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The Role of Universities

The Role of Universities. Amit Khera MS-1 University of Pennsylvania School of Medicine. Adapted from presentation by Hillary Freudenthal & Sam Chaifetz. The “Access Gap”. WHO 2004. Why focus our attention and energies on universities’ tech transfer policies?.

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The Role of Universities

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  1. The Role of Universities Amit Khera MS-1 University of Pennsylvania School of Medicine Adapted from presentation by Hillary Freudenthal & Sam Chaifetz

  2. The “Access Gap” WHO 2004

  3. Why focus our attention and energies on universities’ tech transfer policies? • Avowed mission towards advancing the public good • Upstream in drug R&D • Access to researchers and administrators

  4. Penn CTT Mission statement • “Commercialize Penn research discovery for the public good”

  5. What role do universities play? • Increasingly important part of U.S. R&D • U.S. universities are responsible for more than 50% of the country’s basic research science • Growth in patenting and commercialization: • 1970 to 2001, ten-fold increase in number of U.S. patents issued annually to U.S. academic institutions • AUTM data show significant increase in licensing activity • “Major players in the biopharmaceutical arena” • A 2000 report suggested that 15 of the 21 drugs with the most therapeutic impact were derived from federally funded projects at academic centers

  6. Innovations at various universities… • HIV/AIDS • Yale: d4t (Zerit) • U Minn: abacavir (Ziagen) • Emory: 3TC (Epivir), emtricitabine (Emtriva) • Duke: t20 (Fuzeon) • Glaucoma • Columbia: latanoprost (Xalatan) • Hepatitis • U of Washington: Hep B Vaccine • Cancer • Michigan State: Cysplatin and Carboplatin • Others with key university input: Epogen, Erbitux, Prilosec, streptomycin, penicillin, insulin

  7. 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?

  8. Who funds university research? Over the last decade, nearly 60% of academic R&D was funded by the federal government, while industry supplied 6%

  9. Who funds university research? University of Pennsylvania, 2004

  10. What do universities do with this research?Historical Perspective For much of the 20th century, universities rarely patented their research output Rai & Eisenberg 2003

  11. Increase in Patenting and Commercialization: Bayh-Dole Act (1980) • Goal: • Increase technology transfer and utilization of federally-funded research • What did it do? • Universities given right to retain the property rights to inventions made under federal funding; exclusive licensing permitted Growth in Patenting (faster than other patenting in the United States)Surge in Licensing ActivityIncrease in Royalties from Licensing

  12. The Birth of a Drug

  13. The Realities of University Tech Transfer Licenses Despite increasing commercialization, TTOs – overall – aren’t making a lot of money! “The dirty secret is that for many universities—perhaps most—they are not breaking even, much less making money on the proposition.”Johns Hopkins President William Brody

  14. The Realities of University Tech Transfer Licenses • Many university owned patents don’t get licensed; most licensed patents don’t result in big money for universities. • AUTM Annual Survey: <1% of 21K licenses generated >$1M (2000) • On average, revenues from licensing patents equal up to 4% of a university’s research funds … even smaller % of overall university budget • Small number of schools, making money from limited number of very successful patents

  15. Universities prize tech transfer deals • Discretionary funds • Faculty Incentives • TTO Bias • Respond primarily to financial incentives • Despite economic reality and mission statement

  16. Case StudyYale: the d4T story • Rather typical facts • When/where of patenting • University charter and the public good • Economics of tech transfer • University interests • Role of (student) activism and press attention • Significant impact on pricing / access • No impact on economic incentives for pharma/university

  17. The timeline • 1966: compound synthesized under a National Cancer Institute grant at the Michigan Cancer Center • 1984: Yale scientists prove that d4T is potent against HIV in cell cultures • 1986: Yale files for a “use patent” • 1988: Yale issues BMS exclusive worldwide license (and files for patents in South Africa, Egypt, etc.) • 1994: FDA approval • 1994 - 97: BMS takes out process patents

  18. The Money Trail • 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.

  19. MSF’s request; Yale’s response • Feb 14, 2001: MSF request to Yale: • Asking Yale if they “would consider the importation of generic versions of stavudine for use in providing treatment free of charge to people with HIV/AIDS unable to afford treatment an infringement of your intellectual property rights,” • And if so, if Yale would “issue a voluntary license to allow the importation and use of generic stavudine in South Africa.” • March 1, 2001: Yale replies: • Yale denies the request on legal grounds, indicating that they have granted an exclusive license to Bristol-Myers Squibb (BMS)

  20. MSF’s Reply • March 9, 2001: MSF responds: • MSF suggests to Yale that their own policy states that a key objective is “the benefit of society in general” • MSF points out that d4T is not reaching those who need it in South Africa, and suggests that Yale has the ultimate power over their patent, and could breach their contract with BMS if need be. • March 11, 2001: NYT story “Yale Pressed to Help Cut Drug Costs in Africa”

  21. March 14, 2001: Concessions! “EMERGENCY PATENT RELIEF” • “The Company will ensure that its patents donot prevent inexpensive HIV/AIDS therapy in Africa.The patent for Zerit, rights to which are owned by Yale University and Bristol-MyersSquibb, will be made available at no cost to treat AIDS in South Africa under an agreement the Company has recently concluded withYale.” • In June 2001, “agreement not to sue” signed with Aspen Pharmacare.

  22. Implications For South Africa • Rapid, thirty-fold reduction in the price of d4t in South Africa (from more than $1600 to $55 per patient per year) • August 2003, Aspen began selling generic d4t in South Africa for up to 40% less than the reduced BMS price • The national ARV program being rolled out in South Africa will rely upon generic versions of d4t For Yale • No loss of income associated • Subsequent major Pfizer investment

  23. Is d4t an anomaly? Gilead pays Emory $525 Million for royalty interests for emtricitabine July 2005

  24. Should access provisions have been included?

  25. Drug Development Pipeline UAEM d4T Advocacy O’Driscoll 2004

  26. Lessons Learned • Proactive solution is preferable • Activism does not always work • Technology Transfer Offices responds to financial pressures • Administrative simplicity required • Collective Action

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