Introduction

Pursuant to a license negotiated by the Medicines Patent Pool (MPP) with ViiV Healthcare (ViiV), an important new antiretroviral medicine, dolutegravir (DTG), will soon be available via generic competition in all low- and lower-middle-income countries, and a significant number of upper-middle-income countries as well. DTG is a highly recommended integrase inhibitor which highly effective, durable, inexpensive to produce, and relatively safe with few side effects. It is already an alternative WHO recommended first-line medicine and will probably become the global standard of care following trials on use of DTG to treat pregnant women and people with TB.^[1] 

Controversy has arisen in the past within the access to medicines movement over the impact of MPP voluntary licenses. The voluntary licenses negotiated by the MPP with originator companies have always had an explicit territorial scope – a list of countries and territories where generic sub-licensees can sell generic equivalents of antiretroviral or, in one instance, a hepatitis C direct acting antiviral. Understandably, activists in excluded countries tend to be critical of territorial license restrictions, which typically exclude so-called pharmerging countries – middle-income countries with considerable commercial potential. However, the MPP has consistently negotiated license terms in its licensing agreements that allow sales outside of the formally licensed territory in specified circumstances. A standard provision allows sales when required compulsory licenses have been granted as required in countries of production or sale. An even better set of provisions allows sales in countries where no blocking patents are in place.Indeed, some countries, including Botswana and Brazil have already adopted DTG as part of the standard first-line therapy. Because of the importance of DTG, both generic sub-licensees and developing countries are concerned to understand which territories can be serviced pursuant to MPP sublicenses. For countries included in the defined licensed markets, the answer is clearly. But a significant number of additional countries are eligible for “indirect” coverage because of a licensing term that allows sales from most countries of actual production to any country without a blocking patent. Until the MPP can succeed in getting inclusive licensing terms covering all low- and middle-income countries (LMICs), this unique clause in the MPP-ViiV license should be adopted in future licenses, as it is a best practice to date in terms of expansive coverage.

This analysis will document the direct and indirect territorial scope of MPP’s DTG license. ViiV licensed DTG separately for pediatric use and adult use on March 31, 2014.^[2] The original pediatric license directly authorized sale in 121 countries where 99.2% of children living with HIV in the developing world lived. The initial adult license covered a significantly smaller number of 73 countries where nearly 90% (actually 86.6%) of people living with HIV lived.^[3]  The territorial scope of the MPP/ViiV DTG licenses were subsequently expanded on April 25, 2016 to cover all remaining lower middle-income countries, including Armenia, Moldova, Morocco, and Ukraine where granted patents otherwise blocked access.^[4] This territorial expansion added coverage benefits for 283,000 additional people living with HIV.^[5] A possible additional intellectual property barrier – data exclusivity – is waived and sub-licensees have the right to combine DTG with other approved ARVs. There are no royalties based on the country of production or for pediatric formulation sales. The adult license is royalty-free in 82 countries and royalty-bearing in 10 countries where tiered royalty rates are applied as follows: Philippines; India and Vietnam and Moldova (5%); Egypt, Indonesia, Morocco, Armenia and Ukraine (7.5%); Turkmenistan (10%).^[6] It is important to note that in all of these royalty-bearing markets authorized sales are permitted only pursuant to a procurement process within a Public Market, ^[7] and subject to prior approval by ViiV.^[8] However, Public Markets are broadly defined not just to include the public sector, but also NGOs, multilateral organizations, a major global health programs like PEPFAR and the Global Fund to Fight AIDS, TB, and Malaria.^[9]

As of September 2016, the MPP had entered into sub-licenses with nine generic companies, Cipla, Desano, Emcure, Hetero Labs, Laurus Labs, Lupin, Micro Labs, Mylan, and Strides.^[10] Given that two generic sub-licensees, Cipla and Mylan, applied for WHO prequalification on November 10, 2016,^[11] with a decision expected in the near term, clarification of the countries where generic equivalents can be marketed and used with impunity is vitally important both to the sub-licensees and to governments, procurement agencies, and treatment advocates.

This analysis will start with a brief discussion of the relevant licensing terms that allow indirect territorial coverage and will then specify the expanded “indirect” territory of the two DTG licenses relying on data provided in the MPP/ViiV licenses since the licenses disclosed a list of pending and granted patents in the 121 pediatric-licensed territories and granted patents in all other low- and middle-income countries. The analysis also relies on information available from the MPP’s MedsPal database documenting both patent status and licensed access status of DTG in most LMICs.^[12]

Licensing terms allowing sales in countries with no blocking patents

As briefly introduced above, the MPP/ViiV licenses contain an express term allowing sales in non-territories so long as no active patent would be violated in the country of sale or if a compulsory license has been issued.

DTG adult^[13] and Pediatric^[14]

Amended Adult License and Pediatric License ¶2.4. For avoidance of doubt, it shall not be a breach of the Sublicence for Sublicensees to manufacture, use, sell or supply Products or Raw Materials outside the Territory where such activities would not infringe Non-Territory Patents, including, without limitation, where a country outside the Territory has issued a compulsory licence on Non-Territory Patent(s) provided that Sublicensee is authorised to supply such country under the compulsory licence and such use is within the scope of the compulsory licence.

Amended Adult Sublicense ¶2.5 and Pediatric ¶2.4. For avoidance of doubt, it shall not be a breach of this Agreement for licensee to manufacture, use, sell or supply Products or Raw Materials outside the Territory where such activities would not infringe Non-Territory Patents, including, without limitation, where a country outside the Territory has issued a compulsory licence on Non-Territory Patent(s) provided that Licensee is authorised to supply such country under the compulsory licence and such use is within the scope of the compulsory licence.

Accordingly, generic sub-licensees can sell outside of the formally licensed territories without legal risk, though supply of a non-territory country is only permitted if there is no blocking patent in the non-territorial country of production and/or non-territorial country of import/use. Paragraph 2.1 of the Amended Adult Sublicense Agreement allows generic licensees within the territory to manufacture and sell in Raw Materials and DTG Products in Permitted Markets for Adult Patients. This provision, which applies to almost all of the current MPP DTG licensees, allows an Indian licensee to supply countries like Thailand, Argentina, Peru, Venezuela, and Tunisia among others because they have no non-territorial patents in effect. Paragraph 2.2 of that Agreement clarifies that licensees can manufacture outside the territory despite a domestic patent solely for the purpose of supply product or raw materials for ultimate use in permitted markets in the designated territory. However, there is no express permission in either paragraph allowing manufacture and sale outside the licensed territory. Paragraphs 2.4 and 2.5 cited above allow licensees to manufacture and sell outside the territory, but only if no Non-Territory Patent would be infringed. Such infringement could occur either because of a blocking patent in the Non-Territorial country of manufacture or in the Non-Territorial country of use.^[15] Thus, for example, if there were a licensed generic producer in Brazil or China, where there are non-territorial patents in effect, that producer could supply countries in the permitted market, but not upper-middle-income countries not in the Permitted Markets.^[16]

Paragraph 2.4, thus immediately expands the “effective” territorial coverage of the licenses for some licensees (all territorial licensees and some non-territorial licensees where there are no blocking Non-Territorial Patents) once we take ViiV DTG disclosed patent landscape into account. As will be seen below, the effective expansion in terms of adults living with HIV is significant – 3% of people with HIV and almost one million people in absolute numbers; in contrast, the market expansion for children is relatively negligible. Even though, this expansion may not offer significantly greater incentives for generic entry in smaller markets once the costs of registration and establishing distribution systems are taken into account, reduced prices from generics – should they materialize – would be quite significant for patients or government payers. In addition, these licensing provisions will greatly expand opportunities for local production in countries like Thailand, which might desire to import DTG API but produce final formulations domestically.

One caveat should be added to this analysis, which covers patent questions only. In addition, data exclusivity on DTG may temporarily delayed permissible registration and sale of DTG in non-territorial countries, for example Chile, that are otherwise within the effective, indirect coverage of the MPP-ViiV license. Fortunately, many non-territorial countries have not adopted data exclusivity, for example, Argentina and Venezuela, and thus registration of generic equivalence can proceed without restraint or delay.

Direct and indirect territorial coverage and countries still excluded

As Table 1 below describing the adult territorial coverage shows, in addition to the 92 licensed countries/territories there are an additional 38 countries/territories where no blocking patents are in force and thus generic sales can be made for DTG as a single dose or in a combination other than ABC/3TC/DTG, e.g. the WHO recommended combination TDF/3TC/DTG.^[17] Many of these countries, including for example Thailand, Argentine, Peru, Venezuela, Costa Rica, Panama, Dominican Republic, Ecuador, Iran, and Tunisia, have historically been excluded from MPP and other voluntary licenses. These additional countries/territories increase the effective coverage rate of adults living with HIV to 91.4% – a 3% expansion.

Each remaining exclusion obviously creates an access and equity issue, and there are 14 middle-income countries excluded from direct or indirect coverage because of presently granted patents: Algeria, Azerbaijan, Belarus, Brazil, Bulgaria, China, Colombia, Kazakhstan, Malaysia, Mexico, Mongolia, Romania, Russia, and Turkey. The total population of adults living with HIV in the excluded territories is 2,859,050. As provided in ¶2.4, one or more of these countries could become eligible for permitted generic supply but only if compulsory licenses were issued or the patent expired or was held invalid.

As shown in Table 2, the situation with respect to expanded indirect coverage is much the same for pediatric licenses. In addition to the 121 countries/territories already licensed, there are an additional 15 countries/territories where sales are permitted because of the absence of a blocking patent. The effective pediatric territorial coverage becomes 99.2% with 9 LMICs excluded: Belarus, Brazil, Bulgaria, China, Kazakhstan, Mexico, Romania, Russia, and Turkey. The excluded pediatric population living with HIV is 27,315.

Table 1: Direct and Indirect Territorial Inclusions – MPP/ViiV Adult DTG License

Table 2: Direct and Indirect Territorial Inclusions – MPP/ViiV Pediatric DTG License

Conclusion

This brief analysis clarifies where generic sales of dolutegravir will be permitted pursuant to the MPP/ViiV adult and pediatric licenses and where such sales will be prohibited. The MPP-ViiV license now has the broadest effective geographical scope of any adult MPP license because of its direct and indirect coverage effects – effects that have been won because of allowance of supply to countries without non-territorial patent in effect. Although some of the added 37 countries/territories are small, many of them are larger upper-middle income countries historically excluded from generic supply and nearly one million people with HIV will now have expanded access to affordable generic DTG of assured quality. However, ViiV does have blocking patents in Tier One pharmerging countries, Brazil, China, and Russia, and it has also filed and been granted patents in many Tier Two pharmerging and former Soviet countries, all of which are also upper-middle income. Even here, however, the MPP license facilitate future generic access by clarifying that countries can be supplied if compulsory licenses are issued.

Professor Brook K. Baker, Health GAP (Global Access Project) & Northeastern University School of Law, Program on Human Rights and the Global Economy.

[1] Gupta A, Juneja S, Vitoria M, Habiyambere V, Nguimfack BD, et al. (2016) Projected Uptake of New Antiretroviral (ARV) Medicines in Adults in Low- and Middle-Income Countries: A Forecast Analysis 2015-2025. PLOS ONE 11(10): e0164619. https://doi.org/10.1371/journal.pone.0164619.

[2] MPP, Medicines Patent Pool, ViiV Healthcare Sign Licence for the Most Recent HIV Medicine to Have Received Regulatory Approval (April 1, 2014), available at: http://www.medicinespatentpool.org/medicines-patent-pool-viiv-healthcare-sign-licence-for-the-most-recent-hiv-medicine-to-have-received-regulatory-approval/.

[3] Ibid.

[4] MPP, ViiV Healthcare, Medicines Patent Pool Extend Licence for Dolutegravir to all Lower Middle-Income Countries (April 25, 2016), available at: http://www.medicinespatentpool.org/viiv-mpp_extend-licence-for-dtg-in-all-lower-mics/.  The amended adult license is available at: http://www.medicinespatentpool.org/wp-content/uploads/Amended-and-Restated-ViiV-MPPF-Adult-Headlicence-dated-22-April-2016-Executed-copy.pdf; the amended adult sub-license is available at: http://www.medicinespatentpool.org/wp-content/uploads/Schedule-1-Form-of-Sublicence-to-Amended-and-Restated-ViiV-MPPF-Adult-….pdf.

[5] Because the other added lower-middle income countries were already within the indirect scope of the MPP license, as discussed later in the article, the effective expansion of people covered was only people with HIV living in the previously patent blocked countries.

[6] Ibid.

[7] See Article 1.37 Amended Sublicense Agreement. “Public Market” shall mean (a) the following organisations to the extent that they are not for profit organisations: (i) Governments including without limitation government ministries and agencies, together with government-funded institutions and programs, such as state-run hospitals and prison services in those countries; (ii) NGOs including without limitation those recognized by the applicable local government ministry; (iii) UN-related organizations working for or in those countries, including but not limited to UNDP and UNICEF; (iv) Not-for-profit organizations including without limitation, Médecins Sans Frontières, Save-the-Children, OXFAM and the International Committee of the Red Cross (ICRC); (v) Funding mechanisms and programs funded by such mechanisms, including without limitation, UNITAID, PEPFAR, USAID, Global Fund, etc.; and agencies based outside of an applicable country to the extent that they are supporting implementation locally in an applicable country, and (b) nominally for profit procurement organisations but only to the extent that such procurements are supporting not-for-profit treatment programmes as described in (a) of this Clause.

[8] See Articles 1.35 and 2.4 Amended Sublicense Agreement.

[9] MPP, ViiV Healthcare, Medicines Patent Pool Extend Licence for Dolutegravir to all Lower Middle-Income Countries (April 25, 2016), available at: http://www.medicinespatentpool.org/viiv-mpp_extend-licence-for-dtg-in-all-lower-mics/.  The amended adult license is available at: http://www.medicinespatentpool.org/wp-content/uploads/Amended-and-Restated-ViiV-MPPF-Adult-Headlicence-dated-22-April-2016-Executed-copy.pdf; the amended adult sub-license is available at: http://www.medicinespatentpool.org/wp-content/uploads/Schedule-1-Form-of-Sublicence-to-Amended-and-Restated-ViiV-MPPF-Adult-….pdf.

[10] MPP, MPP Licences for Dolutegravir (DTG), available at: http://www.medicinespatentpool.org/mpp-licences-on-dolutegravir-dtg-2/.

[11] MPP, Medicines Patent Pool Announces First World Health Organization Prequalification Submissions for Generic Dolutegravir (10 Nov. 2016), available at: http://www.medicinespatentpool.org/the-medicines-patent-pool-announces-first-world-health-organization-prequalification-submissions-for-generic-dolutegravir/. According to the WHO Prequalification Programme, as of May 10, 2017, there are currently three pending applications for dolutegravir (50 mg tablet) and four pending applications for prequalification of DTG APIs. World Health Organization, Summary: FPPs & APIs Invited for Prequalification/Prequalified/Under Assessment, available at: https://extranet.who.int/prequal/content/summary-fpps-apis-invited-prequalificationprequalifiedunder-assessment.

[12] MPP, Q&As on MedsPal, available at: http://www.medicinespatentpool.org/patent-data/explanatory-notes/.

[13] Available at: http://www.medicinespatentpool.org/wp-content/uploads/ViiV-MPPF-Adult-Execution-Version-30-March-2014-clean.pdf. For Sublicence Agreement available at: http://www.medicinespatentpool.org/wp-content/uploads/MPPF-Sublicence-Adult-Execution-Version-20140401.pdf.

[14] Available at: http://www.medicinespatentpool.org/wp-content/uploads/ViiV-MPPF-Paediatric-Execution-Version-31-March-2104-clean.pdf. Form Sublicence Agreement available at: http://www.medicinespatentpool.org/wp-content/uploads/MPPF-Sublicence-Paediatric-Execution-version-20140401.pdf.

[15] The terms in the pediatric licenses are equivalent.

[16] There is only one non-territorial producer at this point, which principally supplies active pharmaceutical ingredients.

[17] For several countries in the Tables below, including Albania, Bosnia and Herzegovina, Macedonia, Montenegro, and Serbia, there is no patent on single dose DTG, but only on the 2011 patent ABC/3TC/DTG. See, MPP, MedsPaL database, available at: http://www.medspal.org.

[18] Brazil technically has not yet granted a patent on DTG single-dose, but it is highly unlikely that any generic would supply Brazil because of market uncertainty and the risk of retroactive infringement compensation.

[19] The Malaysia DTG single dose patent application has been withdrawn, but it is not yet clear whether that application can or will be reinstated.

[20] Brazil technically has not yet granted a patent on DTG single-dose, but it is highly unlikely that any generic would supply Brazil because of market uncertainty and the risk of retroactive infringement compensation.

Source: ip-watch.org

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