Banking on flawed drug voluntary licences

In December, there was a sense of triumph in Geneva when it was announced that Hetero Drugs of Hyderabad had received the green light from the US Food and Drug Administration (FDA) for its generic version of nilotinib, a patented medicine of Swiss pharma giant Novartis that is used to treat chronic myeloid leukaemia. Hailing the FDA approval as “a landmark achievement” was the Medicines Patent Pool (MPP), a UN-backed public health organisation that is tasked with increasing access to life-saving medicines in low- and middle-income countries (LMICs). It was MPP that had given Hetero and three other selected drug companies a sub-licence to produce generic nilotinib through its voluntary licensing and patent pooling system. The irony is that nilotinib had ceased to be a patented drug 18 months earlier. So, what was the celebration about?

Hetero was first off the blocks to get approval from the US drug regulator, and MPP was chuffed because it is the first time the agency got into oncology treatment. The UN-supported agency’s initial mandate was to provide low-cost drugs to treat infectious diseases like HIV, hepatitis C and tuberculosis, but it had decided to expand its operations to non-communicable diseases (NCDs) such as cancer, diabetes and heart ailments. That might explain why FDA approval for Hetero’s nilotinib was described as a milestone for the global health community, since it paved the way “for broader distribution of essential cancer medication under the VL [voluntary licence] mechanism”.

That is a patently overblown claim, since a scrutiny of this particular VL reveals that almost everything is illusory, starting with the fact that there was no patent block to be negotiated in the first place. But let’s understand how MPP sets about fulfilling its patent pooling task. Set up in 2010 by Unitaid, MPP negotiates with pharma companies who hold the patents on certain priority drugs to seek non-exclusive VLs for generic production. Once these are secured, MPP farms out sub-licences to select generic manufacturers to produce their version of patented medicines for distribution to LMICs at lower cost.

Given the rigid rules of the intellectual property regime, specially in the pharma industry and the chronic inequity in access to new and innovative medicines, the patent pooling system was viewed as an innovation that offered a way to expand access to medicines. In recent times, new molecules are not just patented but have patent thickets around them—some drugs have as many as 70-odd patents—and innovator companies take out secondary patents to prolong the patent on new compounds to more than twice the usual term of 20 years.  

While governments can issue compulsory licences—a mechanism to override patents—to tackle public health crises, few developing countries have had the gumption to do so because retribution from the rich nations where the innovator companies are based is swift and punitive. Generic manufacturers also have the option to challenge unfair and weak patents, but few are willing to do so since VLs offer a safer route with assured returns. India has over the decades become the hub for VLs, for both bilateral deals with innovator firms and for pacts with MPP. With the latter, Indian generics makers account for 28 of the 53 companies in its fold.  

MPP flaunts impressive data. It claims US $1.9 billion has been saved through the 22 VL agreements it has signed so far. This, it says, helped the organisation supply 43.56 billion doses of treatment and provide 118.04 million patient-years of treatment. As a result, it was possible to avert 38,000 deaths (all figures till the end of 2023). Be that as it may, MPP’s first agreement on a cancer drug is a copybook example of a deeply flawed VL. It does little to widen access while allowing Big Pharma to dictate the terms. It also highlights the dangers of collaborating with public health organisations closely allied with the drug industry.   

The problems with MPP’s voluntary licensing accord with Novartis are manifold and too obvious. It was signed in October 2022 when there was less than a year for the patent on nilotinib to run out. MPP then concluded the sub-licensing with four generics manufacturers in June 2023 when the patent had expired in India, a major market, and in most territories. Yet, the agreement included two: one listing the Indian compound patent as the manufacturing patent and the other listing the secondary patents in seven countries.  

MPP’s own Expert Advisory Group was sharply critical of the 2022 deal, pointing out that the problem stemmed from its collaboration with the Access to Oncology Medicines (ATOM) Initiative. ATOM had been launched just a few months earlier by the Union for International Cancer Control and was joined by both non-profit organisations and Big Pharma, along with their powerful lobby group International Federation of Pharmaceutical Manufacturers and Associations (IFPMA). ATOM’s basic philosophy is to facilitate the use of VLs for patented cancer medicines.

According to the deal, the four selected generic companies, three of them Indian, could manufacture nilotinib in India and supply it in 44 territories listed in the licence. The expert group noted wryly that this number was essentially irrelevant because after July 2023, any company would be free to sell generic nilotinib in 108 LMICs and 22 high-income countries since Novartis had no valid patents in these regions. In sum, the only “true” patent territory would be the seven countries where Novartis had secondary patents filed or granted. But the number of patients in these countries who could benefit from nilotinib were far too little to justify the VL.

The expert group was of the view that for MPP to enter the area of NCDs with such a limited agreement would set the bar very low for future agreements. This would create the risk that the scope of future licenses for NCDs would remain extremely limited. It also warned MPP’s alliance with ATOM would result in a reputational risk for the agency. More scathingly, experts said that if the “success” of the nilotinib licence was viewed as important for future licences, they would like to know the success factors, given the extremely limited territory and low demand.

An additional query from this columnist: what exactly were the factors that prompted three leading Indian generics firms—the other two are Dr Reddy’s Laboratories and Eugia—to enter this pact when no licence of any kind was needed to make nilotinib?