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EMTRICITABINE (FTC)

In July 2011, the MPP signed a licence agreement with Gilead Sciences for several antiretrovirals. It included a covenant not to sue on products containing emtricitabine (FTC). FTC is recommended by the World Health Organization (WHO) as a component of first and second-line treatment regimens for adults and children. In September 2017, the two parties amended the agreement to allow for an extension of the Territory for FTC to 116 countries that together are home to 89.8% of people living with HIV in low- and middle-income countries.

Key Features
Eligibility: All entities based in China, India and South Africa that have signed the licence with Gilead and MPP on TDF, TAF, COBI and EVG, regardless of whether they have terminated TDF or not.
Geographical scope for sale: The geographical scope is 112 countries, representing 92.2% of people living with HIV in low- and middle-income countries, equivalent to the territory included in the TDF and TAF licences.
Sales outside the licensed territory: The covenant not to sue only applies to the 112 countries included. Sales outside the licensed territory may be possible if not infringing on any granted patents.
Royalties: No royalties on the covenant not to sue (but there may be royalties on other components of any specific combination)
Combinations: The covenant not to sue covers combinations that include FTC, such as TDF/FTC, TAF/FTC and TDF/FTC/EFV
Patent disclosure: The covenant not to sue discloses the list of all pending and granted patents in the 112 licensed countries at the time of signing the licence
Termination (or unbundling) Licensees that have terminated TDF continue to benefit from the covenant not to sue on TDF/FTC, TAF/FTC and TDF/FTC/EFV.
Country List
Afghanistan, Angola, Anguilla, Antigua and Barbuda, Armenia, Aruba, Bahamas, Bangladesh, Barbados, Belarus, Belize, Benin, Bhutan, Bolivia, Botswana, British Virgin Islands, Burkina Faso, Burundi, Cambodia, Cameroon, Cape Verde, Central African Republic, Chad, Comoros, Côte d’Ivoire, Cuba, Democratic Republic of the Congo, Djibouti, Dominica, Dominican Republic, Ecuador, El Salvador, Equatorial Guinea, Eritrea, Ethiopia, Fiji, Gabon, Gambia, Georgia, Ghana, Grenada, Guatemala, Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, India, Indonesia, Jamaica, Kazakhstan, Kenya, Kiribati, Kyrgyzstan, Laos, Lesotho, Liberia, Madagascar, Malawi, Malaysia, Maldives, Mali, Mauritania, Mauritius, Moldova, Mongolia, Montserrat, Mozambique, Myanmar, Namibia, Nauru, Nepal, Nicaragua, Niger, Nigeria, Pakistan, Palau, Papua New Guinea, Republic of the Congo, Rwanda, Saint Kitts and Nevis, Saint Lucia, Saint Vincent & the Grenadines, Samoa, Sao Tome and Principe, Senegal, Seychelles, Sierra Leone, Solomon Islands, Somalia, South Africa, South Sudan, Sri Lanka, Sudan, Suriname, Swaziland, Syrian Arab Republic, Tajikistan, Tanzania, Thailand, Timor-Leste, Togo, Tonga, Trinidad and Tobago, Turkmenistan, Turks and Caicos Islands, Tuvalu, Uganda, Ukraine, Uzbekistan, Vanuatu, Vietnam, Yemen, Zambia, Zimbabwe

Update on progress of MPP sublicensees (Sept 2018)

Q&A

This Q&A is also available as a PDF here.

1. Which products do the licences cover?

The licences cover: tenofovir (TDF), cobicistat (COBI), elvitegravir (EVG), and the Quad, a fixed-dose combination of TDF-COBI-EVG-emtricitabine. There is also a covenant not to enforce emtricitabine (FTC) patents, and the ability to make other fixed-dose combinations involving these compounds.

Tenofovir, cobicistat, and elvitegravir are three of the 19 drugs prioritised as especially critical to public health by the Medicines Patent Pool in cooperation with the World Health Organization HIV/AIDS Department and innovative financing mechanism UNITAID.

2. What is tenofovir? Why is it important?

Tenofovir is a reverse transcriptase inhibitor – an antiretroviral drug that prevents viruses from reproducing by blocking an enzyme that makes it possible for them to do so. It is used in combination with other ARVs in first-line and second-line regimens for HIV as well as for hepatitis B. The TDF licence in the Pool allows for it to be supplied as either an HIV or hepatitis B treatment.

In March 2010 it was also approved for use in children over the age of 12, and is in clinical trials for younger children. It has been recommended by the World Health Organization to replace stavudine, a widely-used HIV treatment in the developing world that is less preferred due to adverse side effects.

3. What is cobicistat? Why is it important?

Tenofovir is a reverse transcriptase inhibitor – an antiretroviral drug that prevents viruses from reproducing by blocking an enzyme that makes it possible for them to do so. It is used in combination with other ARVs in first-line and second-line regimens for HIV as well as for hepatitis B. The TDF licence in the Pool allows for it to be supplied as either an HIV or hepatitis B treatment.

In March 2010 it was also approved for use in children over the age of 12, and is in clinical trials for younger children. It has been recommended by the World Health Organization to replace stavudine, a widely-used HIV treatment in the developing world that is less preferred due to adverse side effects.

4. What is elvitegravir? Why is it important?

Elvitegravir is a medical product in the development stage. It is an integrase inhibitor – antiretroviral that works by preventing a step in the AIDS virus’ replication cycle. EVG is under exclusive licence to Gilead from Japan Tobacco.

5. What is emtricitabine? Why is it important?

Emtricitabine is an antiretroviral drug that works by blocking an enzyme needed in viral replication. It is used in first and second line treatment for adults.

6. Why are these licences significant?

These licences are a proof of concept that the Pool can negotiate constructive, public-health oriented licences with pharmaceutical companies that represent an improvement on the status quo. These licences have improved on existing voluntary agreements with the inclusion of more countries and new molecules.

The Pool is now ready to grant licences to generic companies.

7. What is the public health benefit of these licences?

These licences are a critical step forward in changing norms on voluntary licensing – turning access initiatives in the direction of greater transparency and greater public health focus.

These licences improve on existing agreements in several ways:

  • Transparency: The terms and conditions of most privately negotiated licences are not known. In a move unprecedented in the pharmaceutical field, the Pool has published the entire text of the voluntary licences on its website. This allows for generic companies and product development partnerships to understand exactly what rights and obligations are contained in Pool licences. It also allows key stakeholders in the public health community to provide feedback on the licences and suggestions for improvement to ensure that subsequent licences negotiated by the Pool represent an improvement on what has come before.
  • Public health focus: The Pool has negotiated the licence so that critical flexibilities in intellectual property law are not compromised. For instance, the agreement expressly ensures that licensees are able to supply to countries outside the licensed territory where compulsory licences are issued. (See further detail below.)
  • Data exclusivity waiver: Any applicable data or regulatory exclusivity rights are explicitly waived, removing a key non-patent barrier to access to medicines.
  • Pipeline products: the licensing of products still in clinical development by a commercial, research-based company to generic companies for use in resource-poor settings is rare. These licences on products still in development will help speed the arrival of newer, potentially more effective drugs for people who need them most.
  • Special provisions for paediatric formulations: Royalties will be waived for any new paediatric formulations, and there are provisions for medicines for children under 12 to be made available outside the licence territory.
  • Expansion of geographical scope: the number of countries in the licenced territory is greater than in any previous Gilead licence or any other company’s voluntary licence.
  • Use of TDF for hepatitis B: previous voluntary licences have only allowed the use of tenofovir in the treatment and prevention of HIV. The Pool’s licences also allow for its use in the treatment of Hepatitis B, which is a significant health problem in developing countries that the World Health Organization estimates kills 600,000 people a year.
  • Termination clauses: previous TDF licences did not allow for the licensee to terminate without cause. The Pool licences allow for licensees to terminate for any reason and on a drug-by-drug basis. That is, licensees can terminate the licence for one medicine, while retaining the licence to produce the others (known as “unbundling” – see further detail below).

The Pool is working to deliver even greater public health benefits – such as the development of new fixed-dose combinations – by concluding licences for additional medicines.

8. How will these licences impact medicines prices?

The Pool licences will facilitate increased competition in the markets for these medicines. Competition has proven to be the most effective, reliable and predictable way to decrease HIV medicines prices. For example, generic competition in the tenofovir market contributed to an 80 per cent decrease in its price over the past few years. The Pool licences are non-exclusive (within India), which means that any company that meets the eligibility criteria may receive a licence from the Pool. As HIV treatment scale-up continues and demand for HIV medicines continues to grow, it will be critical to ensure sufficient production capacity and robust competition in markets, while taking into account the need for economies of scale.

For products already on the market (tenofovir, emtricitabine, and some FDCs containing these medicines), the Pool licences will clear the path for additional competition and production capacity.

For the pipeline products (cobicistat, elvitegravir, the Quad and other FDCs containing these medicines), the Pool licences will allow multiple licensees to prepare to market these new medicines as soon as Gilead receives regulatory approval, thereby facilitating early generic competition for these products.

9. Do these licences prevent the use of flexibilities in the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) or the Doha Declaration on TRIPS and Public Health?

No. The ability of licensees to supply medicines to countries that have used TRIPS flexibilities and/or to countries where the government of India has issued a compulsory licence for export is expressly guarded in sections 7.3(c) and 10.3(d).

10. Are there any provisions such as bundling or “no patent challenge” clauses in these licences?

No. Bundling is a practice in which the licences on several products are tied together so that, for example, a company cannot take a licence to use cobisistat without also taking the licence on tenofovir. A “no challenge” clause can prevent a licensee from challenging the licensed patents. Such provisions can have a negative effect on competition and affordability. The Pool has therefore negotiated so that no such provisions appear. A licensee can terminate the licence on a drug-by-drug basis, at any time. The licence also explicitly acknowledges that where a patent is no longer valid in India and in the country of sale, the licensee no longer has any obligation to pay royalties.

11. Do the licences include know-how transfer?

Yes, the licences include a “one-time technology transfer of know-how” to the licensee. The know-how “shall be sufficient to enable Licensee to manufacture TDF and TDF Product, EVG and COBI, EVG Product, COBI Product and Quad, at commercial-scale quantities.” This is a significant improvement over existing licences. The Pool did not want the transfer of know-how to result in onerous obligations, and this is reflected in the text of the agreement.

The know-how transfer in the licences does not come with any additional royalty obligations. A licensee may terminate the licensing agreement for any reason with a 30-day notice.

12. Are there any provisions related to data exclusivity?

The licences require Gilead to waive any data exclusivity rights that might apply, and prevents the licensee from applying for any such exclusivity.

13. What is the geographical scope of the licences? Is this an improvement on prior licences?

The licences allow for the supply of generic tenofovir (TDF) and emtricitabine in 112 countries, for cobicistat (COBI) in 103 countries, and for elvitegravir (EVG) and the Quad in 100 countries. The list of low- and middle-income countries included and excluded for each medicine is annexed to this document.

This is the first time COBI, EVG and the Quad have been licensed. Previous TDF voluntary licences from Gilead covered 95 countries, representing 93,200 fewer people living with HIV than the Patent Pool licences.

While the number of countries has increased in the Patent Pool licence, there are still developing countries with high HIV burdens that the Pool was unable to negotiate into the licences.

The Pool has been mandated by UNITAID to seek inclusion of all developing countries, and considers the geographical scope to be a key area where these licences could be improved.

14. Why did the Pool agree to a licence that does not include certain middle-income countries?

The Pool acknowledges that the geographical scope of the licence is a critical area where it needs to be improved. The context the Pool operates in is important in understanding the Pool’s decision to agree to a licence with this acknowledged shortcoming.

The Pool is a voluntary mechanism that negotiates with the aim to create the largest possible benefits for the largest number of people. But it is not in a position to dictate terms and conditions to licensors. In its exchanges with patent holders, the Pool regularly makes the case for removing restrictions from licences, for including all low- and middle-income countries, for enhanced transparency and for ensuring that public health considerations guide the formulation of terms and conditions of the licences.

The Pool has been able to make serious improvements, including a partial expansion of geographical scope (covering between 82.7 and 87.6% of people living with HIV in low and middle income countries; see below for breakdown by drug and income level), and other public health benefits discussed in question 7.

15. What about API restrictions, and licensee restrictions?

Licensees must purchase API only from other licensees or directly from Gilead or Gilead distributers. Also, the licence restricts API manufacturers and licensees to Indian manufacturers. These restrictions are not ideal; however, it should be noted that India manufactures a vast majority of ARVs (~90 %) currently used in HIV treatment programmes in developing countries.

The API sourcing and licensee restrictions are another area where the Pool believes the licences could be improved.

16. What are other areas where the licence agreement could have been improved?

In addition to limits on the geographical scope of the licences, and restrictions on API sourcing and eligible licensees, there are a few other areas in which the Pool sought but did not get improvements.

These are:

  • New combination products containing EVG aside from the Quad must be approved in writing by Gilead. EVG is exclusively licensed to Gilead by Japan Tobacco.
  • The EVG geographic scope is smaller than the COBI geographic scope by three countries (Aruba, Dominican Republic, and Montserrat).
  • There are nine countries included in the TDF geographic scope, but excluded from both the COBI and the EVG scope: Botswana, Ecuador, El Salvador, Indonesia, Kazakhstan, Namibia, Sri Lanka, Thailand, and Turkmenistan. Some of these have high HIV burdens. Although the Pool is not privy to the details of the arrangement, the Pool understands that Gilead has entered into “semi-exclusive” voluntary licences covering these countries with a number of Gilead’s “Preferred Partners.”

The Pool views the Gilead licence as a first step – a floor, not a ceiling – and will continue to work with Gilead and others to improve this and future licences, per the Pool’s mandate.

17. While the licences allow for the use of TRIPS flexibilities, how is that useful when it is politically difficult for countries to make use of these flexibilities?

The Pool supports the use of TRIPS flexibilities by countries, and is mandated under its Statutes to ensure that the licence agreements that it negotiates are consistent with the use of such flexibilities. As such, the licence agreement expressly allows for a licensee to supply a country outside the territory in the event of a compulsory licence.

The Medicines Patent Pool must be viewed in the context of the range of different policy options available to governments and other actors to promote access to HIV medicines. On its own, the Pool will not be able to remove all barriers to access. It can make a key difference in some areas and ensure that its licences do not hinder the implementation of other important access mechanisms.

18. The tenofovir licence allows for licensees to market TDF for hepatitis B as well as HIV. Does this constitute an endorsement of patents on new uses? What about new use patents that might come up for EVG and COBI?

The fact that the licence does not restrict the sale of TDF to only HIV is positive for access to medicines and public health. The field of use that is defined under a patent licence agreement is a completely separate issue from that of new use patents.

If a patent licence for a compound that has known therapeutic benefit for both HIV and HBV limited the field of use only to HIV, that would mean that it would be a contractual violation for a generic company to market that medicine for the treatment for HBV. This would mean that generic companies would be prohibited from supplying the same drug to the millions of people who are living with HBV, and also reduce the scope for greater economies of scale that is created by a larger potential market for that drug.

There are no patents for new uses covered under the licence agreement for any of the products, including EVG and COBI. Expanding the field of use in a licence agreement does not in any way validate patents on new uses, which many jurisdictions do not allow.

19. Do these licences authorise production of other FDC’s such as Atripla (tenofovir, emtricitabine, efavirenz) or the in-development FDC containing tenofovir, emtricitabine and rilpivirine?

Only in situations where there are no patent barriers to the use, respectively, of efavirenz or rilpivirine.

Gilead controls the patents on tenofovir and emtricitabine, but another company – Merck – holds the patent on efavirenz, the third component of Atripla. In order to produce fixed-dose combinations, generic manufacturers need to have the legal right to produce all the components in the combination. Merck is not yet in negotiations with the Medicines Patent Pool.

Similarly, other fixed-dose combinations that include products from more than one patent-holder may require additional licences. The fixed dose combination comprising tenofovir, emtricitabine and rilpivirine that is currently under development would require a licence on rilpivirine (where rilpivirine patents exist). Johnson & Johnson holds the patent on rilpivirine, and is not yet in negotiations with the Medicines Patent Pool.

20. Does the administrative fee paid to the Medicines Patent Pool on sales of medicines under this licence constitute a conflict of interest?

Update 25 July 2012: The administrative fee due to the Pool has been waived in a new amendment [pdf] to the Gilead licences. The Pool has not, and now will not, receive any royalties as a result of this agreement.

The Pool does not believe that the proportion of royalties payable to it under the Gilead licences constitutes a conflict of interest. The royalties owed to the Pool are 5% of the 3-5% royalty that Gilead receives – in other words, the commission is 0.15 – 0.25 % of the generic price. They do not increase the royalties that generics must pay to Gilead but instead are a portion of them.

Based on the market size and growth projections, the Pool has estimated the total revenue to the Pool from this royalty stream as ranging from $1,500 to $30,000 in 2011-2012, an amount that comprises less than 1% of the Pool’s annual operating costs. The Pool’s Statutes allow for self-sustaining revenue streams but mandate that at all times the majority of the Pool’s funding must come from public and/or non-profit sources.

Update 25 July 2012: Following civil society feedback and consultations with UNITAID and the Pool board, the Pool decided to waive any royalties, deciding that the mere appearance of conflict (even if only in appearance) was problematic. The amendment to the Gilead agreement went into effect 25 July 2012, before any royalties had been paid the Pool. It can be read here [pdf].

21. What is the decision-making process for the Patent Pool to accept this licence?

The Patent Pool Governance Board is in the process of convening an Expert Advisory Group (EAG) to provide advice as to whether the negotiated licences represent a significant improvement over the status quo. However, because the EAG had not yet been formally convened, an ad hoc group of experts were consulted for these licences. The ad hoc group provided feedback and guidance on on-going negotiations. The ad hoc group’s input and suggestions were then shared with the Pool’s Governing Board for final decision.

The Pool also benefited greatly from pro bono legal services provided by Wilson Sonsini Goodrich & Rosati, Rajeshwari & Associates, Dechert LLP, and Bird & Bird.

22. Where were members of civil society and people living with HIV in the consultation process leading up to the licence?

Civil society organisations have been at the centre of the creation of the Medicines Patent Pool. The input of civil society groups was essential in the formation of the Medicines Patent Pool and in understanding the types of terms and conditions licences must have to be of greatest value in increasing access to medicines. The Medicines Patent Pool participates in meetings with the UNITAID NGO and Communities board delegations and frequently interacts with other civil society groups. We have met with stakeholders in various settings around the world during the negotiation process leading up to the signing of these licences. Members of the communities and civil society groups took part in the ad hoc advisory group that reviewed the agreement and provided advice to the Medicines Patent Pool board before it was signed.

Several civil society organisations and networks of people living with HIV have asked the Medicines Patent Pool and UNITAID for wider consultation. We agree that the work of the Pool will benefit from a greater involvement of organisations of people living with HIV and their representatives and we will meet with such organisations to discuss ways how this can best be done.

23. When will the licence agreement be made public?

The licence text is available in full from the Patent Pool website here.

ANNEX:

List of countries newly included in the Pool/Gilead licences for TDF and FTC (as compared to old TDF):
1. Anguilla 10. Montserrat
2. Armenia 11. Nauru
3. Aruba 12. Palau
4. British Virgin Islands 13. South Sudan
5. Ecuador 14. Sri Lanka
6. El Salvador 15. Tonga
7. Fiji 16. Turkmenistan
8. Georgia 17. Turks & Caicos
9. Kazakhstan
List of countries excluded from the COBI licence (as compared to new Patent Pool TDF licence):
1. Botswana 6. Namibia
2. Ecuador 7. Sri Lanka
3. El Salvador 8. Thailand
4. Indonesia 9. Turkmenistan
5. Kazakhstan
List of countries excluded from the EVG and Quad licences (as compared to new Patent Pool COBI licence):
1. Aruba 3. Montserrat
2. Dominican Republic
List of countries included in previous TDF voluntary licences:
1. Afghanistan 49. Madagascar
2. Angola 50. Malawi
3. Antigua and Barbuda 51. Maldives
4. Bahamas 52. Mali
5. Bangladesh 53. Mauritania
6. Barbados 54. Mauritius
7. Belize 55. Moldova, Rep. of
8. Benin 56. Mongolia
9. Bhutan 57. Mozambique
10. Bolivia 58. Myanmar
11. Botswana 59. Namibia
12. Burkina Faso 60. Nepal
13. Burundi 61. Nicaragua
14. Cambodia 62. Niger
15. Cameroon 63. Nigeria
16. Cape Verde 64. Pakistan
17. Central African Republic 65. Papua New Guinea
18. Chad 66. Rwanda
19. Comoros 67. Saint Kitts and Nevis
20. Congo 68. Saint Lucia
21. Congo, Dem. Rep. of the 69. Saint Vincent & the Grenadines
22. Cote d’Ivoire 70. Samoa
23. Cuba 71. Sao Tome and Principe
24. Djibouti 72. Senegal
25. Dominica 73. Seychelles
26. Dominican Republic 74. SierraLeone
27. Equatorial Guinea 75. SolomonIslands
28. Eritrea 76. Somalia
29. Ethiopia 77. South Africa
30. Gabon 78. Sudan
31. Gambia 79. Surinam
32. Ghana 80. Swaziland
33. Grenada 81. Syria
34. Guatemala 82. Tajikistan
35. Guinea 83. Tanzania, U. Rep. of
36. Guinea-Bissau 84. Thailand
37. Guyana 85. Timor-Leste
38. Haiti 86. Togo
39. Honduras 87. Trinidad and Tobago
40. India 88. Tuvalu
41. Indonesia 89. Uganda
42. Jamaica 90. Uzbekistan
43. Kenya 91. Vanuatu
44. Kiribati 92. Vietnam
45. Kyrgyzstan 93. Yemen
46. Lao, People’s Dem. Rep. 94. Zambia
47. Lesotho 95. Zimbabwe
48. Liberia
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