The Medicines Patent Pool’s mission is to improve the health of people living with HIV in low- and middle-income countries by facilitating generic competition, in order to both lower the prices of needed medicines and spur the development of needed new formulations. It does this by negotiating for licences from key HIV medicines patent holders and then making these available to generic companies and other manufacturers to produce low cost, quality HIV treatments for use in developing countries. It is the first patent pool for HIV medicines.

The Pool acts as a ‘one-stop shop’ for patent holders, manufacturers of generic drugs or other organisations interested in engaging in research and development. This means it ‘pools’ multiple patents related to HIV medicines in one place, which are then licensed out by the same one entity, in order to cut down on transaction costs for all parties involved.

This ‘pooling’ allows more affordable and more adapted versions of patented drugs to be more easily produced as generics, long before their 20-year patent terms run out. Generic competition both brings down prices and helps spur innovation.

It works as follows: patent holders – pharmaceutical companies, research institutes, governments, universities, etc. – are invited voluntarily share their patents with the Pool. Once licences are in the Pool, the Pool identifies qualified manufacturers who can use the patents to manufacture needed medicines. Finally, robust generic competition aided by the Pool will ensure prices come down and more people can afford access to drugs.

Not only will the Pool help speed up the process of getting urgently-needed newer and improved HIV medicines to people who need them at much more affordable prices, it will also foster the development of needed products that do not yet exist, such as ‘fixed-dose combination’ (FDC) pills containing two or more newer medicines in one pill, adapted medicines like those that can be used in hot climates without refrigeration, and HIV medicines for children. The ‘one-stop shop’ service streamlines and facilitates negotiations that may be required to combine two or three medicines into one pill.

The Pool is a win-win-win model, whereby patent holders are compensated for sharing their patents, generic manufacturers gain access to markets, and people living with HIV benefit more swiftly from appropriate and adapted medicines at more affordable prices.

How does the Pool aid access?

The Pool mechanism reduces transaction costs, making it easier for potential generic manufacturers or new innovators to enter the market. The situation today is that generics who wish to manufacture patented medicines are obliged to enter negotiations with the originator patent holding company of every patent they need. Each such negotiation carries risks in terms of cost and uncertainty. And as HIV medicines best suited for resource-poor settings – notably, fixed-dose combinations – often carry many patents, the situation is often complex:

A further difficulty for treatments requiring several patents is that just one patent in either the country of manufacture or the country where the medicine is to be sold can often be sufficient to block the production of the medicine.

A successful Pool could change this situation by dramatically simplifying the interaction between patent holders and generic producers, and acting as a central repository for all the patents needed to make medicines:

Because all Pool licences are fully transparent, per our transparency policy [pdf], all terms and conditions can be evaluated fully before a generic company decides to take a licence.

The ultimate result of the Pool’s success will be this: HIV treatment programmes will be able to provide for the rising number of people in need of medicines while keeping the cost of drugs low. Innovators focused on developing country markets will have easier access to the licences they need to create the medicines people living with HIV need. Generic companies and purchasing mechanisms will no longer have to go through the uncertainty and expense of negotiating licences drug-by-drug and country-by-country. And patent rights holders get to operate within their existing business model, receive a fair royalty stream, and be a credible part of aiding public health and meeting the world’s goals of achieving universal access to HIV medicines.

Most importantly, people living with HIV will get access to the adapted formulations they need at prices they can afford.

A step-by-step walkthrough of the Pool’s work

1. Prioritising HIV medicines:
The Pool developed a list of targeted HIV medicines based on an analysis of the clinical significance of different HIV medicines as well as potential patent barriers to access.

2. Inviting patent holders to negotiate:
Letters went out inviting relevant patent holders to enter negotiations to license to the Pool on 1 December, 2010: World AIDS Day. The status of the Pool’s interaction with relevant patent holders is tracked on the Company Engagement page.

3. Negotiating public health-oriented licences:
Willing patent holders enter negotiations to licence to the Pool. This means that the patent holder will let another producer manufacture and sell generic versions of the patented medicine in developing countries, or develop adapted formulations, under certain terms and conditions. The Pool seeks licences that push the status quo in the direction of greater access to medicines — covering more countries and containing public-health oriented terms and conditions — with the ultimate aim of ensuring all people living with HIV in developing countries can access the treatment they need at prices they can afford.

4. Signing an agreement:
Before a licence is signed, it must be reviewed by the Pool’s Expert Advisory Group. Once signed, all Pool licences are published in full on the Pool’s website. This represents an unprecedented level of transparency in a field where voluntary licences are negotiated in secret and kept that way.

5. Sub-licensing to generics:
Once licences are in the Pool, generic manufacturers and other entities, such as product development initiatives, can obtain a licence. The manufacturer is then free to develop, produce and sell the medicine in the agreed countries under strict quality assurance. The Pool will particularly ease the development and production of fixed-dose combination drugs (FDCs) that have proven to simplify treatment for people living with HIV and facilitate treatment scale-up in developing countries.

6. Working with sub-licensees:
Once a sub-licence is signed, licence management begins. Pool staff work with sub-licensees on product development and regulatory approval. Quality assurance is important to the Pool, and we work with mechanisms like the World Health Organization Prequalification of Medicines Programme [pdf] to ensure the quality, safety and efficacy of medicines made using Pool licences.

7. Bringing down prices, ensuring access:
Once the licences are agreed and production has begun, robust market competition ensures lower sustainable prices are achieved. This means more people can be treated with the same amount of money, which is crucial in a climate of increasing needs and funding challenges. Patent holders get a small royalty on the sales of the medicines, and people living with HIV get access to affordable, adapted treatment they need at prices they can afford. Working together, everybody wins.