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Health Technologies: South Africa Socially Responsible Licensing Of Health Technologies: Policy And Practice In By Rabogajane Busang, Karine Boisjoly-Letourneau, Bernard Fourie, Michelle Mulder, and Harry Thangaraj been extensively discussed in the literature. By in- he objectives of Socially Responsible Licensing cluding SRL clauses in an agreement, the IP owner (SRL) are mainly to ensure that licensing of will ensure that the license does not impede public Tintellectual assets is negotiated and transacted access to essential technologies, such as health
in a manner conducive to providing access to essential technologies, agricultural technologies, "green" medicines and other life enhancing innovations. The or "renewable" tech- goals of SRL are to make available to society globally, nologies with local and ■ Rabogajane Busang, but in particular to developing countries, such tech- global environmental South African Medical nologies at affordable prices benefits, etc., and that 1 and to make proprietary Research Council, Division research tools widely available for the advancement the transactions lead Manager, Technology Transfer of knowledge. This can be achieved by adopting to a lasting social ben- Cape Town, South Africa licensing practices which add a dimension of social efit. IP owners should responsibility to the pursuit of economic objectives, ensure that their licens- without necessarily compromising the latter. This ing policy and practices promote access to es- approach does not affect business transactions in ■ Karine Boisjoly- sential healthcare tech- developed countries where significant profits can Letourneau, Université de nologies for developing still be achieved2 but ensures access for the least countries. Countries Sherbrooke, Sherbrooke, developed countries, which are often disregarded with financial and in- in commercialization strategies due to perceived tellectual resources E-mail: karine.boisjoly@ low profitability.
should help those that Although SRL has been a topic of discussion in are relatively resource many publications and seminars, there has been poor. From a moral ■ Dr. Bernard Fourie, very little practical implementation in most of and ethical perspec- Medicine in Need South the developing countries to date and SRL remains tive, publicly funded Africa (Pty) Ltd., Director largely a theoretical issue. This paper seeks to pro- and non-profit organi- of Medicine, Pretoria, vide background on recent developments in South zations need to ensure Africa relating to SRL practices, specifically the that their proprietary E-mail: b.fourie@ newly enacted legislation on intellectual property knowledge benefits (IP) emanating from publicly funded research, and underprivileged popu- some practical South African case studies showing lations, since support ■ Michelle Mulder, South how SRL strategies can be implemented to address derives from generous African Medical Research health needs in developing countries.
taxpayer contributions Council, Manager IP and The Need for Socially Responsible Licensing
and philanthropic fund- Business Development, The benefits of socially responsible licensing have ing, unlike shareholder driven imperatives in Cape Town, South Africa the corporate sector. E-mail: michelle.mulder@ SRL practices will also 1. Mimura Carol, Technology Licensing For The Benefit Of contribute significantly The Developing World: Uc Berkeley's Socially Responsible Licens- ■ Dr. Harry Thangaraj, to the alleviation of the ing Program, p.16. Online: http://www.autm.net/AM/Template. burden of disease in the Infections and Immunity developing countries, Research Centre, St George's especially with regard University London, 2. Yale has earned between 1994 and 2000 over $261mil- to neglected diseases. lion in royalties from Zerit® sales, DEMENET Philippe, The High London, United Kingdom Cost of Living. Online: Le Monde Diplomatic http://mondediplo. There are many more benefits of SRL and in- Health Technologies: South Africa stitutions need to start adopting SRL practices as part for affordable drugs in developing countries. Some of standard licensing policy and practice. institutions in South Africa have already started adopt- Background on Socially Responsible Licensing
ing SRL practices when carrying out IP transactions, The need for facilitated access to essential medi- driven largely by their institutional policy, type of cines for developing countries has not always been disease addressed by the invention and the willing- prioritized by university licensing practices. Prior to ness of a licensee to make concessions with regard to developing countries. The incorporation of SRL the Zerit® case, the main objective when licensing clauses in IP transactions has been at the discretion new technologies was the pursuit of profit. Since of the IP holder and motivated by a moral obligation the Zerit® case, much attention has been directed to ensure broad and affordable access to essential towards the impact of exclusive licensing on access medicines. With the enactment of the Intellectual to the products of university research, particularly in Property Rights from Publicly Financed Research and the medical field. Development Act4 (IPPFRD Act), passed in December In 2001 Médecins Sans Frontiers (MSF) approached 2008 but brought into effect in August 2010 with Yale University, the owners of the patent relating to the proclamation of the associated regulations, it has the drug Zerit® (stavudine), a drug which forms part now become compulsory for institutions that develop of the "triple cocktail" effective in the treatment of IP from publicly funded research to ensure that the HIV/AIDS, and asked if they would allow generic ver- IP is protected and commercialized for the good of sions of the drug to be imported into South Africa to the people of South Africa, i.e. to incorporate SRL provide treatment free of charge to people living with practices in all such IP transactions. HIV/AIDS and unable to afford it. Yale answered that In other parts of the world, there have been a lot of it could not respond to that request because it had developments on SRL practices. Universities, mainly issued an exclusive license to Bristol-Myers-Squibb in the United States, have developed guidelines for (BMS) and hence their approval was necessary. This the implementation of SRL. In their article, "Using generated much controversy and criticism towards Academic License Agreements to Promote Global the licensing practices of the university whose Social Responsibility,"5 authors Ashley Stevens and technology transfer objectives included the benefit April Effort from the Office of Technology Transfer of society in general. In June 2001 BMS signed an at Boston University discuss frameworks intended to agreement not to sue with Aspen Pharmacare, a guide licensing policy and practices in universities. generics company in South Africa, allowing them Their eight main recommendations include: to produce stavudine.3 This case raised awareness (i) Require developing country developments amongst universities and private companies on the with milestones to ensure this goal is reached; need for SRL practices, and the adoption of broader (ii) Require developing country developments policy within their technology transfer frameworks and specify pricing structure (i.e. at cost or to enable such practices. The case also demonstrated cost plus pricing) also accompanied by the need for affordable medicines for diseases such as HIV/AIDS in developing countries like South Africa (iii) Include desired outcome (i.e. humanitarian and the importance of embracing SRL to address the purpose) in the license agreement and burden of disease in these countries. reserve march-in rights if desired outcome Although South Africa has relatively limited manu- facturing capacity with regard to pharmaceuticals, it (iv) Exclude developing countries from license; is increasingly becoming involved in drug develop- (v) Grant non-exclusive rights in developing ment, testing and commercialization. Thus South Africa plays a dual role in the SRL arena, being (vi) Grant license but exclude right to patent in both a recipient country requiring access to drugs developing countries; for diseases such as HIV/AIDS and tuberculosis (as (vii) allow mandatory sub-licensing/ march-in demonstrated by the Zerit® case), and a developer rights if humanitarian objectives are not of IP on new drugs required in developing coun- tries. By embracing SRL practices, South Africa can play an important role in addressing the need 4. Intellectual Property Rights from Publicly Financed Research and Development Act 2008, No. 51 of 2008.
3. Supra note 2.
5. Supra note 1. les Nouvelles Health Technologies: South Africa (viii) include non-assertion of patent rights in optimal benefits to the economy and quality developing countries. The IPPFRD Act, of life of South Africans, and which is discussed below, contains some iv) exclusive licence holders must undertake, lements which are similar to these recom- where feasible, to manufacture, process and mendations and guidelines developed by otherwise commercialize in the country. universities around the world. The Act goes further in terms of ensuring maxi- The New L egislation in South Africa:
Intellectual Property Rights from Publicly
mum public benefit by stipulating in section 11(1) Financed Research and Development Act
(e) that the State should be granted an irrevocable (IPPFRD Act) of 2008
and royalty-free licence authorizing the State to use or have the IP used throughout the world for the As mentioned above, the IPPFRD Act contains health, security and emerging needs of the Republic a number of conditions relating to SRL policy and and, in section 11(1) (f)—(h), that if the holder of practices. This becomes clear at the beginning of the an exclusive license is unable to continue with com- Act in section 2, which outlines the object of the Act, mercialization of the IP in the Republic, the recipient which is to make provision that IP emanating from of public funds for research (the licensor) should publicly funded R&D is identified, protected, utilized provide the National IP Management Office (NIPMO) and commercialized for the benefit of the people of with full reasons for retaining exclusivity, should they South Africa, whether it is for a social, economic, wish to do so. NIPMO may request that the exclusive military or any other benefit. In terms of section 2, license be converted to a non-exclusive license if the the Act also seeks, amongst others, to ensure that recipient fails to furnish reasons or if NIPMO is not i) the recipient of public funds assesses, records satisfied with the reasons. and reports on the benefit for society of Section 11(2) should be read together with section publicly financed R&D; 14, which provides for the State march-in-rights. ii) the IP emanating from publicly financed R&D Section 11(2) provides that each IP transaction is protected and made available to the people must contain a condition to the effect that, should of the republic; and a party fail to commercialize the IP to the benefit of the people of the Republic, the State is entitled iii) the people of the Republic, particularly to exercise the rights contemplated in section 14. small enterprises and broad based black Section 14 requires NIPMO to conduct reviews on economic empowerment (BBBEE) entities, non-commercialized IP and, should the review indi- have preferential access to opportunities cate that the IP in question can be commercialized, arising from the production of knowledge NIPMO must engage with the recipient of public from publicly financed R&D and the resultant IP. funds to ensure that the IP is commercialized. NIPMO The emphasis on small enterprises and BBBEE may require the recipient to grant a licence to any entities seeks to promote local economic growth person on reasonable terms if such IP is still not and redress the economic imbalances of the past by commercialized or no agreement can be reached with ensuring that black empowered companies benefit the recipient. Section 15 provides further conditions from publicly financed R&D. with regard to exclusive licensing and public benefit. According to section 11 of the Act, the recipient of In terms of Section 15(1), a private entity may be- public funds must take the following conditions into come an exclusive licensee of intellectual property account when carrying out IP transactions, emanating from publicly financed R&D if such private i) preference must be given to non-exclusive entity has the capacity to manage and commercialize the intellectual property in a manner which benefits the Republic. Section 15(3) provides that, should ii) preference must be given to BBBEE entities the private entity mentioned in section 15(1) not and small enterprises, commercialize the IP, the State march-in-rights of iii) preference must be given to parties that Section 14 will apply. Private companies wishing seek to use the IP in ways that provide to obtain an exclusive license for IP from publicly funded research will, therefore, have to ensure that they commercialize such intellectual property to the benefit of the Republic.
6. South Africa's National Research and Development Strategy In section 11(3), the Act provides that each IP cessed 25 May 2010).
transaction involving an assignment of IP by the Health Technologies: South Africa recipient of public funds to a small enterprise must SAAVI is coordinating the research, development contain a condition that the IP will revert back to and testing in South Africa of safe, affordable, effec- the recipient in the event of the liquidation of that tive and locally relevant preventative candidate HIV small enterprise. This will ensure that the conditions vaccines. SAAVI was initially funded primarily by the of the Act will continue to apply to such IP and that National Departments of Health and Science and the ownership of the IP will not fall into the hands Technology and the Eskom Development Foundation of other parties who might not commercialize the IP Limited, with additional funds received from the Euro- for the benefit of society. pean Union, Transnet, and Impala Platinum. Indirect In addition to the already existing foreign exchange support has also been received from the United States regulations, the IPPFRD Act places further require- National Institutes of Health (NIH) for manufacturing ments on offshore IP transactions with regard to IP and clinical trials.
resulting from publicly funded research. In terms of SAAVI has over the last 10 years involved over 200 the Act, the recipient of public funds must inform researchers, clinicians, ethicists, human rights law- NIPMO of its intentions to enter into an offshore yers, information and communications specialists, IP transaction and such a transaction should be in community educators, contract attorneys, business line with the guidelines to be developed by NIPMO managers, and advisors working towards a common on transactions involving non-South African entities goal: developing and testing an effective HIV vac- or persons. According to section 12(2) of the Act, cine that will benefit the populations in need. This a recipient of public funds wishing to undertake an goal can only be achieved by ensuring that product offshore IP transaction in the form of an assignment development and licensing pursue social and hu- or exclusive license must satisfy NIPMO that, i) there manitarian objectives. is insufficient capacity in the republic to develop or Intellectual Property Management
commercialize the IP locally, and that ii) the Republic One of SAAVI's key responsibilities to its funders will benefit from such offshore transactions. The and partners is the effective management of IP devel- inclusion of this section in the Act further empha- oped using SAAVI funds for the good of the people sizes the necessity for recipients of public funds to of South Africa. The MRC's Innovation Centre (IC) first consider developing and/or commercializing IP has been tasked specifically with the identification, emanating from publicly funded research within the protection, management and exploitation of IP arising Republic or to ensure that, if such IP is developed and/ from SAAVI-funded research and manages the SAAVI or commercialized outside the Republic, the benefits IP portfolio on its behalf. to the Republic are clearly visible from the agreement governing the IP transfer.
In 2007 SAAVI developed a formal IP Strategy to provide a framework and procedures for the effec- It is clear from the sections mentioned above as to tive and efficient management of IP developed using how the IPPFRD Act aims to ensure that technologies SAAVI funding. The strategy is based on the follow- developed through public funding, including health- care technologies, are accessible to the public. Since ing guiding principles: IP developed through SAAVI the Act has been recently enacted and has only just funding is managed for public good; SAAVI will, as come into force, it will be some time before the far as possible, retain at least partial co-ownership of impact of the Act on licensing practices and, more and commercialization rights to IP developed using importantly, on the economy and quality of life of SAAVI funding in order to: the people of South Africa can be determined. The (i) ensure "freedom to operate," IPPFRD Act described above demonstrates clearly that (ii) leverage/ facilitate the development of the South African Government is perhaps the first collaborations and partnerships with amongst many policy makers in attempts to balance external parties, and the financial imperatives of licensing activity versus (iii) ensure social responsibility in the exercise social objectives within public funded research insti- of IP ownership and commercialization tutions. Next we describe specific case studies of SRL rights to candidate vaccines, i.e. promotion practice conducted within South Africa.
of developing country access and benefits; SAAVI Case Study
and SAAVI recognizes and respects the IP The South African AIDS Vaccine Initiative (SAAVI) rights of others. was formed in 1999 as a Lead Programme of the Third party IP is licensed in as required for the de- South African Medical Research Council (MRC). velopment, testing, manufacture and commercializa- les Nouvelles Health Technologies: South Africa tion of safe, affordable, effective and locally relevant international) in order to gain access to essential preventative candidate HIV vaccines.
technologies and know-how required to develop The primary aim of SAAVI's IP management strategy and manufacture HIV vaccine candidates. is not to benefit financially or to prevent other parties Most of these partnerships involve the develop- from using SAAVI's intel ectual property, information, ment of novel HIV subtype C vaccine candidates, know-how and materials (intellectual assets), but using the SAAVI genes as antigens together with the rather to ensure that SAAVI has control over their use vector/vaccine platform provided by the partner. In so that the initiative and its partners can: all cases, SAAVI has endeavoured to include in the (i) provide the intellectual assets to third parties; agreements clauses pertaining to social responsibility (ii) prevent misuse of the intellectual assets; in the downstream commercialization of any resulting vaccines. Some examples of clauses that have been (iii) gain access to results and improvements included in these agreements to ensure affordability obtained from research on SAAVI's informa- tion, know-how and materials; and access are as fol ows. Note that the partner details have been removed to protect confidentiality. (iv) ensure that SAAVI's contribution is recog- nized and acknowledged; Company A, 2001
(v) ensure affordable access to any vaccine –MRC hereby grants to Company A (i) a royalty-
developed in SA and elsewhere with the free, non-exclusive license to make, have made, use
use of SAAVI's intellectual assets; and and sell HIV Collaboration Vaccine and/or Cocktail Vaccine to the Public Sector in Developing Coun-
(vi) share equitably in any resulting benefits.
tries, and (i ) a royalty-bearing non-exclusive license
SAAVI strives to find a balance between sharing to make, have made, use and sell HIV Collaboration of its IP, materials and information for scientific Vaccine and/or Cocktail Vaccine to other than the advancement and public good and the protection of Public Sector in Developing Countries. For the SAAVI's interests in IP ownership and commercial- avoidance of any doubt this includes Private Sector ization rights. SAAVI does not restrict the use of its in Developing Countries and both Public and Private patented materials and methods by third parties for Sector in Developed Countries. research purposes, but ensures that an agreement Company B, 2002
is in place to protect its interests. While SAAVI promotes the widespread use of its IP, materials and –Company B hereby grants to MRC an exclusive information for social benefit, it does not condone perpetual fully-paid up license to make, use and sell products within the continent of Africa, without
the unauthorized use of such materials by third par- the right to export such products from Africa,
ties for commercial purposes.
that are covered under any Company B Background Partnerships and Socially Responsible
Invention and/or any Joint Invention that is utilized with any MRC nucleotide sequences in the Study It is well known that significant levels of scientific with the right to sub-license such rights (Company collaboration will be required to develop a success- B retains the right of first refusal and the first right ful vaccine against HIV/AIDS in the shortest possible to negotiate an exclusive license for North America time. It is also a fact that not all of the required and Europe).
technology or capacity for vaccine development, Institution C, 2002
production and testing is available within SAAVI or in –Institution C grants the MRC a non-exclusive South Africa. Therefore, international collaboration license under any and all of its intellectual property and partnerships form a crucial aspect of SAAVI's rights in vector X to manufacture and distribute HIV vaccine which incorporates the said vector or parts SAAVI currently holds patents (some still pend- thereof together with the MRC HIV gene sequences. ing) on HIV-1 subtype C sequences that are repre- –The license shall be world-wide and royalty-free
sentative of circulating strains in Southern Africa for Developing Countries (list provided from
and are therefore ideal candidates for the develop- World Bank classification) for the term of this ment of a subtype C HIV vaccine relevant to the region. The patents have been used very success- –For Developed Countries (list provided from World fully by SAAVI to date to leverage partnerships with Bank classification) the license granted to MRC shall institutions and private companies (predominantly for the term of this Agreement be world-wide and Health Technologies: South Africa provide a royalty to Institution C (the royalty is only having a clinically proven HIV vaccine ready for roll payable once the MRC has recovered all its reason- out. Thus, it will be some time before any of the able direct costs expended on the development, social responsibility clauses are actually put to the manufacture and distribution of the HIV vaccine). test and implemented. While some of the clauses are Company D, 2003
very specific, others provide only general guidelines –Upon the MRC's written request, Company D wil , and will need to be unpacked further before com- as promptly as commercially reasonable, manufacture mercialization to really define what is meant and how and deliver to the MRC up to a maximum of five practically they will be implemented.
thousand (5,000) doses (the "Doses") of Vaccine for It is noteworthy that all of these agreements were use solely in clinical trials. The total amount payable concluded more than six years ago at a time when to Company D for manufacture and delivery of such socially responsible licensing was receiving a lot less Vaccine shall be equal to Company D's Manufactur-
attention and emphasis than it is today. However, ing Cost (defined) of the Doses plus ten percent
the readiness of the various partner companies and (10%). If Company D declines to supply Commercial
institutions to include social responsibility clauses in Product to the MRC (for use in the Territory) on the the SAAVI agreements is probably more a reflection terms set forth in the term sheet, then the MRC shall of the emotive field in which the collaborations are be permitted to enter into an agreement with a Third taking place, i.e. HIV, than a general acceptance by Party on the terms set forth in the term sheet and such partners of these types of clauses. It is antici- such other terms and conditions as are commercially pated that similar agreements involving diseases that reasonable under the circumstances… Company D affect predominantly developed country populations shall enter into an agreement with such Third Party may be more difficult to negotiate.
Manufacturer pursuant to which Company D will It must be noted that many of the partnerships grant a license and transfer its technology to such
mentioned above are no longer in place, either due Third Party (with royalty provision) as required to
to the partner no longer being in business or the vac- enable such Third Party Manufacturer to manufacture cine candidates no longer being pursued. However, and supply Vaccine to the MRC… Company D shall as SAAVI continues its efforts towards developing, make seed stock of the Vaccine available to the MRC testing and commercializing a locally relevant HIV and Third Party Manufacturer and the Third Party vaccine, it will continue to put the good of the people Manufacturer shal be permitted to use such seed of South Africa and other developing countries before stock to manufacture and supply Vaccine to the MRC any economic motive in all of its interactions with (or its nominated distributor) for use solely within
external parties. the Territory.
Case Study: Inhalable Vaccines and Thera-
–Territory shal mean the sub-Saharan African
peutics Developed by MEND
countries listed in the exhibit (48 countries). MEND (Medicines in Need), headquartered in These clauses thus incorporate some of the main Cambridge USA, is a not-for-profit organisation socially responsible licensing strategies, including: supported primarily by the Bill and Melinda Gates • Market segmentation and differential pricing; Foundation (BMGH), and is devoted to manufacture • Non-exclusive licensing; of effective vaccines and therapies for diseases in a manner consistent with the unique needs of the • Manufacturing price limitations on product developing world—which include the reformula- destined for developing countries; tion of existing drugs and vaccines so that they do • Absence of or reductions in royalty payable not require refrigeration, or do not require needles on product destined for developing countries for delivery. We illustrate here MEND's strategy of (especially the public sector); developing and commercialising novel particulate • Requirements for a license and technology inhalable formulations of drugs and vaccines targeting transfer to a third party manufacturer if tuberculosis (TB). Two lead products are currently supply cannot be met; and given priority for development: an inhaled dry powder • Retention of rights in developing countries version of capreomycin7 for treatment of multi-drug- by the MRC, thus allowing the MRC to ensure 7. "Inhaled Large Porous Particles of Capreomycin for Treat- affordability and access.
ment of Tuberculosis in a Guinea Pig Model," (2007) L. Garcia- Implementation of Social Responsibility Clauses
Contreras, J. Fiegel, M. J. Telko, K. Elbert, A. Hawi, M. Thomas, J. VerBerkmoes,W. A. Germishuizen, P. B. Fourie, A. J. Hick- Although SAAVI currently has two vaccine can- ey, and D. Edwards. Animicrobial Agents And Chemotherapy, didates in clinical trials, it is still many years from Aug. 2007, p. 2830–2836 Vol. 51, No. 8.
les Nouvelles Health Technologies: South Africa resistant TB (MDR-TB) and an inhaled form of the solution wherein the drug is delivered locally into TB vaccine, BCG.8 Proof of concept of the efficacy of the lung where the primary pathology is present in both interventions has been obtained from animal high therapeutic concentrations, while at the same studies together with other appropriate data such as time reducing systemic exposure, thus decreasing the pharmacokinetics, particle characterisation and opti- side effects. The inhaled form of BCG also constitutes misation, and development of processes for scale up. needle-free immunisation, and the benefits are obvi- The underlying patented technology behind both9,10 ous since the subjects for immunisations are usually has been licensed from David Edwards' laboratory at infants. In addition, animal models of immunisation Harvard University, and Edwards is also one of the strongly suggest that the aerosolised vaccine is more co-founders of MEND. While the vaccine is in pre- effective than the standard vaccine administered by clinical stages of testing, the drug has entered phase injection. Both products can potentially be trans- I of clinical testing.
ported and stored without the need for refrigeration.
The underlying research and development activities MEND intends both products to be ultimately for the two projects are supported by grants from the manufactured in South Africa. This is not only due National Institutes of Health, USA and the BMGH. to cost structures, but also because South Africa MEND has subsidiaries elsewhere, of which the South provides a gateway to the large numbers of TB and African (Pretoria) subsidiary plays an important role MDR-TB sufferers in sub-Saharan Africa, the availabil- in translational R&D relevant to its core technologies. ity of good infrastructure and manufacturing capacity, It provides a stable base of operations for cGLP and and stable economy and political landscape compared cGMP manufacturing sites, and the conduct of clinical to other African countries. In the long term MEND trials through regional networks in Africa. Through will also establish partnerships to ensure products MEND, networks of biotech laboratories operate on a also reach other parts of the world.
not-for-profit basis, and a well networked community Harvard has granted MEND a royalty-free license of pharmaceutical scientists, engineers, and research- for use of products in the developing world. MEND ers from industry and academia has been established will also pursue commercial markets in the developed to develop and implement advanced delivery tech- world solely to support its charitable objectives11 nologies for the critical needs of developing world (press release). MEND will pay royalties from profits vaccines and therapies. The overall business model of in commercial markets to Harvard, however under MEND is to yield products or processes that can be a gift-back mechanism much of this will be donated licensed by global or developing world pharmaceutical back to MEND to support its development activities companies for development and commercialisation. for products targeting diseases of poverty.
Both products have the potential to solve prob- Worthy of note is that the fundamental technolo- lems and fulfil unmet needs in developing countries. gies underlying novel particulate formulations and Intramuscularly administered capreomycin is used delivery systems are potentially applicable to a variety for treatment of MDR-TB, however its therapeutic of diseases in the form of both vaccines and therapeu- value is limited due to a number of factors, primarily tics. The various academics, primarily at Harvard, and the need for daily injections which are painful and also MEND continue in the process of development associated with serious side effects in patients who of products and processes for both poverty-related are chronically ill and severely emaciated. Inhaled and developed country indications. MEND expects to capreomycin, developed by Harvard and MEND in generate further IP as it continues the development the form of Large Porous Particles (LPP) has the process and reserves the right to protect and use it potential to replace current therapy as a needle-free in a manner conducive to its charitable purpose.
This is a good example of projects that are developed 8. "Immunization by a Bacterial Aerosol," (2008) Garcia- and licensed in a social y responsible manner and have Contreras L., Wong Y.L., Muttil P., Padilla D., Sadoff J., Der- the potential to be self sustaining through profits ousse J., Germishuizen W.A., Goonesekera S., Elbert K., Bloom developed through a market-segmentation approach.
B.R., Miller R., Fourie P.B., Hickey A., Edwards D., Proceedings of the National Academy of Sciences of the USA. 2008 Mar. 25;105(12):4656-60. Epub 2008 Mar 14.
9. Edwards, D.A., et. al. Porous Particles for Deep Lung Deliv- 11. Butkus Ben, Inhaled TB Vaccine Developed by Harvard, ery, U.S. Patent No. 6,254,854. Granted July 3, 2001.
MEND Scientists May Enter Clinic Next Year (26 march 2008), 10. Methods and Compositions of Dry Cellular Forms, (Euro- pean Patent Application EP1913127; WIPO Patent Application Health Technologies: South Africa Facilitating access to essential medicines in the In conclusion, it is important for public institutions, developing world is critical, as is ensuring patented primarily universities, as they are the main recipients inventions are available for further development. of public funding, to implement SRL practices. IP rights Adopting consistent and widespread IP policies are not valuable to investors only but to the public within public institutions on these issues will help sector as wel .12 We have already mentioned the eight raise awareness and hopefully make companies more different SRL strategies discussed in the literature for accepting of SRL clauses.15 facilitating and promoting access to new and essential Governments of developing countries have been technologies, and introduce some variations of these aware of the effects of strengthened IP rights result- from South African case studies. Adopting practices ing from the application of the TRIPS agreement. As compliant with SRL within public institutions will demonstrated in the Zerit® case, access to patented require the participation of several departments: the essential drugs has proven difficult for low or middle technology transfer office (TTO), legal department, income countries.16 Access to generic versions of research departments, finance department and heads these drugs is subject to strict compulsory licensing of institutions, to name a few. It wil also require a rules17 which are often difficult to implement and thus change in traditional profit-driven IP management to hinders availability. The burden of TRIPS lies on the al ow incorporation of social considerations.
developing world which suffers the consequences18 The starting point to incorporating SRL is adapting of this regime. But, by promoting socially responsible the actual licensing policies in place. As licensing licensing strategies, Governments can improve access agreements are bilateral contracts, the licensor and to essential drugs without the added difficulties of licensee are obligated to fulfil their respective engage- obtaining compulsory licenses. The South African ments. Hence, including clauses for social responsibil- government has taken steps in the right direction by ity within the agreement will ensure that the licensee putting into place the IPPFRD Act, which seeks to wil take the appropriate measures to guarantee, as far ensure IP emanating from publicly funded research is as possible, that the demands of the developing world commercialized to the benefit of the public. However, are met. Several different approaches, as illustrated this Act applies only to local publicly funded institu- in the SRL strategies discussed and applied in the tions and has no direct impact on IP developed at case studies above, can help achieve this goal. Uni- foreign universities. versities outside of South Africa should also consider Neglected diseases affecting the developing world incorporating the recommendations of section 11 of are often disregarded in commercial development of the IPPFRD Act or any equivalent in their policies, products because the populations they affect generate as far as is practical. They should also ensure that an negligible revenues. The drugs needed to treat these emphasis on social benefit is included in their objec- diseases rarely make it past fundamental research tives. In doing so public institutions will ensure that stages because pharmaceutical companies are not social impact is pursued as strongly as profit when licensing their technologies.
willing to invest in non-profit drug development. This 13 Some may argue that companies will find SRL policies less appealing and be less willing to agree to such terms; however the 15. Lita Nelsen and Anatole Krattiger, "Ensuring Developing- actual financial impact is negligible if there are dual Country Access to New Inventions: The Role of Patents and markets in developed and developing countries. The Power of Public Sector Research Institutions," Intellectual Prop- approach for licensing technologies will be different erty Management Health and Agricultural Innovation: A Hand- book of Best Practices, Volume 1, Ch. 1.4, p. 23. in each market. In developed countries, where the 16. Supra note 2. pharmaceutical industry earns the vast majority of its profits, patent protection will ensure high-income. 17. Trade-Related Aspects of Intellectual Property Rights, an- nex 1C of the Marrakesh Agreement establishing the World In developing countries generic competition will Trade Organization, 15 April 1994, art.31. promote accessibility and affordability.14 18. Since the adoption of the TRIPS agreement, develop- ing countries' perception on its benefits has shifted dramati- 12. Mahoney, R. A. Pablos-Mendez, S. Ramachandran, "The cally. Much needed resources are siphoned off to pay royalties Introduction Of New Vaccines Into Developing Countries: III. to developed countries. This issue is at the core of the North/ The Role Of Intellectual Property," Vaccine, 2004. 22(5-6): South division. Tana Pistorius, "The Impact of Intellectual Prop- erty Law and Policy on Sustainable Development," South Afri- 13. Supra note 1. can Year Book of International Law, Volume 32, 2007, p. 381. 14. Dave A. Chokshi, Improving Access to Medicines in Poor Countries: the Role of Universities, Online: http://www.ncbi.
les Nouvelles Health Technologies: South Africa creates a gap, preventing effective treatment from socially responsible licensing practices, Governments reaching those who need it most. Socially responsible and publicly financed institutions can fulfil their com- licensing coupled with public-private product develop- mitment of social welfare and stimulate a competitive ment partnerships (PDPs) can go a long way towards economy, which will benefit all. ■ ensuring these drugs are produced. Involvement in PDPs will reflect well on private companies and may actually encourage new and profitable alliances. The Medicines for Malaria Venture (MMV) is a successful This work was funded by a European Union FP7 example of a PDP helping to bridge the gap of access grant 241839 entitled "Access to Pharmaceuticals." to essential medicines.19 PDPs ensure socially respon- sible licensing practices can be profitable for both the developing world and for the thriving pharmaceutical industry of developed countries. It must be recognized that SRL practices are not on their own going to solve all issues of access to es- directions.html. sential medicines in developing countries. There are many factors that influence access beyond the rights to use the IP. These include adequate infrastructure and distribution networks, human resources capacity, and political will, to name a few. These are beyond the control of publicly funded institutions; however, these institutions have the power to reduce one of the significant barriers to access, i.e. IP rights relat- ing new health solutions. Thus, by promoting more story_id=28494. 19. "Medicines for Malaria," Product Development Partner- ship Model. Online: http://www.mmv.org/partnering/pdp-mod- el (accessed 14 May 2010).

Source: http://www.lesi.org/docs/default-document-library/Socially_Responsible_Licensing_Of_Health_Technologies_Policy_And_Practice_In_South_Africa.pdf

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