During the COVID-19 pandemic discussions around increasing access to medicines for low and middle-income countries (LMICs) were often centred on compulsory licensing. As a result, pharma companies were up in arms about protecting the intellectual property (IP) of their innovative medicines. But there is an alternative, says Charles Gore from Medicines Patent Pool (MPP). Voluntary licensing is a model that fosters beneficial outcomes for patients and companies alike.
Voluntary licensing, a procedure by which innovators license their IP to global partners, who then sub-license to generic manufacturers to produce affordable versions for a wider population, has already been getting treatments to patients in LMICs for some time. One successful example were Gilead’s patented HIV treatments, brought to developing countries through a deal engineered by MPP, a United Nations-backed organisation working to increase access through voluntary licensing. In a recent Pharmaboardroom interview, Charles Gore, the organization’s executive director, discusses the benefits of voluntary licensing not only for patients in developing countries, but for the pharma industry as well.
Getting Industry Onboard
When MPP was first set up in 2010 by Unitaid, an organisation housed within the World Health Organisation (WHO), to address the need for affordable HIV treatments to LMICs, voluntary licensing was still a novel concept. The challenge for MPP was to get pharma companies to understand the model.
[Voluntary licensing] was a new idea [in 2010] and companies felt they were giving away intellectual property (IP)
Charles Gore, Executive Director, MPP
“It was a new idea and companies felt they were giving away intellectual property (IP). Therefore, we had to communicate that it was not about them giving away IP, but instead, reaching people they otherwise would not reach with a version of their product that has the same quality but is made much more cheaply by generic manufacturers without the overhead costs of developing the drug. Furthermore, the products are for markets that do not compete with the originator’s primary commercial market,” he says.
If we have five generic companies producing the same drug, that gives authorities a lot of power to push the prices down
One of the ways the voluntary licensing model increases access is by lowering prices in the developing world. Gilead’s HIV treatments, for example, saw a price drop of more than 80 percent. When several generics manufacturers compete against each other, patients benefit from their lack of a monopoly, says Gore: “As these are now generic products, what we do is give licenses to several manufacturers so that they compete against each other. What typically happens in many high-income markets is that the originator has a monopoly, making it very difficult for a government to negotiate. However, if we have five generic companies producing the same drug, that gives authorities a lot of power to push the prices down.”
Beyond lowering prices, voluntary licensing can be a faster way of making innovative medicines available to LMICs. By signing a voluntary licensing agreement, generic manufacturers do not have to wait for patent outcomes to start producing a drug. “For the MPP, the speed at which we can license drugs is a critical factor. If it takes a long time to put new products on the Essential Medicines List, they often do not have much patent life left and the generics can begin producing soon anyway – so the initiative becomes less useful. What we are trying to do is to get new drugs that are patented into low- and middle-income countries as soon as possible – trying to essentially shrink the gap between when they are available after they first become available in high-income countries,” says Gore.
Not only can the drug reach these countries faster, but the process also saves the companies holding the IP a lot of work, Gore claims: “When we do this, it saves the originator company from doing all the registrations and efforts that come with selling in those countries.”
Assurance for Originators
Having a good access program creates dollars and cents value in addition to having an impact on things like recruitment and staff turnover
One of originators’ main concerns with respect to this model is that if they grant a license to sell in low- and middle-income countries, they don’t want their drug to end up being sold in key markets like the US or Europe. The MPP has developed a monitoring system to insure voluntary licenced drugs are destined only to their specific markets.
“We have developed an advanced alliance management system. We monitor every single pack using export and import databases as well as direct reporting from the generic companies on a per pack basis to determine where everything is going. In general, the generic companies tend to operate according to these terms, but they may partner with a distributor who might then try to sell outside the designated market. In this case, we alert the manufacturer and they either stop working with the distributor or tell them they cannot sell into other areas,” Gore claims.
Quality assurance is another core concern the MPP pushes to insure, says Gore: “Our generic companies need to get approval from a stringent regulatory authority for the product. This might include WHO pre-qualification or the US FDA when appropriate.”
Arguing for the benefits for industry, Gore concludes: “Having a good access program creates dollars and cents value in addition to having an impact on things like recruitment and staff turnover.”