Writers Megha Bahree and Matthew Herper write about a scheme that could pay drug companies a small royalty to allow generic companies to reproduce the drugs. Some companies are ready to run with the idea but others are wary. Our snippet focuses on the scheme and the obstacles in the way.
MSF and Unitaid, an international drug-purchasing agency in Geneva, are pushing a simple solution that could allow African patients to get Truvada and a third drug for only $86 a year, according to a Boston University analysis. The concept is to have companies like Merck ( MRK - news - people ), Abbott Laboratories ( ABT - news - people ) and GlaxoSmithkline ( GSK - news - people ) put patents for 19 HIV drugs into a patent pool that could be licensed to select generic-drug makers. The generic companies would manufacture copycats, pay the inventors a small royalty and sell them only in agreedupon developing countries. Competition among the generic companies, who are expert at producing drugs on the cheap, would cause prices to fall sharply, yet the inventors would still get some incremental revenue out of Africa. "The patent holders would get the royalty, and we'd get the drugs," says Goemaere.
It sounds straightforward, but the politics are anything but. Three years after Unitaid broached the idea, it says that so far only Gilead Sciences, Johnson & Johnson ( JNJ - news - people ) and Merck are "actively engaged" in negotiating with Unitaid over the patent pool. Since February Unitaid has been lobbying 9 other drugmakers and 17 generics manufacturers to sit down and discuss the idea. Unitaid met once with Abbott Laboratories, but it took eight months to schedule a second meeting. Abbott says it is open to discussions. GlaxoSmithkline says it has met several times with Unitaid to hear its ideas. Bristol-Myers Squibb ( BMY - news - people ) says the patent pool could remove incentives for innovation. But Lisa Haile, a drug patent lawyer at DLA Piper, says the pool won't hurt earnings. "The good will outweigh the bad."
Getting many different drugs into the pool is essential, because in order to control HIV (and keep resistant strains from erupting) patients must take three medicines at once. The big stumbling block is how many countries to include. AIDS activists and generic-drug makers want to include in the drug discount regime as many countries as possible. But a patent pool that covers China, Brazil or Thailand could be a deal breaker for branded drug makers. The matter is likely to come to a head at a mid-December meeting of Unitaid's board.
Patent pools have long been used by technology companies to cross-license products. James Love, of Knowledge Ecology International, a think tank, realized that the idea could get more AIDS drugs to Africa and convinced Unitaid to push the concept when it formed in 2006.
The patent pool got an unlikely boost last year from Gilead Sciences, the biggest maker of AIDS drugs in the U.S. In 2007 Love filed a complaint with the Federal Trade Commission contending that Gilead was violating antitrust laws by licensing its drugs only to select companies in the developing world. As luck had it, a few months later he wound up sitting across from Gilead chief counsel Gregg Alton at a dinner party held by the charity Oxfam. The two men hit it off and started talking at length about the patent pool idea. "He was not being a jerk," says Love. "I was struck by the fact that he didn't take it personally that I filed an antitrust complaint against his company."
Alton, who is charged with getting Gilead's drugs to the developing world, realized that the pool had advantages for Gilead. It would mean less hassle and expense than negotiating licenses for the developing world with one generics company at a time. In 2008, at an annual meeting of HIV doctors and drugmakers in Mexico City, Alton spoke up in favor of the Unitaid patent pool. His argument was so convincing that representatives from J&J and Merck stood up and expressed general support for the idea.