Commercial drug research and development (R&D) requires serious investment yet promises uncertain returns. By at least one estimate (The Tufts Center for the Study of Drug Development), the average cost of developing a new drug has risen more than three-fold in 13 years – from USD802 million in 2001 to USD2.6 billion in 2014. This figure factors in the cost of the many unpredictable failures along the way – more than 90 percent of drug candidates that reach clinical testing will fail. Even without accounting for the cost of capital, or of failure, the numbers still reach into the hundreds of millions per new drug.
So research costs are high, but if a drug succeeds, returns on investment can be huge. Successful blockbuster drugs, though not too common, generate sales of more than a billion dollars annually. It is therefore not surprising that R&D is driven and shaped by the worldwide legal recognition and protection of patents for compounds, processes and products, as these will confer on patent owners the right to prevent others from making and selling the patented product, and allow them to recoup their significant investment. Once drugs lose patent protection, companies lose control over production, because most drugs are easy to copy and can be marketed for a fraction of the originator price. The price of the cholesterol-lowering drug Lipitor, for example, recently fell by 95 percent in the face of generic competition.
Logically in such a system, the cost of developing a new drug has been too high for any substantial innovation for Type III diseases which are overwhelmingly incident in developing countries. The return on investment for these diseases is close to zero because patients cannot afford to pay high prices for the drugs they need. While this lack of innovation was largely true until the late 1990s, when the antimalarial drug pipeline was virtually empty, a look at the today’s global antimalarial portfolio shows that there are over 40 antimalarial projects either in the preclinical or clinical phases, or already approved by stringent regulatory authorities and registered. All of these drugs are developed with a strict eye to costs — with prices set at a level affordable for all public sector health services, and with distribution requirements suited for all endemic countries.
The vast majority of these projects are the result of a partnership between a pharmaceutical company and Medicines for Malaria Venture (MMV), a product development partnership.
MMV’s partnership model
MMV was created to fill the gap left by market failure due to lack of drug research for malaria, a disease whose victims cannot afford quality treatment. When launched in 1999, MMV had one single goal – to work with partners, from both public and private sectors, to discover, develop and deliver new and effective antimalarials at the lowest prices practicable; in other words, to cure and save the lives of the most vulnerable. It remains focused on this goal.
The only way MMV could make a difference to the malaria burden was by building strong alliances.
MMV not only provides malaria drug development expertise to its partners, it also supports joint R&D projects with funds raised from government and philanthropic sources, thereby “de-risking” the collaborative endeavour and effectively de-linking R&D expenditure from price. Today it has a global network of more than 400 committed research and policy partners.
With partners, MMV is keeping the drug pipeline populated with promising new molecules and has jointly brought forward six new quality antimalarials for adults and children, and two drugs developed by DNDi (the Drugs for Neglected Diseases initiative) are now also in the MMV portfolio. Three hundred million treatments of Coartem®Dispersible for children, developed with Novartis, have been delivered to 50 malaria-endemic countries since its launch in 2009, at an affordable USD 0.38 for the youngest patient. Furthermore, some 53 million vials of Guilin Pharmaceutical’s artesunate injection, Artesun®, have been delivered to treat severe malaria, saving an estimated additional 300,000-350,000 lives compared to quinine treatment.
None of this would have been possible without MMV’s extensive partnerships, partially governed by a pragmatic approach to intellectual property (IP). MMV has developed an effective strategy that leverages the power of IP and ensures that the antimalarials it develops with partners reach the people who need them, even the very poor.
A dual strategy for the double-edged sword of IP protection
Developing a new drug and deciding to protect its IP is not merely about investment or protecting returns, it is about saving lives and alleviating suffering. That is why drug development is subject to emotional, social and ethical scrutiny. In the pursuit of its public health goals, MMV typically renounces the primary advantages offered by IP of profit and protection, and finds its value elsewhere.
In MMV’s partnership model, research is conducted with varying degrees of openness depending on the stage of research.
Open drug discovery
During early-stage research, MMV’s perspective on IP is relatively open. It currently uses three lines of action, Open Source, Open Access and the preferred model of Open Innovation.
Open Source: In 2011, MMV launched an Open Source Drug Discovery programme in which research is reported, and thus shared, openly, online and in real-time, allowing all researchers working in that area to contribute to and accelerate science and drug development. As a result, molecules are being made for malaria drug research.
Open Access: In this approach, data, compounds, and publications are made available to researchers to maximize their use across diseases. MMV’s Malaria Box is a prime example, offering researchers a cost-free opportunity to screen 400 antimalarial compounds against other diseases. Researchers have found hits against 16 different protozoa, seven helminths and other bacteria. The success of the Malaria Box has led to the Pathogen Box, which offers 400 molecules with activity against one of a range of neglected diseases. In both cases, MMV requests that resulting data are placed in the public domain.
Open Innovation: Over the years MMV has built a community that shares data and assays among a set of partners. The projects operate within contractual “bubbles”, with a semi-permeable membrane securing confidentiality that allows for the key partner to generate IP and file a patent. If academia is involved, IP can be co-owned by MMV and academic partners and, if needed, MMV can secure an exclusive, worldwide, royalty-free, sub-licensable license to pursue the development of the compounds. In some cases, all IP rights are assigned by academia to MMV. If a Pharma partner is involved, it tends to assume ownership but it commits to granting MMV an exclusive, worldwide, royalty-free, sub-licensable license in the field of malaria in the event it withdraws from the collaboration. In this model, risk, cost and effort are shared among the partners. Since 2010, MMV’s Open Innovation collaborations have delivered a strong pipeline of 17 new candidate molecules for malaria.
Protected drug development
Moving to the more complex drug development activities initiated by MMV, the approach changes and patent protection may be sought if the compounds show a new mechanism of action (composition of matter, method of use) and appear particularly promising.
If MMV is already collaborating with a pharmaceutical partner (a candidate may have emerged from the screening of a partner’s library, for example), the pharmaceutical partner will decide on a patent strategy. If MMV has generated promising candidate compounds with academia and is pursuing the development alone while searching for a pharmaceutical partner, it will almost always seek patent protection for its candidates, thereby increasing the value of its “assets”. The majority of antimalarial candidates currently in MMV’s pipeline (translational and development stages) have clearly defined IP ownership and are patent protected either by MMV or its partners.
Value allocated to the IP will facilitate the negotiation of collaboration agreements with pharmaceutical partners, whose skills and experience in taking drugs through trials and registration to the market are essential. The mutual understanding, however, is clear: antimalarial products emerging from an MMV-Pharma collaboration must be affordable (sine qua non) and pharmaceutical partners will operate on a “no-profit, no-loss” basis (with third-party audit to verify cost structure). Things are equally clear regarding the patent strategy: patent protection does not extend to malaria-endemic countries (with the exception of India, China and Brazil). The protection is primarily sought in the “large economies” of the world, in case the compound has application outside the field of malaria for a more lucrative indication. The other reason protection is sought is to provide an element of control over the quality of the manufacture of the products. To meet its public health goal of developing efficacious and affordable antimalarials for vulnerable populations, MMV may use its patent protection as a deterrent to the production of suboptimal antimalarials.
At MMV, IP is valued and used strategically to fulfil its public health mission. It often serves as a tool to attract industry partners, an incentive to conduct research and a guard against misuse of innovation. In the effort to bring quality, innovative treatments to malaria sufferers, MMV’s IP policy has evolved into a dual strategy, successfully combining the strengths of the Open Innovation approach and IP protection.
Go to the article online in WIPO magazine.