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Stimulating medical R&D when inventions enter the public domain. James Packard Love CPTech _________________ CIPP Workshop on Intellectual Property, Biotechnology Capacity and Development Buenos Aires 25 September 2006. Basic ideas.

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Stimulating medical r d when inventions enter the public domain

Stimulating medical R&D when inventions enter the public domain

James Packard Love



CIPP Workshop on Intellectual Property, Biotechnology Capacity and Development

Buenos Aires

25 September 2006

Basic ideas
Basic ideas domain

  • Separate markets for innovation from markets for products

  • Allow generic competition for products, driving prices closer to marginal costs of manufacture and distribution

  • Create new systems of finance for innovation, including (1) rewards for successful product development that are not tied to product prices, and (2) new methods of financing open collaborative science projects

  • Create new global trade framework to address free rider problems, and to raising funding for global health care priorities

Current focus
Current focus domain

  • Promote use of prizes to reward innovations that improve health care outcomes

    • The United States market for prescription medicines

    • Rewarding inventions for health care problems of patients and communities with low incomes

    • Countries with large internal markets: India or Brazil

  • Investigate possible role of competitive intermediaries to support open collaborative research projects

  • Change focus of trade agreements from specifying IPR regimes to addressing minimum levels of support for R&D

    • Inclusive in terms of mechanisms. All systems to support R&D addressed, including traditional public sector funding, rewards for success innovations, competitive intermediaries, etc.

Some key dates
Some key dates domain

  • September 18, 2002, Ottrott-le-Haut, France. Aventis Radical IP scenarios

  • January 26, 2005, Rep. Sanders introduces HR 417

  • February 24, 2005, Request to Evaluate Proposal for New Global Medical R&D Treaty

  • May 27, 2006. WHA resolution: Public health, innovation, essential health research and intellectual property rights: towards a global strategy and plan of action

  • December 4-8, 2006, 1st meeting of WHO Intergovernmental working group (IGWG)

  • May 2008, WHA considers global strategy and plan of action

Medical innovation prize fund hr 417 109th congress
Medical Innovation Prize Fund domainHR 417 - 109th Congress

  • Annual funding of .5 percent of US GDP -- approximately $60 billion per year

  • Developers of medicines are rewarded for impact of invention on health care outcomes

    • 10 year participation in rewards

  • All products are open to generic competition

  • Set-asides

    • 4 percent (2.4b) for global neglected diseases;

    • 10 (6b) percent for orphan drugs; and

    • 4 (2.4b) percent global infectious diseases and other global public health priorities, including research on AIDS, AIDS vaccines, and medicines for responding to bio-terrorism

Relationship between medical innovation prize fund and patent system
Relationship between Medical Innovation Prize Fund and Patent System

  • Patent owners would not have rights to prohibit or authorize use and sale of products

  • However,

    • Patents would be factor in establishing ownership of inventions.

    • Ownership of invention would create claims against Prize Fund (Prize fund payments are far higher than current royalty payments)

Stimulating medical r d when inventions enter the public domain

Supply of QALYs Patent System

Size of prize fund

more elastic supply

less elastic supply

.75% of GDP

.50 % of GDP

QALYs supplied



Next steps on us prize fund
Next steps on US prize fund Patent System

  • New bill introduced in 2007. Some technical issues will be addressed, such as treatment of inventions that are developed at roughly the same time, or treatment of rewards for new uses of older medicines.

  • Emphasis on expanding community of technical experts working on the proposal (economists, lawyers, research community, various stakeholders, etc).

  • Fall of 2007. Begin serious effort to promote public debate on proposal.

Essential patent pool proposal
Essential Patent Pool Proposal Patent System

  • Create pool for downstream use of patents on essential medical technologies.

  • Create fund to provide rewards for inventions licensed to pool that improve health care outcomes.

  • Possible extensions

    • Agreement that developing countries that support reward fund can seek more liberal exceptions to IPR rules

2005 medical r d treaty proposal
2005 Medical R&D Treaty proposal Patent System

  • New paradigm for trade negotiations -- focuses on R&D rather than mechanisms to raise prices.

  • Inclusive: Recognizes the importance of public and private sector R&D funding, and different mechanisms to stimulate R&D

    • For example

      • Strong IP, high prices

      • Weak IP, low prices, public sector funding

      • Alternative incentives systems

  • Focuses on capacity of country to support R&D costs

  • Flexibility in terms of mechanisms

  • Creates global system of tradable credits as incentives to fund R&D in areas of priority.

Treaty mechanisms overview

Committee on Priority Patent System

Medical Research (CPMRD)

Assembly for Medical Innovation (AMI)

Treaty parties

Committee on Open

Public Goods (COPG)

Council Medical Innovation (CMI)

Committee on Exceptionally

Useful Projects (COEPUP)

Committee on open

Access publishing (COAP)

Report of treaty

Qualifying projects

Committee on Technology,

Transfer and Capacity (CTEC)

Committee on TraditionalKnowledge (CTK)

Country B







e.g. PPPs

Buy out



Purchase of

patented drugs



Treaty mechanisms overview

Treaty Secretariat

Country A


Treaty supporters
Treaty Supporters Patent System