The Role of Universities

1. The Role of Universities Amit Khera MS-1 University of Pennsylvania School of Medicine

2. The �Access Gap� WHO 2004WHO 2004

3. Avowed mission towards advancing the public good Upstream in drug R&D Access to researchers and administrators

4. Penn CTT Mission statement �Commercialize Penn research discovery for the public good�

5. What role do universities play? Increasingly important part of U.S. R&D U.S. universities are responsible for more than 50% of the country�s basic research science Growth in patenting and commercialization: 1970 to 2001, ten-fold increase in number of U.S. patents issued annually to U.S. academic institutions AUTM data show significant increase in licensing activity �Major players in the biopharmaceutical arena� A 2000 report suggested that 15 of the 21 drugs with the most therapeutic impact were derived from federally funded projects at academic centers Lots of blockages in pipeline between good R&D and good health does not mean that one obstacle (patents) can be ignored because other obstacles (e.g., infrastructure) exist. Also, most other obstacles are being addressed effectively: -social support and adherence models from MSF and PIH -denial and blame issues by TAC and other orgs -poverty relief and structural interventions by Oxfam and Blankenship group Lots of blockages in pipeline between good R&D and good health does not mean that one obstacle (patents) can be ignored because other obstacles (e.g., infrastructure) exist. Also, most other obstacles are being addressed effectively: -social support and adherence models from MSF and PIH -denial and blame issues by TAC and other orgs -poverty relief and structural interventions by Oxfam and Blankenship group

6. Innovations at various universities� HIV/AIDS Yale: d4t (Zerit) U Minn: abacavir (Ziagen) Emory: 3TC (Epivir), emtricitabine (Emtriva) Duke: t20 (Fuzeon) Glaucoma Columbia: latanoprost (Xalatan) Hepatitis U of Washington: Hep B Vaccine Cancer Michigan State: Cysplatin and Carboplatin Others with key university input: Epogen, Erbitux, Prilosec, streptomycin, penicillin, insulin 2000 report suggested that 15 of the 21 drugs w/ therapeutic input were derived from federally funded projects at academic centers2000 report suggested that 15 of the 21 drugs w/ therapeutic input were derived from federally funded projects at academic centers

7. NEW APPROACH TO THE PROBLEM, TO AVOID HAVING TO REACT TO EVERY D4T � won�t know about them all, can�t change all of them, people are harmed with delayNEW APPROACH TO THE PROBLEM, TO AVOID HAVING TO REACT TO EVERY D4T � won�t know about them all, can�t change all of them, people are harmed with delay

8. ECONOMIC/NORMATIVE SUPPORTECONOMIC/NORMATIVE SUPPORT

9. This is typical of most universities. At Berkeley, the numbers for FY 2004 are:This is typical of most universities. At Berkeley, the numbers for FY 2004 are:

10. What do universities do with this research?Historical Perspective For much of the 20th century, universities rarely patented their research output INTELLECTUAL PROPERTY PRACTICES OF UNIVERSITIES INTELLECTUAL PROPERTY PRACTICES OF UNIVERSITIES

11. Increase in Patenting and Commercialization: Bayh-Dole Act (1980) Goal: Increase technology transfer and utilization of federally-funded research What did it do? Universities given right to retain the property rights to inventions made under federal funding; exclusive licensing permitted Lots of blockages in pipeline between good R&D and good health does not mean that one obstacle (patents) can be ignored because other obstacles (e.g., infrastructure) exist. Also, most other obstacles are being addressed effectively: -social support and adherence models from MSF and PIH -denial and blame issues by TAC and other orgs -poverty relief and structural interventions by Oxfam and Blankenship group Lots of blockages in pipeline between good R&D and good health does not mean that one obstacle (patents) can be ignored because other obstacles (e.g., infrastructure) exist. Also, most other obstacles are being addressed effectively: -social support and adherence models from MSF and PIH -denial and blame issues by TAC and other orgs -poverty relief and structural interventions by Oxfam and Blankenship group

12. The Birth of a Drug

13. Despite increasing commercialization, TTOs � overall � aren�t making a lot of money! �The dirty secret is that for many universities�perhaps most�they are not breaking even, much less making money on the proposition.� Johns Hopkins President William Brody ECONOMIC REALITIES OF UNIVERSITY LICENSING � WHAT DO THEY HAVE TO LOSE?ECONOMIC REALITIES OF UNIVERSITY LICENSING � WHAT DO THEY HAVE TO LOSE?

14. Many university owned patents don�t get licensed; most licensed patents don�t result in big money for universities. AUTM Annual Survey: <1% of 21K licenses generated >$1M (2000) On average, revenues from licensing patents equal up to 4% of a university�s research funds � even smaller % of overall university budget Small number of schools, making money from limited number of very successful patents

15. Universities prize tech transfer deals Discretionary funds Faculty Incentives TTO Bias Respond primarily to financial incentives Despite economic reality and mission statement �Survey results from Thursby (2000) indicate that the most important objective for technology transfer offices is to generate royalties and fees.� Source: University Technology Transfer Offices: A Status Report (Fleischut and Haas, Biotechnology Healthcare April 2005) But it is worth noting: universities prize tech transfer deals Discretionary funds (buildings) Faculty incentives (revenue sharing under Bayh-Dole) TTO bias (depending on revenues, metrics) TTOs consider securing royalty and licensing fees their most important objective. This is despite the economic reality described above And despite the frequently claimed �primary goal� of serving the �public good� �Survey results from Thursby (2000) indicate that the most important objective for technology transfer offices is to generate royalties and fees.� Source: University Technology Transfer Offices: A Status Report (Fleischut and Haas, Biotechnology Healthcare April 2005) But it is worth noting: universities prize tech transfer deals Discretionary funds (buildings) Faculty incentives (revenue sharing under Bayh-Dole) TTO bias (depending on revenues, metrics) TTOs consider securing royalty and licensing fees their most important objective. This is despite the economic reality described above And despite the frequently claimed �primary goal� of serving the �public good�

16. Case StudyYale: the d4T story Rather typical facts When/where of patenting University charter and the public good Economics of tech transfer University interests Role of (student) activism and press attention Significant impact on pricing / access No impact on economic incentives for pharma/university YALE EXAMPLEYALE EXAMPLE

17. The timeline 1966: compound synthesized under a National Cancer Institute grant at the Michigan Cancer Center 1984: Yale scientists prove that d4T is potent against HIV in cell cultures 1986: Yale files for a �use patent� 1988: Yale issues BMS exclusive worldwide license (and files for patents in South Africa, Egypt, etc.) 1994: FDA approval 1994 - 97: BMS takes out process patents

19. MSF�s request; Yale�s response Feb 14, 2001: MSF request to Yale: Asking Yale if they �would consider the importation of generic versions of stavudine for use in providing treatment free of charge to people with HIV/AIDS unable to afford treatment an infringement of your intellectual property rights,� And if so, if Yale would �issue a voluntary license to allow the importation and use of generic stavudine in South Africa.� March 1, 2001: Yale replies: Yale denies the request on legal grounds, indicating that they have granted an exclusive license to Bristol-Myers Squibb (BMS)

20. MSF�s Reply March 9, 2001: MSF responds: MSF suggests to Yale that their own policy states that a key objective is �the benefit of society in general� MSF points out that d4T is not reaching those who need it in South Africa, and suggests that Yale has the ultimate power over their patent, and could breach their contract with BMS if need be. March 11, 2001: NYT story �Yale Pressed to Help Cut Drug Costs in Africa�

21. March 14, 2001: Concessions! �EMERGENCY PATENT RELIEF�  �The Company will ensure that its patents do not prevent inexpensive HIV/AIDS therapy in Africa.�The patent for Zerit, rights to which are owned by Yale University and Bristol-Myers Squibb, will be made available at no cost to treat AIDS in South Africa under an agreement the Company has recently concluded with Yale.� In June 2001, �agreement not to sue� signed with Aspen Pharmacare.�

22. Implications For South Africa Rapid, thirty-fold reduction in the price of d4t in South Africa (from more than $1600 to $55 per patient per year) August 2003, Aspen began selling generic d4t in South Africa for up to 40% less than the reduced BMS price The national ARV program being rolled out in South Africa will rely upon generic versions of d4t For Yale No loss of income associated Subsequent major Pfizer investment

23. Is d4t an anomaly? Gilead pays Emory $525 Million for royalty interests for emtricitabine

25. Drug Development Pipeline Figure 1 | The drug discovery and development pipeline. The journey from initial concept to a marketed drug is a long one, and is statistically more likely to end in failure than success. The average time for a drug to reach the market is around 12-15 years, and only 1 in 5,000 compounds screened in early-stage discovery successfully makes it through to market, although both figures vary dramatically with disease area. Most failures occur at the early or preclinical stage, but given that only 20% of compounds that enter human trials are successfully approved, and that the average cost of compound development at the clinical stage has reached several hundreds of millions of dollars, any of these potential 'failures' need to be detected as early in the pipeline as possible. A key early point in the pipeline is the hit-to-lead process. Here, compounds that are active against validated targets, or 'hits', are assessed for relevant biological and drug-like properties, such as chemical integrity, functional behaviour and structure-activity relationships. High-throughput screening (HTS) is used at this point, but computational approaches are becoming increasingly integrated with HTS to search through large compound databases in silico and to select candidate molecules for testing to identify novel chemical entities that have the desired biological activity, known as leads. Cost data in US (Year 2000) $ from DiMasi, J. A., Hansen, R. W. & Grabowski, H. G. The price of innovation: new estimates of drug development costs. J. Health Econ. 835, 1-35 (2003).Figure 1 | The drug discovery and development pipeline. The journey from initial concept to a marketed drug is a long one, and is statistically more likely to end in failure than success. The average time for a drug to reach the market is around 12-15 years, and only 1 in 5,000 compounds screened in early-stage discovery successfully makes it through to market, although both figures vary dramatically with disease area. Most failures occur at the early or preclinical stage, but given that only 20% of compounds that enter human trials are successfully approved, and that the average cost of compound development at the clinical stage has reached several hundreds of millions of dollars, any of these potential 'failures' need to be detected as early in the pipeline as possible. A key early point in the pipeline is the hit-to-lead process. Here, compounds that are active against validated targets, or 'hits', are assessed for relevant biological and drug-like properties, such as chemical integrity, functional behaviour and structure-activity relationships. High-throughput screening (HTS) is used at this point, but computational approaches are becoming increasingly integrated with HTS to search through large compound databases in silico and to select candidate molecules for testing to identify novel chemical entities that have the desired biological activity, known as leads. Cost data in US (Year 2000) $ from DiMasi, J. A., Hansen, R. W. & Grabowski, H. G. The price of innovation: new estimates of drug development costs. J. Health Econ. 835, 1-35 (2003).

26. Lessons Learned Proactive solution is preferable Activism does not always work Technology Transfer Offices responds to financial pressures Administrative simplicity required Collective Action Need to be able to reach ultimate end products TTOs interested in �saving� overall deal, as opposed to preserving LMI markets Administrative simplicity required limited resources and TTOs� desire to please pharma Collective action key reliance by pharma Need to be able to reach ultimate end products TTOs interested in �saving� overall deal, as opposed to preserving LMI markets Administrative simplicity required limited resources and TTOs� desire to please pharma Collective action key reliance by pharma