With patent policy, a balance to strike

“It is, in general, undesirable and contrary to the best interests of medicine and the public to patent any discovery or invention applicable in the fields of public health or medicine.”

–Yale Patent Policy, 1948

When universities and research institutions first started to consider patenting drug inventions, they may have considered how patents could limit access to drugs through the monopoly prices that exclusive licenses create. But few likely anticipated the current situation now, where millions die daily of AIDS, and pharmaceutical giants producing AIDS drugs are charging prices often higher than the entire weekly incomes of those who need the drugs most.

The step taken last week by Yale and Bristol-Myers Squibb Co. to relax the patent for the Yale-invented AIDS drug d4T could lead to greater access to drugs for those who need them.

But now, students, scientists and university administrators are beginning to reconsider the patent policy.

“In terms of a general review — whether there are lessons and policy indications — there’s certainly something I’d like [the Committee on Cooperative Research, Patents, and Licensing] to do,” Provost Alison Richard said.

While Yale and Bristol-Myers both decided to relax the patent for d4T in South Africa, the University and its drug licensees may not always agree on solutions to public health problems. Should Yale amend its patent policy and its licensing practices to ensure itself power over its drugs in times of a health emergency?

In the case of d4T, groups from other continents will undoubtedly bang on Yale’s door soon to request that d4T’s patent rights be relaxed in their country. Some students and faculty are discussing what will happen if another country needs d4T and Yale and Bristol-Myers disagree about relaxing the patent.

D4T, patents and the future

Since patents are a relatively new concept in many developing countries, biotechnology a relatively new industry, and AIDS a disease in a class of its own, the issue of how to make AIDS drugs available today in epidemic-stricken developing countries is one with few precedents.

With its decision last week, Bristol-Myers gained a substantial boost to its reputation without suffering a substantial economic loss. Because its prices are already low in South Africa, the revenue Bristol-Myers gains from the sale of Zerit, the trademark under which the company produces d4T, composes an almost negligible percentage of its total profit from Zerit.

But Bristol-Myers’ conduct in South Africa has brought negative publicity to the company. Thousands marched in Pretoria, South Africa, last week over a lawsuit in which Bristol-Myers and other pharmaceutical companies are suing the South African government over a piece of legislation looking to allow companies to produce generic versions of AIDS drugs.

But despite Bristol-Myers’ provisions of drugs, when countries in Eastern Europe, Latin America or Southeast Asia begin to request patent relaxation, they may not receive the support South Africa has from Bristol-Myers.

President Richard Levin has said the University is open to relaxing the d4T patents for most countries where AIDS has become a health emergency, but Bristol-Myers has only agreed to relax the patent in Africa.

Its current policy regarding patent relaxation is to treat requests on a case-by-case basis, rather than take a blanket stance for all requests that it will receive.

Yale’s patenting policy

Currently, Yale does not include provisions in its licensing agreements that would allow it to change or terminate the contract if it thinks its licensee is charging too high of prices during a health emergency.

There are a number of situations in which the University can terminate its contract if it believes its licensee is not effectively developing or marketing its product. Most significantly, Yale can terminate its contract if its licensee is not putting enough effort into bringing the discovery to the market quickly enough. It can also terminate its contract for other routine reasons, such as if its licensee doesn’t pay royalties.

The Yale committee most directly involved with patents policy is the Committee on Cooperative Research, Patents and Licensing, which reports to the provost. Any amendment to the University’s patent policy must first be discussed and approved by that committee before it can head to the Provost’s Office, then to the Joint Boards of Permanent Officers of the University for faculty approval and finally to the Yale Corporation.

But Ian Shapiro, the chair of the Committee on Cooperative Research, Patents and Licensing, does not foresee such a policy change in the near future.

“I think there would be quite a lot of reluctance to tie the hands of the folks who would be making the licenses with particular corporations,” Shapiro said.

Shapiro and Jon Soderstrom, director of Yale’s Office of Cooperative Research, which commercializes Yale’s inventions, said introducing a provision that would give the University an additional right to amend or terminate a licensing agreement for health emergencies would make the agreement less attractive to pharmaceutical companies.

“We’re most concerned that these drugs won’t get onto the market in the first place,” Soderstrom said.

Soderstrom said such a clause would decrease the likelihood that a pharmaceutical company would be willing to invest in the development of the drug to move it through Food and Drug Administration testing.

Furthermore, it would decrease the economic value of the contract, and influence the amount of royalties the University would be able to receive from the discovery, Shapiro and Soderstrom said.

But James Love, the Director of the Ralph Nader-supported Consumer Project in Technology, said Yale should also consider the ethical value of such a clause as well as its economic value.

“All these universities do the same thing, they think of themselves as businesses,” Love said.

As a last resort, the University could breach its contract with Bristol-Myers Squibb, issuing a voluntary license to a company looking to produce generic versions of d4T.

But General Counsel Dorothy Robinson said this would hurt Yale’s credibility as a licensor, without necessarily achieving its intended result, because a small company looking to produce generic copies would not want to risk a lawsuit.

“It probably would not achieve any desired result. [Companies producing generic copies] could find themselves sued under those circumstances,” Robinson said. “Yale honors its agreement. If we didn’t, how would we expect companies to do business with us?”

William Prusoff, the inventor of the AIDS drug d4T.
elise chang
William Prusoff, the inventor of the AIDS drug d4T.

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