Guest Commentary

A path forward on access & IP for COVID vaccines and beyond: Guest Commentary

Former Gilead execs see opportunity to revitalize global cooperation and multilateral institutions

A pair of former Gilead executives see an opportunity to revitalize global cooperation and multilateral institutions.

An old African proverb states that if you want to go fast, go alone. But if you want to go far, go together. As the WTO Trips Council convenes to discuss access and patents in the context of COVID, it’s time to create a comprehensive set of principles and standards that will serve as a template for all other pandemic responses going forward.

Such an undertaking cannot be accomplished by one organization such as the WTO, or by one act such as waiving IP. Whatever the decisions, a viable outcome will only be accomplished if we go together and find a middle ground that is win-win-win. The WTO acting alone would be like one hand trying to clap.

Success depends on a coordinated and strategic approach, incorporating numerous aspects and multiple steps.

Voluntary licensing should be at the core of a global, standard set of tools to address urgent medical crises such as COVID, but this strategy alone is not enough. An array of actors must play their roles and wield tools that complement and incentivize the voluntary licenses.

Key roles will have to be played by governments in both high- and low/middle-income countries, international organizations such as the WHO and WTO, civil society, and other private actors in addition to the innovator biopharma companies.

The voluntary licensing approach taken by Gilead Sciences Inc. (NASDAQ:GILD), which began in 2006, has allowed millions of people across low- and middle-income countries to have access to low-cost, high-quality generic medicines for HIV, viral hepatitis and COVID-19.

But the act of voluntary licensing is the easy part. For any international approach, the solution goes far beyond simply a WTO action on IP rights.

Numerous other pieces of the puzzle need to fit together with voluntary licensing to make a whole and enduring solution to the global access challenge — a continuation of ad hoc approaches means failure.

A global compact built around the following series of factors would not only provide a structure for preparedness and response to future health emergencies, but could help revitalize multilateral institutions that are struggling to demonstrate their saliency. Moreover, it would go a great distance to reducing global divisions and polarization. Together, everyone can go far.

Quality standards and a regulatory pathway

Technology Transfer: Technology transfer by innovator biopharma companies, in conjunction with voluntary licensing, should be a standard practice to enable the speedy transition to generics and ensure that generics manufacturers benefit from the highest manufacturing standards upheld by the innovator company. Gilead offered this up front as part of its licensing agreements.

Tentative FDA Approval and WHO Pre-Qualification: Two strategies, tentative FDA approval and WHO Pre-Qualification, serve important dual purposes of incentivizing high-quality standards and stimulating voluntary licensing by providing pathways for expedited approvals by critical agencies.

The U.S. government’s PEPFAR (President’s Emergency Program for AIDS Relief) program represents a model to be replicated by other leading regulatory agencies for future pandemics.

Under PEPFAR, FDA enabled an expedited review process in which generics manufacturers operating under voluntary license could submit an ANDA that addressed the safety, efficacy, manufacturing and quality standards, while referencing the clinical and preclinical sections of the original manufacturers’ data on file with FDA.

A tentative FDA approval did not allow for marketing in the U.S., due to existing patent protections, but qualified the product for sale in resource-challenged countries under the PEPFAR program. PEPFAR could only purchase generic medicines that gained tentative approval.

Note that tentative FDA approval in effect created an alternative to the WHO Pre-Qualification process. Both are intended to ensure minimum quality standards are met; however, WHO Pre-Qualification generally takes much longer and is quite costly for generics manufactures. The WHO Pre-Qualification process should be improved, to provide a pathway equal in efficiency to FDA tentative approval.

Regulatory Pathway in Low/Middle Income Countries: Countries should agree to put in place a Fast-Track regulatory approval pathway for COVID-19 and other health emergencies, for medicines manufactured under voluntary license.

This is an incentive for manufacturers to move rapidly to implement voluntary licenses and submit their dossiers for approval in countries where the need for the medicines is great.

It is important that countries commit to ensuring that the innovator medicine be approved before or at the same time as the licensed generics. The innovator (or “branded”) regulatory submission is needed for generics manufacturers to have the clinical and preclinical data of the original manufacturer’s dossier for their own applications for regulatory approval.

There are many cases where countries have approved a licensed generic product before an innovator’s, even though the regulatory submission was based on clinical data provided by the innovator.

This backward regulatory approval is a practice that must be ended since it represents one of the critical factors that disincentivize biopharmas from leaning in as true partners in this process. Fixing it would demonstrate those governments’ partnership bona fides.

Furthermore, such regulatory rationalization would align well with needed rationalization of pricing schemes (discussed below), serving the interests of stimulating and facilitating the global expansion of voluntary licenses across the pharma industry.

Capacity Building: Adequate Storage, Diagnostics, Training & Education

A key barrier developing countries face as they respond to pandemics and other life-threatening illnesses is their deficit in medical capacity and infrastructure. Addressing capacity deficits is something that all actors must join hands on and this must be coordinated with and implemented alongside any pandemic response volunteer licenses.

During the rollout of Gilead’s voluntary licensing program to treat HIV/AIDS, a sobering reality was that some countries lacked the necessary medical infrastructure to treat patients.

In some cases, there weren’t enough available doctors or the necessary training to get doctors up to speed on new therapeutic options to treat HIV/AIDS. Additionally, the necessary diagnostic tools were missing; hospitals lacked both the staff and equipment necessary to make a proper differential diagnosis. And there was inadequate cold chain and storage for medicines. Gilead’s access program included resources devoted to helping address many of these issues.

The lead role, however, must be played by host nation governments, which must do their utmost to expand access to healthcare more broadly, and donors must step up as well, from governments to private actors and NGOs.

Financing of Health: PEPFAR, the Global Fund for HIV, TB and Malaria, and myriad other entities have budgeted untold billions of dollars to the HIV response. In addition to purchasing medicines, these aid dollars were spent on logistics, diagnostics, infrastructure, training, capacity building, and many other aspects of creating a system by which the HIV/AIDS challenge could be met.

The same multiplicity of resources and intensive coordination among actors will be essential for combating any pandemic.

Government Policy, Participation & Support

Patent-related incentives: The U.S. government could further incentivize pharmas that hold patents on life-saving medicines via the Patents for Humanity Program, which rewards patent owners who use their innovative medicines to address humanitarian challenges.

The winners receive a certificate that can be used to accelerate the companies’ patent applications. This is a valuable voucher that can be used to accelerate future product submissions to FDA, or the voucher can be sold to another company. Other governments around the world could similarly reward “humanitarian” innovations.

Patents in Low/Middle Income Countries: Although the spotlight in debates on access to medicines commonly falls on the WTO’s waivers of certain patent requirements for poor countries, voluntary licenses provide an entirely different incentive process.

Patent protections in conjunction with voluntary licenses are an important part of the quality assurance equation — this ensures that only qualified producers, the voluntary licensees — will be authorized to produce the medicines.

This places priority on two factors: expedited patenting by governments of low/middle income countries for innovator medicines offered under voluntary licenses; and patent enforcement prioritized by the same governments for innovator medicines made available under those licenses. In addition to ensuring quality, the policy provides two important incentives for innovator companies to enter voluntary licenses. The outcome is win-win. The tired “us versus them,” Big Pharma versus low/middle income countries, adversarial discourse on patenting and enforcement simply drives innovators and the needy apart — and towards a lose-lose loop.

Pricing and Price Controls in Low/Middle Income Countries: Pricing policies are also part of the equation. The Gilead experience taught us that the roles of the innovator product and government pricing policy can be vastly underappreciated.

We set a price in low/middle income countries (countries where Gilead’s Indian licensees were authorized to sell) derived from a combination of gross national income (GNI) per capita and disease burden metrics.

This price was a fraction of the Gilead-branded price in high-income countries. This was not so that the Gilead product could remain competitive in markets where multiple licensees were selling their licensed generic versions for less. Generics would always, logically, price the drugs below Gilead’s branded price. However, if Gilead was not in the market with its brand, or if Gilead had priced its branded product as it did in high-income countries, then the generic prices would climb to levels that undermined access for the poorest of the poor and reduced the ability of the governments to afford to treat their populations.

As cynical as it may sound, more than enough situations arose where governments in low/middle income countries undercut the entry of a low-priced Gilead-branded drug (either deliberately or de facto through regulatory delays or other impediments) with the effect of facilitating profiteering by local companies who often would mark up the licensed generic drugs that they were distributing in that country — resulting in negligible access to those medicines by the neediest people in that country.

In some instances, we also observed governments adding import taxes or tariffs, driving up the cost of the originator product and causing an overall rise in all drug prices in the country, reducing access further.

Price controls

One of the big challenges is how to address the access needs of countries that have sizeable wealthy and middle-class populations layered atop large populations of poor people.

Billionaires, wealthy and middle-class members of the “new economy” in India, for example, conservatively number between 50 million and 100 million, a larger population than the entire population of most high-income countries.

Instead of a one-size-fits-all price control policy that sets national prices at levels needed by the poor, a tiered pricing approach would set a low price for national, state and local government medical systems serving the majority of their populations, yet allow higher pricing for those who can afford it.

Beyond the basic fairness, this provides a practical benefit. Generics manufacturers in low/middle income countries have perfected low-margin high volume business practices in markets with lower labor costs.

Innovator companies mostly operate out of higher cost markets including those with much higher labor costs. At Gilead, we witnessed price controls set to cap generic drug prices that were below the cost of manufacturing the Gilead-branded medicine, essentially blocking the branded product from the market — even though wealthy people in those same countries could afford the usual global luxuries.

It makes no sense for those same people not to have the choice of branded medicines when those medicines are made available at lower cost to the poorer populations of the country via voluntary licenses. An exclusion or waiver from price controls for branded medicines where those same medicines are available via voluntary licenses would provide an incentive to innovators to enter into those voluntary licenses knowing that a fraction of the market might still be available.

Advance Purchase Agreements: Governments, multilateral organizations, and private donors/NGOs should commit to purchasing standard quantities of product so that manufacturers have a sense of the demand and can plan effectively to address the overall need.

A good example is what has occurred with COVID-19 vaccines, wherein NGOs and G7 governments were willing to provide advance purchase orders of large quantities of vaccines. This enabled manufacturers to source raw materials and quickly ramp up manufacturing given solid purchase orders in hand.

Pharma company commitment

The pharmaceutical industry has a huge role to play in this entire process. In addition to supporting the R&D costs, pharma’s role would entail entering into voluntary licensing agreements to serve the needs of emerging economies hit hardest by pandemic, and providing technology transfer, know-how and technical assistance to licensed generic entities that are proceeding with production of medicines.

Innovator companies must be committed to the process and cannot simply hand things over and walk away. Generics manufacturers run into manufacturing problems from time to time and require assistance from the originator company. Originator companies typically have a cadre of experts, as well as training and educational materials, that could be of value to governments, NGOs and generics manufacturers as these entities work to train their in-country staff on the appropriate use of medicines.

Clifford M. Samuel recently served as SVP for global patient solutions at Gilead, overseeing all operations across low-, lower middle-, and middle-income countries. Claudio Lilienfeld was an adviser to Samuel and served as senior director for international government affairs at Gilead. Both are now independent consultants.

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