The Role of UniversitiesThe Role of Universities

Amit KheraAmit KheraMS-1MS-1

University of Pennsylvania School of MedicineUniversity of Pennsylvania School of Medicine

Adapted from presentation by Hillary Freudenthal & Sam Chaifetz

The “Access Gap”The “Access Gap”

WHO 2004

Avowed mission towards advancing Avowed mission towards advancing the public goodthe public good

Upstream in drug R&DUpstream in drug R&D Access to researchers and Access to researchers and

administratorsadministrators

Why focus our attention and energies on universities’ tech transfer policies?

Penn CTT Mission Penn CTT Mission statementstatement

““Commercialize Penn research Commercialize Penn research discovery for the public good”discovery for the public good”

What role do universities What role do universities play? play?

Increasingly important part of U.S. R&DIncreasingly important part of U.S. R&D U.S. universities are responsible for more than 50% of U.S. universities are responsible for more than 50% of

the country’s basic research sciencethe country’s basic research science

Growth in patenting and commercialization:Growth in patenting and commercialization: 1970 to 2001, ten-fold increase in number of U.S. 1970 to 2001, ten-fold increase in number of U.S.

patents issued annually to U.S. academic institutionspatents issued annually to U.S. academic institutions AUTM data show significant increase in licensing AUTM data show significant increase in licensing

activityactivity

““Major players in the biopharmaceutical arena” Major players in the biopharmaceutical arena” A 2000 report suggested that 15 of the 21 drugs with A 2000 report suggested that 15 of the 21 drugs with

the most therapeutic impact were derived from the most therapeutic impact were derived from federally funded projects at academic centersfederally funded projects at academic centers

Innovations at various Innovations at various universities…universities…

HIV/AIDSHIV/AIDS Yale: d4t (Zerit)Yale: d4t (Zerit) U Minn: abacavir (Ziagen)U Minn: abacavir (Ziagen) Emory: 3TC (Epivir), emtricitabine (Emtriva)Emory: 3TC (Epivir), emtricitabine (Emtriva) Duke: t20 (Fuzeon)Duke: t20 (Fuzeon)

GlaucomaGlaucoma Columbia: latanoprost (Xalatan)Columbia: latanoprost (Xalatan)

HepatitisHepatitis U of Washington: Hep B VaccineU of Washington: Hep B Vaccine

CancerCancer Michigan State: Cysplatin and CarboplatinMichigan State: Cysplatin and Carboplatin

Others with key university input: Epogen, Others with key university input: Epogen, Erbitux, Prilosec, streptomycin, penicillin, insulinErbitux, Prilosec, streptomycin, penicillin, insulin

How can universities ensure that their innovations reach LMI populations?

First: How does university tech transfer work?

Then: How should it work? How can it be changed?

Who funds university research?

Over the last decade, nearly 60% of academic R&D was funded by the federal government, while

industry supplied 6%

Who funds university research?

University of Pennsylvania, 2004

What do universities do with this What do universities do with this research?research?

Historical PerspectiveHistorical PerspectiveFor much of the 20For much of the 20thth century, universities rarely century, universities rarely

patented their research outputpatented their research output

Rai & Eisenberg 2003

Increase in Patenting and Increase in Patenting and Commercialization:Commercialization:

Bayh-Dole Act (1980) Bayh-Dole Act (1980) Goal: Goal:

Increase technology transfer and utilization of federally-funded Increase technology transfer and utilization of federally-funded researchresearch

What did it do?What did it do? Universities given right to retain the property rights to Universities given right to retain the property rights to

inventions made under federal funding; exclusive inventions made under federal funding; exclusive licensing permittedlicensing permitted

Growth in Patenting Growth in Patenting (faster than other patenting in the United States)(faster than other patenting in the United States)

Surge in Licensing ActivitySurge in Licensing ActivityIncrease in Royalties from LicensingIncrease in Royalties from Licensing

The Birth of a DrugThe Birth of a Drug

The Realities of University Tech Transfer Licenses

Despite increasing commercialization, Despite increasing commercialization, TTOs – overall – aren’t making a lot of TTOs – overall – aren’t making a lot of

money!money!

““The dirty secret is that for many The dirty secret is that for many universities—perhaps most—they are universities—perhaps most—they are not breaking even, much less making not breaking even, much less making money on the proposition.”money on the proposition.”

Johns Hopkins President Johns Hopkins President William BrodyWilliam Brody

The Realities of University Tech Transfer Licenses

Many university owned patents don’t get licensed; most licensed patents don’t result in Many university owned patents don’t get licensed; most licensed patents don’t result in

big money for universities. big money for universities.

AUTM Annual Survey: <1% of 21K licenses generated >$1M (2000)AUTM Annual Survey: <1% of 21K licenses generated >$1M (2000)

On average, revenues from licensing patents equal up to 4% of a university’s On average, revenues from licensing patents equal up to 4% of a university’s research funds … even smaller % of overall university budget research funds … even smaller % of overall university budget

Small number of schools, making money from limited number of very successful patentsSmall number of schools, making money from limited number of very successful patents

Universities prize tech transfer dealsUniversities prize tech transfer deals Discretionary fundsDiscretionary funds Faculty IncentivesFaculty Incentives TTO BiasTTO Bias

Respond primarily to financial incentivesRespond primarily to financial incentives Despite economic reality and mission Despite economic reality and mission

statementstatement

Case StudyCase StudyYale: the d4T storyYale: the d4T story

Rather typical factsRather typical facts When/where of patenting When/where of patenting University charter and the public goodUniversity charter and the public good Economics of tech transferEconomics of tech transfer University interestsUniversity interests

Role of (student) activism and Role of (student) activism and press attentionpress attention

Significant impact on pricing / Significant impact on pricing / accessaccess

No impact on economic incentives No impact on economic incentives for pharma/universityfor pharma/university

The timelineThe timeline

19661966: compound synthesized under a National Cancer : compound synthesized under a National Cancer Institute grant at the Michigan Cancer CenterInstitute grant at the Michigan Cancer Center

1984:1984: Yale scientists prove that d4T is potent against Yale scientists prove that d4T is potent against HIV in cell culturesHIV in cell cultures

1986:1986: Yale files for a “use patent” Yale files for a “use patent” 1988:1988: Yale issues BMS exclusive worldwide license Yale issues BMS exclusive worldwide license

(and files for patents in South Africa, Egypt, etc.)(and files for patents in South Africa, Egypt, etc.) 1994:1994: FDA approval FDA approval 1994 - 97: 1994 - 97: BMS takes out process patentsBMS takes out process patents

BMS made $443 million on sales of d4T in 2002; $515 million in 2001, $578 million in 2000.

But almost none came from developing countries.

In 1999, Yale earned $46.12 million in royalties; about $40 million of this was from d4t

But almost none came from developing countries.

The Money Trail

MSF’s request; Yale’s MSF’s request; Yale’s responseresponse

Feb 14, 2001:Feb 14, 2001: MSF request to Yale: MSF request to Yale: Asking Yale if they “Asking Yale if they “would consider the would consider the

importation of generic versions of stavudine for importation of generic versions of stavudine for use in providing treatment free of charge to use in providing treatment free of charge to people with HIV/AIDS unable to afford people with HIV/AIDS unable to afford treatment an infringement of your intellectual treatment an infringement of your intellectual property rightsproperty rights,” ,”

And if so, if Yale would “And if so, if Yale would “issue a voluntary issue a voluntary license to allow the importation and use of license to allow the importation and use of generic stavudine in South Africageneric stavudine in South Africa.”.”

March 1, 2001:March 1, 2001: Yale replies: Yale replies: Yale denies the request on legal grounds, Yale denies the request on legal grounds,

indicating that they have granted an exclusive indicating that they have granted an exclusive license to Bristol-Myers Squibb (BMS)license to Bristol-Myers Squibb (BMS)

MSF’s ReplyMSF’s Reply March 9, 2001: MSF responds:March 9, 2001: MSF responds:

MSF suggests to Yale that their own policy MSF suggests to Yale that their own policy states that a key objective is “states that a key objective is “the benefit of the benefit of society in general”society in general”

MSF points out that d4T is MSF points out that d4T is not reaching not reaching those who need it in South Africathose who need it in South Africa, and , and suggests that Yale has the ultimate power suggests that Yale has the ultimate power over their patent, and could breach their over their patent, and could breach their contract with BMS if need be.contract with BMS if need be.

March 11, 2001: NYT story “Yale Pressed March 11, 2001: NYT story “Yale Pressed to Help Cut Drug Costs in Africa”to Help Cut Drug Costs in Africa”

March 14, 2001: Concessions!March 14, 2001: Concessions!

““EMERGENCY PATENT RELIEF” EMERGENCY PATENT RELIEF”

““The Company will The Company will ensure that its patents doensure that its patents do not not prevent inexpensive HIV/AIDS therapy in prevent inexpensive HIV/AIDS therapy in AfricaAfrica. The patent for Zerit, rights to which are . The patent for Zerit, rights to which are owned by Yale University and Bristol-Myersowned by Yale University and Bristol-Myers Squibb, will be made available at no cost to treat Squibb, will be made available at no cost to treat AIDS in South Africa under an agreement the AIDS in South Africa under an agreement the Company has recently concluded withCompany has recently concluded with Yale.”Yale.”

In June 2001, “agreement not to sue” signed with In June 2001, “agreement not to sue” signed with Aspen Pharmacare. Aspen Pharmacare. 

ImplicationsImplications

For South AfricaFor South Africa Rapid, thirty-fold reduction in the price of d4t Rapid, thirty-fold reduction in the price of d4t

in South Africa (from more than $1600 to $55 in South Africa (from more than $1600 to $55 per patient per year) per patient per year)

August 2003, Aspen began selling generic d4t August 2003, Aspen began selling generic d4t in South Africa for up to 40% less than the in South Africa for up to 40% less than the reduced BMS pricereduced BMS price

The national ARV program being rolled out in The national ARV program being rolled out in South Africa will rely upon generic versions South Africa will rely upon generic versions of d4tof d4t

For YaleFor Yale No loss of income associatedNo loss of income associated Subsequent major Pfizer investmentSubsequent major Pfizer investment

Is d4t an anomaly?Is d4t an anomaly?

Gilead pays Emory Gilead pays Emory $525 Million$525 Million for for royalty interests for emtricitabineroyalty interests for emtricitabine

July 2005

Should access provisions have been included?

Drug Development Drug Development PipelinePipeline

O’Driscoll 2004

d4T Advocacy

UAEM

Lessons LearnedLessons Learned

Proactive solution is preferableProactive solution is preferable Activism does not always workActivism does not always work

Technology Transfer Offices Technology Transfer Offices responds to financial pressuresresponds to financial pressures

Administrative simplicity requiredAdministrative simplicity required Collective ActionCollective Action