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MIHR

PIPRA

Fiocruz, Brazil

bioDevelopments-   Institute

Home > IP Topics Index > Putting Intellectual Property to Work: Experiences from Around the World > Pragmatic and Principled: DNDi’s Approach to IP Management

Pragmatic and Principled: DNDi’s Approach to IP Management

Editor's Summary, Implications and Best Practices

Abstract

The mission of the Drugs for Neglected Diseases initiative (DNDi) is to develop safe, effective, and affordable new drugs for patients suffering from neglected diseases and to ensure equitable access to these drugs. DNDi believes that intellectual property (IP) rights should not pose a barrier to access to these medicines. Hence, a balanced approach to IP management is critical for effective implementation of DNDi’s mission. The organization has written an IP policy that both encapsulates and articulates DNDi’s approach to IP based on core principles and beliefs. The policy reflects the DNDi philosophy, vision, and mission, ensuring that its products are accessible and affordable to patients who need them most. DNDi recognizes the reality of IP and seeks to implement its humanitarian mission using best, pragmatic practices for IP management. Indeed, DNDi has already demonstrated that this is feasible, having successfully negotiated with both private and public sector institutions in order to actualize its principled mission.

1. Introduction

In 1999, a need was identified for an alternative method to research and develop new drugs for infectious, tropical diseases. The doctors of Médecins Sans Frontières (MSF) gave testimony to the fact that the handful of drugs (to treat such diseases) that did exist was inaccessible to patients suffering from the diseases. Most of the drugs still have to be delivered in hospital situations, which is difficult where health care is rudimentary. In addition, the medicines are unaffordable, as a consequence of the need to recoup the supposedly high costs of researching and developing the drugs and the need for pharmaceutical companies to make a profit. These drugs were, and are, not only out of reach for individual patients but also for governments of disease-endemic countries. Intellectual property (IP) rights are among the factors driving these high prices, leaving patients in the developing world to their own limited resources and, ultimately, to undesirable outcomes with disability and death as the worst consequences.

The statistics show that hundreds and thousands of disadvantaged people in developing countries are suffering their diseases in silence. These patients are unable to afford even the (largely inadequate) existing treatments, most of which have toxic side-effects, are ineffective, and need to be delivered in hospital conditions. These patients, though they urgently need new, safe, and field-adapted medicines, do not constitute lucrative markets that the current drug R&D model targets, hence the plight of these patients remains unanswered (Figure 1). Of the 1,556 new drugs that came to the market from 1975 to 2004, only 21 (1.3%), were for tropical diseases such as human African trypanosomiasis, Chagas’ disease, leishmaniasis, helminthic infections, schistosomiasis, onchocerciasis, malaria and tuberculosis – diseases that account for 12% of the global disease burden. Ten of the 21, including four of the five developed since 1999, were marketed for malaria and tuberculosis.¹ This fatal imbalance is responsible for the deaths of more than 35,000 people a day.

The Drugs for Neglected Diseases initiative (DNDi) firmly believes that drug research can be an activity in the public domain that leads to the advancement of health, and recognizes that patented products do not always benefit those who need them most. DNDi considers its products as public goods. It does not wish to profit from its new products and wants to share the knowledge it creates by transferring technology to other researchers and manufacturers when required. The R&D process requires access to knowledge from both private and public research organizations so that DNDi can use the best available science to research and develop new drugs for neglected diseases. Based on its core principles and beliefs, DNDi has crafted an IP policy that pragmatically captures the organization’s philosophy, vision and mission, and, thereby, ensures that products offered by DNDi are made accessible and affordable to patients who need them most (see Box 1 at the end of this chapter).

2. DNDi ’s Vision and Mission

DNDi was set up to address the imbalance in access to critically needed medicines, by giving patients in developing countries the opportunity to be the direct beneficiaries of new products of drug R&D for diseases that do not represent a viable drug market. DNDi’s mission is to develop safe, effective, and affordable new drugs for patients suffering from neglected diseases (Figure 1) and to ensure equitable access to these. By 2014, it aims to develop and make available six to eight such field-relevant treatments.

This, of course, is easier said than done, primarily because to most scientists, pharmaceutical companies, and institutions with whom DNDi collaborates, the idea of placing a potentially commercial product, such as a drug, into the public domain is both novel and bizarre. DNDi’s “no profit, no patents” stance calls for, and is committed to, a significant amount of long and sensitive negotiation, to ensure that it becomes more acceptable and widely supported.

Furthermore, whereas the response to calls, from numerous civil society groups and nongovernmental organizations (NGOs), to dispense with patents for essential health tools has been met in some spheres with scorn and disregard, certain organisations are slowly beginning to agree that patents often hinder R&D. For example, the recent 2006 report from the World Health Organization (WHO) Commission on Intellectual Property, Innovation, and Public Health (CIPIH) explicitly stated, “There is no evidence that the implementation of the TRIPS [Trade Related Aspects of Intellectual Property] Agreement² in developing countries will significantly boost R&D in pharmaceuticals on Type II and particularly Type III [neglected] diseases.³ Insufficient market incentives are the decisive factor.”

This assertion is echoed loud and clear in the preamble of the recently adopted (27 May 2006) World Health Assembly resolution (WHA 59.24) titled Public Health, Innovation, Essential Health Research, and Intellectual Property Rights: Towards a Global Strategy and Plan of Action which notes, “… that intellectual property rights are an important incentive for the development of new health-care products; … however … this incentive alone does not meet the need for the development of new products to fight diseases where the potential paying market is small or uncertain….”

Nevertheless, DNDi’s approach to IP, although highly principled, is quite pragmatic (as articulated in its IP policy), and will, therefore, contribute to encouraging further innovations and, even more importantly, to ensuring that patients have access to new products. At the heart of DNDi’s IP policy lies the belief that the lives of neglected patients are more important than the profit motive. However, convincing industrial and academic partners that this belief should influence their investment decisions continues to be a challenge. Decisions regarding the possible acquisition of patents, ownership, and licensing terms will be made on a case-by-case basis.

3. Negotiating with Industry

DNDi’s first opportunity to put into action its vision of IP came in October 2003 when it established preliminary contact with the French pharmaceutical giant sanofi-aventis regarding artesunate-amodiaquine, a fixed-dose artesunate-based combination therapy (FACT) for chloroquine-resistant malaria. Artesunate-combination therapies are considered an important addition to the arsenal of treatments for chloroquine-resistant malaria, especially in Africa, where more than a million children die each year from the disease. FACT was one of DNDi’s earliest projects operating under a grant from the European Commission’s International Cooperation and Development (EC-INCO DEV) programme. The terms of its contract with INCO-DEV described collaboration with an industrial partner (sanofi-aventis) for industrial validation, production, and distribution.

In keeping with these terms, DNDi established preliminary contact with sanofi-aventis, offering them the stable artesunate/amodiaquine fixed-dose combination (AS/AQ) for completion of development and industrial scale-up and to make the registered medicine available to malaria patients. At the time, the drug company already had a combination AS/AQ on the market but it was not a fixed-dose combination (two drugs in one tablet), as was the one DNDi had been able to develop.

Negotiations led, finally, to a contract agreeable to both parties that was signed in December 2004, and DNDi transferred its AS/AQ dossier to sanofi-aventis. The agreement was an innovative breakthrough. Both parties wished to make this easier-to-use combination available to the poorest patients, at an affordable price and manufactured to highest international quality standards. At its own cost, sanofi-aventis took full responsibility for the drug registration, as well as for the constitution of a WHO pre-qualification file.

DNDi was able to convince sanofi-aventis to agree to exclusivity of AS/AQ until first registration in a ‘reference state’⁴ or prequalification by WHO,⁵ after which the drug would be non-exclusive and available for production by any generic manufacturer without paying either sanofi-aventis or DNDi for the right to do so. The agreement also stated that sanofi-aventis would supply the drug at cost (as a generic) to the public sector, NGOs (for example, MSF), and international organizations, such as WHO and the United Nations Children’s Fund (UNICEF). Under the terms of the agreement, sanofi-aventis could market the product under a trade name in all territories—including disease-endemic countries where the generic product would be available—in the private sector (pharmacies) at a commercial price. For the information and the data made available to the private sector by DNDi, sanofi-aventis would pay DNDi a fee, amounting to 3% of net sales, for seven years after launch of the product. DNDi has decided to use this amount to further reduce the price of AS/AQ to the public sector.

This was DNDi’s first success. Each negotiation that followed for other projects was an equally uphill task as illustrated in the following example of a research agreement with the University of California, San Francisco.

4. Negotiating with Academia

Following the biotechnology boom during the last couple of decades, most universities see considerable financial potential in much of their medical research. University research departments now ensure that if this research is to be licensed to outside partners, then proceeds from any commercialization flow back to the university and the inventors. Protection of IP by the university is central to this, together with ensuring that the best commercial license is negotiated with the partner if a marketed product is the likely outcome of the research.

When DNDi first approached the University of California, San Francisco (UCSF), it sought to support research that might lead to new treatments for human African sleeping sickness. Both parties found ready agreement in the use of IP for research purposes. However the goal of DNDi was to commercialize the product of the research in a way that makes it accessible to patients, and its marketing strategy is somewhat contrary to normally accepted practice in the United States. DNDi aims to manufacture and sell its products for the lowest price possible. It would have been difficult for UCSF to find a less attractive partner!

At the start, major issues of contention were the requests by DNDi for:

• a royalty-free license to develop drugs arising from the research for commercialization in all disease-endemic countries
• freedom to manufacture the drugs in any country
• freedom from the requirement to patent the research outcomes for commercialization in any of the disease-endemic countries (Patents can add several million dollars to the cost of a drug.) UCSF retains the right to patent for other uses but not in a manner that will restrict DNDi’s use of the research.

Throughout the protracted negotiations, staff at the university’s business development department were supportive of DNDi’s IP policy and commercial goals. The main obstacle was simply the difficulty faced by the legal representatives when asked to step away from the standard pro forma protocol and negotiate an agreement that flew in the face of their obligation to negotiate the best return on IP. Fortunately, at the end, a compromise was reached that favoured DNDi very strongly, and all its requests were met. Equally gratifying was the comment from the staff of the UCSF commercialization departments that they gained tremendous personal satisfaction from the terms of the contract and from being involved in making new treatments available for the seriously neglected disease.

DNDi has learned some lessons from this experience. In many instances, legal opinions were drafted by third parties who were not familiar with the mission of DNDi, which slowed the pace of negotiations. Furthermore, the people with whom DNDi held negotiation talks agreed with the organization’s goals but often did not convey them effectively to outside legal representatives and other decision makers. During the final negotiations, however, DNDi interacted with all decision makers directly—their strong support of DNDi’s goals is reflected in the final draft of the agreement.

4. Conclusions

As clearly articulated in its IP Policy statement, DNDi is committed to managing IP in a manner that pragmatically and effectively advances its mission of providing the most vulnerable populations in developing countries with equitable access to critically needed medicines. Perhaps this is most clearly stated in the preamble of the DNDi IP policy statement:

The DNDi IP approach will be pragmatic, and decisions regarding the possible acquisition of patents, ownership, and licensing terms will be made on a case-by-case basis. DNDi will put the needs of neglected patients first and will negotiate to obtain the best possible conditions for them. The DNDi’s decisions regarding IP will contribute to ensuring access and encouraging further innovations.

By taking this realistic, yet creative, view of IP, DNDi seeks to advance best practices in IP management that will directly address global public interest. More importantly, by engaging in sophisticated, successful negotiations with both the public and private sectors to fulfil its dynamic vision, DNDi has demonstrated that this mission and policy is not simply an academic exercise. These negotiations skills, based on the foundation of the DNDi IP Policy statement, will ultimately ensure the implementation of DNDi’s mission with long-term benefits accruing to those who most need, yet can least afford, essential medicines.