International drug purchase facility UNITAID is to start work on establishing a drug “patent pool,” aimed at making second-generation drugs more affordable by lowering the barriers to market entry for generics while maintaining royalties to patent holders.

Enabling holders to make their patents available for production or further work by others, on payment of royalties, will help speed the availability of generics because development can start well before the 20-year patent term runs out, says UNITAID, which agreed the initiative at its Board meeting in Geneva this month. The initiative will also help increase the potential market size because companies producing drugs under license from the pool can export them to any country designated by the pool’s licenses, it adds
The agency - which was set up in 2006 by France, Brazil, Chile, Norway and the UK to increase access to HIV/AIDS, malaria and tuberculosis drug treatments, financed by the tax on airline tickets - points out that patent pools were relatively common in the early part of the 20th century and, more recently, have been used by digital communication technologies (MPEG, MP3, Dolby and DVD) as ways to facilitate innovation while maintaining industry integrity. The initial focus of the medicines pool could be on paediatric and new combination antiretrovirals (ARVs), although it would not be restricted to this area, it says.

International aid agency Medecins Sans Frontières (MSF) says the initiative could potentially have a big impact, both for access and innovation. “Whether this works or not now depends on the willingness of patent holders to share, in exchange for royalties, the relevant patent rights in the pool,” said Ellen ‘t Hoen, director of policy at MSF’s Access Campaign.

“Patent pools also open up the possibility of developing more fixed-dose combinations (FDC), which combine several drugs into one pill,” she added. “Patents on the individual components of a fixed-dose combination can stand in the way of the development and production of an FDC. A patent pool gets round that by offering producers a one-stop-shop for licenses from the different intellectual property owners. Generic companies obtain licenses against the payment of royalties that will enable them to put the different components of a fixed-dose combination together. The same is true for the development of more child-friendly medicines.”

“We need to find ways to get new drug prices down,” added Selina Lo, medical coordinator at MSF’s Access Campaign. “Today, we pay at best between US$613 and $1,022 for the newer World Health Organization-recommended regimen for first-line AIDS treatment. This is a seven to twelve-fold increase compared to older first-line treatments which are now available for $87 for one patient’s yearly treatment. As we’ve seen with the older antiretrovirals to treat AIDS, increased competition is the best way to do that – a patent pool can foster this competition.”

Supporters also believe that the initiative presents a constructive alternative to the worsening problem of patent disputes. “Instead of litigation and confrontation, a voluntary pool offers an innovative way to help meet the Millennium Development Goal to get more people into treatment. What is needed next is a sound management team for the pool, and a strong civil society engagement with the patent owners, to ensure that the pool obtain licenses for second generation AIDS drugs,” says Michelle Childs of non-profit group Knowledge Economy International (KEI).

UNITAID will now set up a task force, whose recommendations on the structure and implementation of the patent pool will be discussed during the next UNITAID Executive Board meeting in November. A final decision will then be taken and, if approved, the steps towards making the pool operational can be started in early 2009, it says.