GREG PERRY Director General, EGA World Science Forum Budapest 10-12 November 2005

1. Patents and Medicines:How the system has discouraged innovation and reduced patient access to benefits of knowledge GREG PERRYDirector General, EGAWorld Science ForumBudapest 10-12 November 2005

2. Medicines Applying Scientific Knowledge for Mankind • Medicines are an important example of where the development of knowledge and application of science can bring major benefits to humankind • Two principal sectors • Originator to develop and bring to market innovative patented products based on new investigation and knowledge • Generic to increase access to medicines, stimulate innovation through competition, and provide financial headroom for purchasing new medicines. Off–patent based on well-established use and public right to use prior knowledge.

3. Global Healthcare Challenges Needs a Responsible Solution • Ageing populations – requires measures to ensure sustainable healthcare • Population increases and growth of diseases e.g. Aids – Depression – Coronary Diseases - requires greater access to medicines worldwide • Increasing resistance to established therapies - TB anti-bacterial resistance - requires the development of new medicines • Lack of purchasing power in developing countries for critical patented medicines - requires new structures for access to medicines

4. EU’s Ageing Population and Sustainable Healthcare

5. Expenditure on Healthcare in Relation to Age

6. IP Knowledge, Ethics and Responsibility - a Balance • Healthcare challenges create critical role for both originator and generic producers of medicines • Consequently, it also requires a careful balance of the IP rights of medicines based on public interest and healthcare requirements • Increasing Access • Increasing Innovation

7. IP – Must Stimulate Real Advances in Knowledge and PatientsAccess • Whilst patents are important for encouraging innovation, excessive, frivolous and/or easily - granted patent rights will a) Restrict access - by preventing generic competition b) Discourage innovation - by allowing development of products of insignificant value to patients, and it delays research into real innovation

8. 1980s (5 properties) Primary uses Processes and intermediates Bulk forms Simple formulations Composition of matter 1990s (18 properties) Primary uses Processes and intermediates Bulk forms Simple formulations Composition of matter Expansive numbers of uses Methods of treatment Mechanism of action Packaging Delivery profiles Dosing regimen Dosing range Dosing route Combinations Screening Methods Chemistry Methods Biological Target Field of use Pharma Properties Eligible For Patenting Source: “Evolution of IPR & Pharmaceutical discovery and Development”, Eric Larson, Sr Director, Groton Site Head, Pfizer Global Research & Development. Viewed on 9/112005 at: http://www7.nationalacademies.org/step/Larson_ppt.ppt

9. Patents For Protection Not For Innovation By changing the salt or ester in the chemical make-up of an active agent immediately prior to the market release, the originator company can present old products as “new” and create a new market to effectively prevent generic competition with no benefit to patients Salts & Esters Patenting various – and often insignificant – new versions for older medications is used to create a complex array of IP protection to block registration of generic versions Secondary Patents

10. Increasing IP Protection: Example Europe • 1992 SPC regulation granting up to 25 year patent life. • 1992-94 introduction of Product Patents for pharmaceuticals in CEE and South Europe. • Mid 1990s increasing secondary patents • 1994 introduction of TRIPS. • 2004 data exclusivity increased to 8-11 yrs. • By 2005 over 7500 Patent extensions granted through SPC Regulation • 2006 Paediatric extensions • Despite increased IP the rate of “innovation is declining”

11. Innovation & Added Value NO Important Therapeutic Advance - 78% Important Therapeutic Advance - 22% Source: US National Institutes of Health (NIH) Administrative Report - February 2000

12. Innovation & Added Value “Two-thirds of the drugs approved from 1989 to 2000 were modified versions of existing drugs or even identical to those already on the market, rather than truly new medicines, according to a new study. The report also said that most of the increased spending on new prescription drugs was on products that the FDA had determined did not provide significant benefits over those already on the market.” Source: "New Medicines Seldom Contain Anything New” New York Times – 29 May 2002 - Reporting on a study by the National Institute for Health Care Management Foundation (NIHCM)

13. Ethics of Paying For Pseudo Innovation Vol 331 BMJ 8-10-05

14. Ethics of Granting Pseudo Patents • In 2000 27 NCEs granted by FDA but 6,730 patents granted in the main patent class for new drug compositions (source IPA 28/06/2004) • Many patents are subsequently challenged and “invalidated” – generic companies win 70% of cases. Why waste resources in this way?

15. Public is the Major Source of Pharma Research Funding 85% of Pharmaceutical R&D is paid for by taxpayers & academic institutions. Only 15% is paid for by Patent Holder and Industry Studies.

16. Recommendations (1) • A global re-assessment of the use of IP laws relating to medicines, particularly when granting patent extensions, secondary patents and data exclusivity • Stronger enforcement of the criteria for granting patents by patent offices –

17. Recommendations (2) • Greater encouragement of the development of genuine innovative medicines and discouraging the development and protection of "me-too" products • Allocation of public funding to research into priority medicines • Ensuring quick access to the post-patent market for generic equivalents