Another Case of Pharma Weakening the Patent System (and University Technology Transfer)

The LA Times recently published an article, "UCLA’s Efforts to Patent a Costly Patent Cancer Drug in India Hurts the Poor, Critics Say,” concerning Pfizer’s drug, Xtandi.  Xtandi, which is used to treat prostate cancer, was developed (with U.S. government funding) and licensed out by University of California, Los Angeles.  Recently, in a royalty securitization deal, UCLA received more than $500 million in exchange for future royalty rights from Royalty Pharma.  Notably, UCLA is now seeking patent rights for Xtandi in India, which it states it has a contractual obligation to do.  The article states:

“What’s special about this case is the fact that the University of California is going against their own licensing policy by aggressively seeking a patent in India on this drug,” KEI Director James Love said.

That policy, as UCLA summarized in a statement to The Times, is “intended to facilitate all populations having access to medications and other products and services made possible by UCLA innovation.”

But UCLA also noted the “concerns about prescription drug pricing” among the activists and others and said it was willing to explore the problem further.

The school said “we are convening a working group to evaluate our approach to technology licensing in ways that benefit California, the nation and the developing world” while also continuing to give drug companies enough incentive to commercialize its discoveries, just as Medivation did with Xtandi.

In the meantime, the activists contend that a daily dose of Xtandi is selling in India for roughly 40 times a person’s daily income in that nation, which they called “excessive and shamefully unaffordable.”

Notably, the University of California is a signatory to the In the Public Interest: Nine Points to Consider in Licensing University Technology White Paper.  Point 9 of the White Paper states:

Consider including provisions that address unmet needs, such as those of neglected patient populations or geographic areas, giving particular attention to improved therapeutics, diagnostics and agricultural technologies for the developing world

Universities have a social compact with society.  As educational and research institutions, it is our responsibility to generate and transmit knowledge, both to our students and the wider society.  We have a specific and central role in helping to advance knowledge in many fields and to manage the deployment of resulting innovations for the public benefit. In no field is the importance of doing so clearer than it is in medicine.  

Around the world millions of people are suffering and dying from preventable or curable diseases.  The failure to prevent or treat disease has many causes. We have a responsibility to try to alleviate it, including finding a way to share the fruits of what we learn globally, at sustainable and affordable prices, for the benefit of the world’s poor. There is an increased awareness that responsible licensing includes consideration of the needs of people in developing countries and members of other underserved populations.

The details involved in any agreement provisions attempting to address this issue are complex and will require expert planning and careful negotiation.   The application will vary in different contexts.  The principle, however, is simple.  Universities should strive to construct licensing arrangements in ways that ensure that these underprivileged populations have low- or no-cost access to adequate quantities of these medical innovations. 

We recognize that licensing initiatives cannot solve the problem by themselves.  Licensing techniques alone, without significant added funding, can, at most, enhance access to medicines for which there is demand in wealthier countries.   Diseases that afflict only the global poor have long suffered from lack of investment in research and development: the prospects of profit do not exist to draw commercial development, and public funding for diseases suffered by those who live far away from nations that can afford it is difficult to obtain and sustain. Through thoughtful management and licensing of intellectual property, however, drugs, therapies, and agricultural technologies developed at universities can at least help to alleviate suffering from disease or hunger in historically marginalized population groups.

This appears to be another case of a company making a decision based on pricing that will likely undermine confidence in the patent system, particularly undermining technology transfer from universities.  Universities should exercise care in licensing to ensure that they have the final word on enforcement as well as patenting in other countries (see follow-up patenting noted by Professor Lisa Larrimore Ouellette).  Let’s not kill the "golden goose."  Perhaps UCLA can use part of the $500 million for a fund for people who need access to the drug in India.