royalty will be paid on transfer of know-how.

MANUFACTURING OF ACTIVE PHARMACEUTICAL INGREDIENTS

Guiding principles:

• If there is no product patent on the active pharmaceutical ingredient (API), then no provisions on API should be included in the API license.
• If there is a patent on the API, then the general principle of non-discrimination should be applied to the license – there should be no restrictions on production, supply and purchase of APIs.
• There must be no restrictions on the supply of APIs under a CL.
• The license provisions should encourage tech transfer for the manufacture of APIs.

THE RIGHT TO MANUFACTURE FIXED DOSE COMBINATIONS (FDCS) AND OTHER FORMULATIONS
Guiding principles:

• There should be no patents on fixed dose combinations (FDCs), dosages or other formulations – as such patents seek to extend monopolies at the expense of public health.
• The MPP should make clear that patents on FDCs, dosages, and forms should not be encouraged. However, where there are blocking patents, then the following principle should apply:

• No restrictions: licenses must provide for the maximum right to manufacture FDCs, dosage and other formulations.

• The MPP should make public a patent analysis of FDCs and other secondary patents.

Access maximising provisions:

• No royalties should be provided on FDCs, dosages, and other formulations that are covered in the license.

REGULATORY APPROVALS (QUALITY ASSURANCE, DATA EXCLUSIVITY, NATIONAL REGISTRATION)
Guiding principles:

• Support quality assurance
• MPP should review ways to ensure that quality assurance does not become a barrier to new producers
• MPP and UNITAID should work with others to support drug regulatory authorities (DRAs)
• Principle: there should be no data exclusivity
• Selection criteria – open to all generic manufacturers who can demonstrate intention/ capability to produce e.g. national GMP compliance or equivalent national authority

Access maximising provisions:

• Express waiver of any data exclusivity or patent linkage registration claim for both originator and generic. Originator to provide all data necessary to generic for registration

In addition, it was agreed that it is very important that terms and conditions of all licences be made publicly available.