Cristina de A. Possas Research and Technological Development Unit National STD-AIDS Program

1. Satellite Meeting ANRS – Brazilian NP STD/AIDS, MOH Universal and Free Access: To what extent are current mechanisms appropriate and sustainable? Mexico City, August 4, 2008 Conclusion: What Follows in ARV Access Strategy and in the Research Agenda? Cristina de A. Possas Research and Technological Development Unit National STD-AIDS Program MOH - Brazil

2. I. Epidemiological trends: dramatic global health scenario • Data (WHO/UNAIDS, 2007) indicate there are 33 million HIV infected people in the world (70% are in Africa). Every year 2.5 million people get infected and 2 million die of AIDS. • Prospects for the future – It is estimated that, if the current situation persists, by 2025 around 67 million people will have died with AIDS (UNAIDS AIDS Africa Project, 2004)

3. Challenge: access to ARV therapy A human rights issue

4. II. R & D trends: rapid innovation in pharmaceuticals • New biotechnology - breakthroughs in molecular biology and genetic engineering • New developments - new ARV drugs and new combinations of drugs minimizing side effects

5. III. Access trends: progress but reduced impact on public health • Contrasting with rapid innovation in ARV development, 75% of HIV/AIDS patients in the world still without access to treatment. • Despite international initiatives to improve access and progress (3 x 5 and other), this situation tends to aggravate

6. IV. Price Trends • TRIPS post-2005 scenario – compliance to TRIPS has eliminated the possibility of generic competition to reduce prices • Bilateral FTA agreements are also reducing TRIPS flexibities • Spiraling prices of second and third generations of new patented ARV drugs • Developing countries are becoming increasingly dependant on voluntary and compulsory licensing to reduce prices

7. Brazil: increase in prices of patented ARV 4 of the 17 ARV drugs distributed by the Ministry of Health:in 2005 , 70% of expenditure • Efavirenz (Merck, Sharp & Dome) –US$ 1,575/capsule – average cost of treatament/patient/year: US$ 574.80 (*) • Nelfinavir (Roche) –US$ 0.468/capsule – average cost of treatament/patient/year : :US$ 1,537.00 • Lopinavir/ritonavir (Abbott) –US$ 1.30/ capsule – average cost of treatament/patient/year: US$ 2,847.00 • Tenofovir (Gilead Sci.) -US$ 7.68/ capsule – average cost of treatament/patient/year: US$ 2,803.00 • In May 2007, compulsory licensing of Efavirenz allowed a drastic reduction of the price of the capsule from US$ 1,59 to US$ 0,45

8. Another global constraint impacting on prices: scarcity of API • API producers remain basically the same, but international demand is increasing very fast • Developing countries: Urgent need for a strategic supply and for building national production capacity for API

9. V.International policy trends • On one hand, pressures particularly from developing countries, for a more flexible IPR regime • On the other hand, international movements towards more strict IPR regimes: bilateral commercial agreements signed by U.S. with developing countries (TRIPS Plus) such as Singapore, Morocco, Jordan • Question: Which of these trends will prevail?

10. Impasse: voluntary and compulsory licensing is complex • It is a flexility of TRIPS, but an exception instrument (public interest, emergency), cannot be a routine for all ARV drugs. • In many developing countries, local governments are often paralised by economic and political pressures, legal uncertainties , in the compulsory licensing process • Brazil: several attempts of compulsory licensing of ARV drugs before Efavirenz

11. Topics for a Research Agenda • Alternative incentives to innovation: new regulatory strategies and new business models • Clinical Trials: constraints from data exclusivity related to IP • HIV Vaccines and IP – how to prevent future problems of prices and access (HPV and other) • Harmonization and national specificities • R & D Networks linking developing countries • IP, Ethics and Human Rights: the role of civil society organizations

12. 1. 1.The need to conceive and implement alternative incentives to innovation • The main argument of multinational pharmaceutical enterprises is that moreflexibleIPR and compulsory licenses will undermine their long term investments in R & D and innovation • R & D Funds: divided between direct payment to patent owner and investiment in R & D Fund (Love, 2005). From a royalty of 3.5 per cent • 2 per cent for patent owner • 1.5 per cent for R & D Fund • Patent owner would have participation in the Fund • Patent pools for licensing – collaborative strategy for collective assessment of property rights – needs the involvement of industry • A new system to pay for innovation – market for products separated from market for innovations: health products would be available to the consumer at generic prices, while innovators would benefit from a separated system (Medical Innovation Prize Fund)

13. 2. Clinical Trials and Data Exclusivity - IP In bilateral trade agreements (FTAs), data exclusivity in clinical trials, if disseminated, will oblige generic producers to submit their own safety and efficacy data, repeating clinical and pre - clinical trials, delaying availability of generics Timmermans, K. Monopolizing Clinical Trial Data: Implications and Trends Plos Med 4(2) 2007

14. 3. Preventing a future problem: IP and access to HIV vaccines • In some developing countries, impact of IP on prices has delayed the introduction of new vaccines, such as Hepatitis B and HPV. Concern: prevent these constraints in new HIV vaccines • A problem: multinational pharmaceutic industry is concentrating its R & D efforts basically on the development of new ARV drugs – only 10% of industry R & D expenditure is allocated on HIV vaccine research. Public money (NIH, ANRS, etc)

15. 4. R & D Networks: South to South Cooperations • Friends of Development - WIPO • Network for Technological Cooperation set by Brazil with several developing countries in XV AIDS Conference in Bangkok 2004 • Network for IPR Research - Portuguese Speaking Countries • IBSA – India, Brazil and South Africa – HIV Vaccine and other areas of health research

16. 5. Harmonization and national specificities Examine the global IP harmonization trends and how they affect specific local conditions for research, development and production of strategic public health inputs

17. 6. IP, Ethics and Human Rights: • Ethical, legal and cultural issues related to IP • The role of civil society organizations • Social function of property: IP subordinated to public health (Constitutions, Doha Declaration)

18. Conclusions • Free circulation of knowledge is crucial, specially for technologies necessary to confront emerging and threatening infectious diseases • Not only social or epidemiological issue, also economic • Stiglitz (2004) – excessively strong IPR can even lower the pace of innovation

19. Therefore • There is an urgent need to review international IP legislation and policies and to conceive more flexible IPR regime and alternative incentives to innovation, taking into account country-specific issues • Need for stronger political pressures and new networking initiatives connecting developing countries • A new Research Agenda is crucial to support decision making in these local initiatives