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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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Avowed mission towards advancing the public
good
Upstream in drug R&D
Access to researchers and administrators
Penn CTT Mission statement
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“Commercialize Penn research discovery for the
public good”
What role do universities play?
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Increasingly important part of U.S. R&D
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Growth in patenting and commercialization:
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U.S. universities are responsible for more than 50% of the country’s
basic research science
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”
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A 2000 report suggested that 15 of the 21 drugs with the most
therapeutic impact were derived from federally funded projects at
academic centers
Innovations at various universities…
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HIV/AIDS
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Glaucoma
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U of Washington: Hep B Vaccine
Cancer
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Columbia: latanoprost (Xalatan)
Hepatitis
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Yale: d4t (Zerit)
U Minn: abacavir (Ziagen)
Emory: 3TC (Epivir), emtricitabine (Emtriva)
Duke: t20 (Fuzeon)
Michigan State: Cysplatin and Carboplatin
Others with key university input: Epogen, Erbitux, Prilosec,
streptomycin, penicillin, insulin
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?
Who funds university research?
Over the last decade, nearly 60% of academic R&D
was funded by the federal government, while
industry supplied 6%
Who funds university research?
University of Pennsylvania, 2004
What do universities do with this research?
Historical Perspective
For much of the 20th century, universities rarely patented their
research output
Rai & Eisenberg 2003
Increase in Patenting and Commercialization:
Bayh-Dole Act (1980)
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Goal:
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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 Activity
Increase in Royalties from Licensing
The Birth of a Drug
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
The Realities of University
Tech Transfer Licenses
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Many university owned patents don’t get licensed; most licensed
patents don’t result in big money for universities.
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AUTM Annual Survey: <1% of 21K licenses generated
>$1M (2000)
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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
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Universities prize tech transfer deals
Discretionary funds
 Faculty Incentives
 TTO Bias
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Respond primarily to financial incentives
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Despite economic reality and mission statement
Case Study
Yale: the d4T story
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Rather typical facts
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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
The timeline
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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
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.
MSF’s request; Yale’s response
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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)
MSF’s Reply
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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.
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March 11, 2001: NYT story “Yale Pressed to
Help Cut Drug Costs in Africa”
March 14, 2001: Concessions!
“EMERGENCY PATENT RELIEF”
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“The Company will ensure that its patents do not prevent
inexpensive HIV/AIDS therapy in Africa. The patent for Zerit,
rights to which are owned by Yale University and Bristol-Myers
Squibb, will be made available at no cost to treat AIDS in South
Africa under an agreement the Company has recently concluded
with Yale.”
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In June 2001, “agreement not to sue” signed with Aspen
Pharmacare.
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
Is d4t an anomaly?
July 2005
Gilead pays Emory $525 Million for royalty
interests for emtricitabine
Should access provisions have been included?
Drug Development Pipeline
UAEM
d4T Advocacy
O’Driscoll 2004
Lessons Learned
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Proactive solution is preferable
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Activism does not always work
Technology Transfer Offices responds to
financial pressures
Administrative simplicity required
Collective Action