E-drug: Branded or generic oseltamivir for bird flu? (3)
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Roche's Illusory Offer of Voluntary Licenses for Bird Flu Medicines
Brook K. Baker
Health GAP
October 18, 2005
Rocked by a barrage of threats from several countries to issue compulsory
licenses to increase affordable access to expanded quantities of Tamiflu,
Roche has issued a press release today stating "its willingness to enter
discussions with governments and other manufacturers on the production of
Tamiflu for emergency pandemic use." Roche's CEO, William M. Burns,
commented, "[W]e are prepared to discuss all available options, including
granting sub-licenses, with any government or private company who approach
us to manufacture Tamiflu or collaborate with us in its manufacturing."
The offer is conditioned on whether "such groups can realistically produce
substantial amounts of medicine for emergency pandemic use, in accordance
with appropriate quality specifications, safety and regulatory guidelines."
Roche's offer of voluntary licenses is illusory in its present form.
First, Roche says that it is prepared to "discuss" licenses, but does not
promise to issue any licenses whatsoever or even to expedite the normal
slow pace of licensing negotiations. Second, Roche's offer does not
clarify whether licenses will have restrictive pricing terms whereby Roche
can set the selling price and/or require an above-market royalty rate.
(Roche could be suggesting that it will cooperate to increase quantities
but that it will not reduce price.) Third, Roche does not clarify whether
it will impose geographical limitations on sales, thereby limiting access
to disfavored markets only. Fourth, Roche does not clarify that it will
license manufacturing expertise so that generic products can be brought to
market more quickly. Finally, Roche does not clarify that it will assist
licensees in obtaining product registration and marketing approval on an
expedited basis even where data exclusivity rules might otherwise block
registration.
In other words, Roche is attempting to privatize the response to a looming
public health crisis behind a opaque screen of private negotiations.
Governments and consumers could sit on the sidelines while these
ill-defined, private negotiations are taking place, but wouldn't that
needlessly delay a robust public response that would in turn catalyze an
expanded and cheaper market for Tamiflu.
Roche needs to clarify its current, illusory offer. It should offer
unrestricted and open licenses to any company that can meet quality and
safety guidelines. It should set a modest royalty no more than 4%. It
should not place limits either on price or geographical market. Finally, it
should offer its manufacturing expertise and comprehensive cooperation with
the registration process.
Even then, sovereign countries should act proactively to issue compulsory
licenses allowing both domestic production (if possible) and importation.
Signals like these from countries that they are willing to create immediate
markets for generic producers will provide market incentives for a
significant number of generic producers. Large-scale production will in
turn cause the cost of intermediaries to fall and price competition will
assure that the medicines become more affordable, especially for developing
countries.
Brook K. Baker
Health GAP
B.Baker@neu.edu