Concerns about the process, principles of Medicines Patent Pool and the licence

10 October 2011

To: Denis Broun, Executive Director, UNITAID

     Ellen ‘t Hoen, Executive Director, Medicines Patent Pool

cc: Governance Board of Medicines Patent Pool

cc: Executive Board of UNITAID

Dear Ellen and Denis,

Many thanks to you and your colleagues for taking the time to meet with civil society community members from the Global South in Geneva on 2 October 2011.

We appreciate the fruitful discussion that took place, and we acknowledge the efforts undertaken to date by staff and representatives from the Medicines Patent Pool Foundation (MPPF). However, we have concluded that many of the concerns raised regarding the license agreement with Gilead Sciences, Inc. (Gilead) brokered by the MPPF were not clarified or addressed to our satisfaction. In general, we believe that the agreement fails to uphold the MPPF’s core and essential mandate to negotiate agreements that substantially increase affordable access to medicines for people living with HIV (PLHIV) around the world.

At the conclusion of the 2nd October meeting, we, as representatives of other community organizations, therefore stated the following three demands, which now have broad support. The MPPF, in conjunction with UNITAID, its founding partner, should:

1) Substantially revise or terminate the MPPF-brokered license agreement with Gilead, including any potential or pending agreementswith sub-licensees, given Gilead’s bad faith and the controversial terms of the MPPF-Gilead agreement;

2) Institute an immediate moratorium on negotiations of any new license agreements, including any new or pending agreements with Indian generic producers (potential sub-licensees to the MPPF-Gilead agreement) or with other multinational drug companies (potential new licensors) until such time as standard terms and conditions or a model agreement is agreed to; and

3) Re-evaluate the current structure of the MPPF, including its governance and administration, goals and mission, and implement comprehensive reforms designed to enhance its transparency, accountability and adherence to core principles of health equity.

We believe such steps are critical to address our dissatisfaction not only with the Gilead licensing agreement, but also with the inability or unwillingness of UNITAID and the MPPF to effectively address community concerns about the Patent Pool since it was first proposed.

Most notably, several letters have been sent to UNITAID or the MPPF since 2009, outlining general concerns about the MPPF and more recently about the MPPF-Gilead license. These letters came from advocates on HIV and access to medicines, including many PLHIV, from different regions of the world. Among the community-based and non-governmental organizations that have sent one or more letters to UNITAID or the MPP, or signed on to joint letters, are the International Treatment Preparedness Coalition (ITPC), the Initiative for Medicines, Access & Knowledge (I-MAK), the Lawyers Collective HIV/AIDS Unit (India), Grupo de Trabalho em Propriedade Intelectual da Rede Brasilieira de integração dos Povos (GTPI/REBRIP), the People’s Health Movement (PHM), the Asia-Pacific Network of People Living with AIDS (APN+), as well as organizations and activists working on HIV and access to medicines from India, Thailand, Central America, North Africa, and at least 70 groups which endorsed a joint Latin American letter. Our concerns as stated in these letters remain unaddressed and are not taken into consideration in decision-making.

As advocates and representatives of PLHIV and communities, we remain extremely worried about the content and process of the MPPF’s inaugural agreement with Gilead. Our key concerns are summarized below and supported by evidence attached to this letter (see attachments).

Summary of key concerns with respect to substantive content

1) The reliance on the original Gilead voluntary license (from 2006) as the template for the MPPF-Gilead 2011 agreement. The license agreement instead should have been based on standard terms and conditions for licenses developed in advance by the MPPF with community input. Ideally, these terms and conditions should be non-negotiable when the MPPF is brokering any agreement with a pharmaceutical company.  There has to be a threshold of concessions that the MPPF simply will not cross in negotiations with multi-national pharmaceutical companies;

2) The restricted geographical scope of the license for tenofovir (TDF) that excludes over 500,000 patients in more than 43 countries, and a greater number excluded for the pipeline medicines (e.g., Botswana and Namibia). The acceptance of restrictive terms and the lack of criticism of Gilead by the MPPF and UNITAID for these exclusions are of great concern. Furthermore, the claims made by MPPF of the benefits of the scope of the new license are exaggerated and not based on any empirical assessment. The benefit of the addition of 16 new countries in the TDF licensed territory is overstated. Those countries represent less than a one percent increase in patient coverage, whereas the addition of middle-income countries excluded from the agreement would have represented a 12 percent increase in access, significantly expanding the market;

3) The undermining of the free and full use of TRIPS flexibilities by countries through restrictive provisions in the licences including:

(a) circumventing the 2016 TRIPS deadline for least developing countries (LDCs) by allowing royalties on medicines supplied to them, even though these countries do not have to impose patents on essential medicines until 2016;

(b) the imposition of restrictions on the use of compulsory licenses (CLs) by requiring the prior permission of Gilead, thus affecting both importing and exporting countries (and placing additional barriers on the use of the August 30 Decision);

(c) blocking the ability of excluded countries to parallel import generic medicines, by allowing Gilead to directly intervene and cancel generic companies’ distribution agreements;

(d) undermining patent opposition work by requiring royalties to be paid until all related patents, including undecided applications, go through the entire legal appeals process and are finally rejected, which often takes several years; and

(e) the MPPF’s licensing of poor quality patents legitimizes and endorses weak patentability standards for medicines, which many agree requires reform and contradicts the flexibilities enshrined in the TRIPS agreement;

4) The introduction of royalties on drugs even in countries and regions where patents do not exist, and the payment of royalties and continuing restrictions on generic companies even before patents are granted;

5) Restrictions imposed through the licenses on generic production in any country except India, and through the control over the production and supply of active pharmaceutical ingredients (APIs). These provisions limit local generic production worldwide, which is essential to enhancing competitiveness and self-sufficiency and is one of the few options for countries excluded from the licensing agreement;

6) The MPPF’s inexplicable championing of the “unbundling” provision of the licence, which allows generic companies to opt out of some drug licenses while keeping others. No explanation has been provided to date as to why the MPPF did not negotiate four separate licences;

7) The MPPF’s failure to explain to the public the consequences for generic companies of severing the TDF license. If a generic company severs on TDF, it also loses the ability to produce and supply emtricitabine;

8) The MPPF’s incomprehensible waiver of its legal standing and right to enforce the provisions of the license in any dispute between Gilead and a sub-licensee at a secret arbitration. This neuters the MPPF’s ability to affect much of what occurs after a sub-licensee agreement is signed, including ensuring that the licence is implemented in a manner that increases access to medicines. This refusal to accept legal responsibility is inexplicable and unwarranted, hampering not only the MPPF’s effectiveness but also the influence of civil society groups over the implementation of any and all licenses.

Summary of key concerns with respect to process and MPPF principles

1) An absolute lack of transparency on the terms of reference, roles and responsibilities, selection criteria and selection process of the ad-hoc Expert Advisory Group (ad-hoc EAG), which was consulted during the MPFF’s negotiations with Gilead, and the permanent EAG currently being assembled. Furthermore, we perceive a lack of transparency around the EAG’s process, provision of inputs, and the extent to which these inputs are integrated into decision-making. Also of concern is the lack of involvement of PLHIV, and the under-representation of key organizations working on access to medicines for HIV/AIDS in the global South on the EAG (members of which were noted by the MPPF at the meeting on 2 October 2011). 

2) The refusal by MPPF staff to disclose i) the contents of the review by the ad-hoc EAG on the Gilead license agreement prior to its approval, and ii) the contents of the limited (if any) due diligence the MPPF may have conducted;

3) The lack of clarity around the process of determining whether a license negotiated by the MPPF meets the primary purpose for which the MPPF was created: to improve the health of people in low- and middle-income countries;

4) The provision stating that the MPPF is to receive 5 percent of all royalties paid by sub-licensees to Gilead up to the amount of $1 million per annum. We believe this represents poor judgment and a serious conflict of interest. (We note, though, that at the meeting on 2 October 2011, MPPF staff specifically acknowledged that even the appearance of conflict of interest in these agreements is harmful—and will consider the removal of this language in the existing license agreement and any potential future ones);

5) The public relations strategy of the MPPF around this agreement has confused and misled the public. On 12 July 2011, the MPPF-Gilead agreement was announced in London. Simultaneously, Gilead made a public announcement in India extending its partnership with four Indian generic pharmaceutical firms—Ranbaxy, Hetero, Matrix and Strides Arcolab—to produce and market two pipeline HIV drugs (elvitegravir and cobicistat) and a combination product known as the “Quad”. These separate agreements had no relationship to the MPPF and ensured these companies would remain outside the Pool.  These separate agreements with the four Indian companies segmented the market for the drugs in the pipeline, and completely undermined the MPPF-Gilead agreement. It is troubling that the MPPF representatives were aware of these “preferred partner” agreements, and yet did not publicly criticize Gilead for acting in bad faith or draw sufficient attention to the implications of the side deals.

Additionally, these side licenses require the Indian generic companies to pay royalties of between 10 and 15 percent for cobicistat, elvitegravir and the Quad in countries not included in the MPPF license (Botswana, Ecuador, El Salvador, Indonesia, Kazakhstan, Namibia, Sri Lanka, Thailand and Turkmenistan). To date, though, the MPPF and UNITAID have refused to comment on Gilead’s actions. To us, this signals that the MPPF and UNITAID value their relationship with a for-profit company far more than the principles on which both organizations were established; and

6) The exaggerated claims of actual benefit and potential impact in public relations by the MPPF, and supportive statements of these claims by UNITAID and other stakeholders, about this license and the MPPF’s overall strategy. These actions are both misleading and damaging as they allow originators and decision-makers to be complacent and satisfied with the notion that the MPPF solves most issues regarding access to medicines. Given that the licensing agreement leaves behind half a million patients, both UNITAID and the MPPF should reflect seriously on celebrating these licenses in the press.

In addition to all of these issues, one central question remains unanswered: why did the MPPF accept this flawed agreement? This is particularly puzzling because the MPPF specifically acknowledged in post-agreement statements and press releases that it is not happywith several aspects of the MPPF-Gilead agreement (including many of the shortcomings we list above).

Nevertheless, MPPF staff at the meeting on 2 October 2011 expressed their opinion that the license brokered with Gilead is a positive step forward. We strongly believe the opposite, however, and feel that a full assessment needs to take place (a post-mortem) both with respect to substantive content and process of this agreement. Not only is the agreement weak, but the discussion on 2 October 2011 reinforced our fears that at best, the agreement will remain mired in controversy, jeopardizing the future work and credibility of UNITAID and the MPPF.

Support and cooperation in the future

Though we are displeased with the MPPF-Gilead agreement, we want to stress our willingness to work with UNITAID and the MPPF to find a way forward that honours the long history of community-driven activism on access to medicines and the role of technical experts who have supported this effort. Our support is contingent upon the MPPF’s acceptance of the following underlying principles and acknowledgment of the facts listed above:

I) The current global trade and patent regime is a significant obstacle to access to medicines, as is an ill-defined “managed competition” model for improving access;

II) The undue and oversized influence of multinational drug companies on the MPPF’s work thus far has hindered its ability to successfully enhance access to medicines; and

III) The importance of independent generic companies and robust generic competition must be recognized and supported as key vehicles for access to affordable medicines.

Copies of the presentations that were made at the consultation are attached for your information and understanding. We are available to answer any questions you have.

We greatly value your attention to our concerns, and we look forward to hearing your response.

Sincerely,

Civil Society representatives from:

Sarah Zaidi, Executive Director, ITPC Global Secretariat, Thailand

Denis Godlevskiy, EECA Community Advisory Board, Russia

Dina Iskander, Egyptian Initiative for Personal Rights, Egypt

Fatima Hassan, Board member of ITPC, South Africa

Gopa Kumar, Third World Network, India

Gregg Gonsalves, Board Member of ITPC, USA

Julie George, Lawyers Collective HIV/AIDS Unit, India

Kajal Bhardwaj, Lawyer specializing in HIV, health and human rights, India

Maria Lorena Di Giano, Argentinian Network of Women Living with HIV/AIDS, Argentina

Nimit Tienudom, AIDS Access Foundation, Thailand

Othman Mellouk, ITPC North Africa, Morocco

Priti Radhakrishnan, Initiative for Medicines, Access & Knowledge (I-MAK), USA

Sangeeta Shashikant, Third World Network, Switzerland

Sergio Souza Costa, member of Grupo de Trabalho em Propriedade Intelectual da Rede Brasilieira de Integração dos Povos (GTPI/REBRIP), Brazil

Tahir Amin, Initiative for Medicines, Access & Knowledge (I-MAK), USA

Addie Guttag, Board member of ITPC, USA

John Rock, Board member of ITPC, USA

Andrew Hunter, Asia Pacific network of sex workers, Thailand

Ah Song, Guangdong Shenzhen A+A Support Group, China

Alessandra Nilo - LACCASO - Latin American Council of AIDS Service Organizations (LACCASO), Brazil

Amani Massoud, Egyptian Initiative for Personal Rights, Egypt

Arthur Vuattoux, Board member, Act Up-Paris

Basanta, National Association of people living with HIV (NAP+N), Nepal

Caitlin Chandler, HIV Young Leaders Fund, USA

Charbal Mydaa, Helem, Lebanon

Denovan Abdullah, JOTHI, Indonesia

Do Dang Dong, Vietnam network of positive people (VNP+), Vietnam

Duan Yi, Beijing Youan Hospital Home of Loving Care, China

Eddy Razon, Board of trustee of Pinoy Plus association, Phillipines

Eli Abu Mehri, OSE Organization, Lebanon

Francisco A. Rossi. B, Board member of ITPC, Columbia

Francisco Pedrosa, Grupo de Resistência Asa Branca (GRAB), Brazil

Dr. M. Guemmama, Association GREEN TEA, Jeunes contre le SIDA et la Drogue-

Tamanrasset. Algeria

Hakima Himmich, Chair of Association de Lutte contre le sida (ALCS), Morocco

He Wei, Hubei Wuhan Golden Harbor, China

Imran Zali, Association of people living with HIV, Pakistan

Jacques E. Mokhbat, Libanease AIDS Society, Lebanon

James Clovis Kayo, Central Africa Treatment Action Group (CATAG), Cameroon

Jerome Martin, Act Up-Paris, France

Li Ye, Hebei Cangzhou Aiwujie PLHIV Care Group, China

Lin  Ziaojie, Sichuan Chengdu Tongle PLHIV Support Group, China

Loon Gangte, President of Delhi Network of Positive People (DNP+), India

Lu Feng, Fujian Castle of Love, China

Lucy Chesire, TB Cares, Kenya

Magid El Rabeiy, Friends of life, Egypt 

Mário Scheffer – Grupo Pela Vidda-SP (Pela Valorização, Integração e Dignidade do Doente de Aids), Brazil

Martha Tholanah, International Community of Women Living with HIV/AIDS in Zimbabwe, Zimbabwe

Michaela Clayton, Aids Rights Alliance of Southern Africa (ARASA), South Africa (TBC)

Nadia Rafif, CSAT coordinator for MENA region, ALCS, Morocco

Nataliya Leonchuk, Eastern European and Central Asian Union of PLHIV

Obatunde Oladapo, Treatment Action Movement (TAM), Nigeria

Olayide Akanni, Journalists Against AIDS, Nigeria

Pauline Londeix, Act-Up Paris, France

Ragia El Gerzawy, Egyptian Initiative for Personal Rights, Egypt

Ren Guoliang, ITPC-China, China

Rose Kaberia, East Africa Treatment Action Movement (EATAM), Kenya

Sa Jia, Shanghai Meili Rensheng Health Promotion Service Centre, China

Sany Kozman, Friends of Life in Alexandria, Egypt

Sergio Rodrigues, Projeto Esperança de São Miguel Paulista (PROJESP), Brazil

Sindi Putri, ITPC-Indonesia, Indonesia

Shiba Phurailatpam, Asia Pacific Network of People Living with HIV/AIDS (APN+), Thailand

Sylvere Bukiki, West Africa Treatment Action Group (WATAG), Ivory Coast

Thomas Cai, AIDS Care China

Wang Peng, Hebei Light of Love PLHIV Care Group, China

Wu Tao, Henan Sanhe Working Group, China

Xiao Kan, Hunan Changsha Friends and Love Home

Xiao Xiao, Shandong Qingdao Aixinxing working group, China

 Yetunde Ipinmoye - for Positive Action for Treatment Access (PATA), Nigeria

Youssef Awaad, El Shehab Center, Egypt

Zhao Minghui, Zhengzhou Home of Care and Love, China

Zhou Wangchun, Jiangsu Suzhou Enjoying Sunshine Together, China

Zhu Kun, Henan Mutual Assistance Association, China

Zhu Longwei, Henan Zhecheng Citizen's Association of HIV Prevention and Treatment, China

 

Act-Up Paris, France

AIDS Access Foundation, Thailand

ANISS Association, Algeria

Association JOUR of people living with HIV, Morocco

Empower Foundation, Thailand

Foundation for AIDS Rights, Thailand

Foundation for Consumers, Thailand

Friends of Life, Association of people living with HIV, Egypt

Gestos - Soropositividade, Comunicação e Gênero, Brazil

Service Workers in Group (SWING), Thailand

Sidaction, France

Thai Network of People Living with HIV/AIDS (TNP+), Thailand

Thai NGO Coalition on AIDS, Thailand

Argentinean Network of Positive People (Redar Positiva)

2- Grupo Efecto Positivo- Argentina