Researchers Propose New License For Drugs, Vaccines

Armen Hareyan's picture
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Important health care innovations, such as medications and vaccines, may not be readily available to low-income people in developing countries because of roadblocks formed by intellectual property rights. Researchers at Brigham and Women's Hospital (BWH) and Boston University School of Law (BUSL) propose a new type of license, which they call a "Generic Open (GO) License," that can lower prices for developing nations by promoting competition while preserving incentives to innovate. Details of the new license are published online January 8, 2008, and in the January/February print edition of Health Affairs.

In the article, the researchers-Kevin Outterson, J.D., LL.M. at BUSL and Aaron S. Kesselheim, M.D., J.D. of the Division of Pharmacoepidemiology and Pharmacoeconomics at BWH-propose applying the GO License in particular to the case of new cervical cancer vaccine, Gardasil. Ninety-three percent of global mortality from cervical cancer occurs in developing countries, where the health care infrastructure is less organized than in the U.S. and preventative care such as a Pap smear is harder to obtain. In those environments, a cervical cancer vaccine could be extremely useful, but there is still insufficient access to this innovation.

"Almost two years after the vaccine reached the market, it is still virtually unavailable in many low- and middle-income countries, especially for poorer women, which some have attributed to high prices set by the manufacturer and to other intellectual property-related hurdles," said Kesselheim.

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"Next year, about 250,000 women will die of cervical cancer in developing countries. The new cervical cancer vaccines won't save many lives unless they are actually delivered to the poorest women in the world at an affordable price. The recent donation of 3 million doses by Merck barely scratches the surface of the global need. With the GO License, Merck and GlaxoSmithKline can secure profits in wealthy countries while permitting wide access in the developing world," noted Outterson.

New drugs and vaccines are invariably the subject of patents, which grant the manufacturers who own the patents full control over the distribution of the products. During patent life, manufacturers charge high prices for their products and earn revenues that serve as an incentive for research and development. However, patents can also limit the distribution of certain drugs and vaccines when manufactures set prices above what developing countries can afford. Improved access to existing patented medications and vaccines in low- and middle-income countries could address worldwide public health issues such as AIDS and cardiovascular disease and save millions of lives each year.

"We propose the Generic Open License as a way to streamline licensing of new medical innovations so that these patented products can become more rapidly available in developing countries while allowing manufacturers to make reasonable revenues," Outterson said.

The GO License addresses some of the limitations inherent in current models for making patented medications and vaccines available to developing countries. Examples of such models include compulsory licenses, which are politically sensitive and unpopular with manufacturers, and voluntary differential pricing, which is often not transparent and doesn't involve robust competition. The Generic Open License would not be mandated, but would be available to accelerate the negotiation process between patent holders and local producers by containing a pre-negotiated royalty rate in order to allow products to reach a worldwide audience quicker. The terms of the Generic Open License would help ensure that manufacturers' revenues in wealthier markets such as the United States are not affected.

"Basic equity principles dictate that we try to help improve the health care available to underserved people across the world, and we can accomplish a great deal simply by working to make the same products that we have access to equally available in these settings. Licensing mechanisms that promote rapid low-cost access to important new health care innovations, such as the Generic Open License, can help accomplish these goals," concluded Kesselheim.

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