Lead Author: Patrick Gaule and Dominique Foray
Organization: CERGE-EI, Charles University and Czech Academy of Science and EPFL, Federal Polytechnic School of Lausanne
Country: Czech Republic; Switzerland


Many pharmaceutical products have their origins in university research. We argue that universities could use the leverage conferred by academic patents to enhance access to medicines in developing countries. For instance, when licensing technology to pharmaceutical firms, universities could limit the exclusivity of the license to developed countries only (with non-exclusive licensing for developing countries). Such `humanitarian licensing’ clauses have the potential to substantially lower prices in developing countries. The international health community can lead the way by endorsing the humanitarian licensing concept and facilitate the development of best practices.


Incorporating humanitarian licensing into university technology transfer practice

Relevance of the contribution : leveraging university research to advance global health

Most research intensive universities around the world have set up technology transfer offices. Such offices manage the licensing of university inventions and typically seek to promote the diffusion of university technology, generate revenues for the university and promote economic development (Conti & Gaule 2008). Facilitating access to university technologies in developing countries is rarely explicitly featured as an objective. Yet universities could have substantial leverage over the pricing and accessibility of drugs originating from academic research.

Famous examples of drugs covered by academic patents include Stavudine (d4T), Abacavir and Lamivudine. These three antiretrovirals are included in the World Health Organization (WHO) essential medicines list and were discovered at Yale, Minnesota University and Emory University respectively. Drugs covered by academic by patents are clearly a minority of drugs brought to the market, but they nevertheless represent a sizeable number – Sampat (2009) estimates that 18% of priority new molecular entities approved between 1988 and 2005 were covered by academic patents.

For drugs originating from universities, technology transfer offices could improve access to drugs in developing countries by including humanitarian licensing clauses when licensing new university technology. Such clauses may include price caps for sales in developing countries or -most flexibly- limit exclusivity to developed countries. To be specific, consider the following contract. Exclusivity is limited to rich countries. The university grants an unlimited number of licenses for sales in developing countries only. Provisions are included to ensure that follow-on patents will not foreclose competition in poor countries. This type of contract has been advocated by Chaifetz et al. (2007) and seems to be the simplest in terms of operationalization (A.Stevens, oral communication).

Humanitarian clauses need to be carefully designed to ensure that enough incentives to serve developing country markets but they have the potential to substantially lower prices in developing countries. There is of course a trade-off. Any contractual provision designed to enhance access will make the licensing contract less attractive to the licensee. It will only work, therefore, if the licensor (the university) accepts the sacrifice of some prospective licensing revenues: universities can maximize royalties or obtain low prices for less developed countries but not do both at the same time.

Universities sacrificing part of the licensing revenues need not be particularly problematic since the share of licensing income in universities revenues is marginal to start with, and university mission are not focused on revenue generation. Of greater concern is the fact that price caps and non-exclusivity in developing countries may make the contract so unattractive that the licensee would be unwilling to accept it even with zero royalty payment. This could arise if the university invention is of relatively low quality or if developing countries are anticipated to be the major market for the invention. In such cases, humanitarian licensing clauses may be inadvisable.

We are not the first to suggest to change university technology transfer practices to improve access to medicines in developing countries. In a Science editorial, Kapczynski, Crone & Merson (2003) argue that university research should consistently be used to advance the global public good through appropriate licensing policies. A special interest group, Technology Managers for Global Health, has been formed within the Association of University Technology Managers to "enhance academic research translation (...) in a way that advances global health causes". Universities Allied for Essential Medicines, a group of students and faculty from U.S. universities advocates that universities make changes in both their principles and policies in order to improve access to medicines in poor countries (Chokshi 2006; Chokshi & Rajkumar 2007). Brewster, Chapman & Hansen (2005), from the American Association for the Advancement of Science, seek to raise awareness among public sector managers of the importance of managing intellectual property to facilitate humanitarian access to pharmaceutical innovation.

Further interdisciplinary work between lawyers, economists and technology transfer practitioners is required to elaborate the details of how to make humanitarian licensing work well - developing best practices for technology transfer is a protracted process. There is no doubt that taking into account the health needs of developing countries makes the job of technology transfer offices more complicated still. Nevertheless, they should rise to the challenge.

What still should be done and how?

This approach has several advantages. It is WTO TRIPS compatible, it is low cost and it is based on a quite reasonable vision of what can do or should do universities in terms of transfer of knowledge and technologies towards developing countries. Therefore any university is “free” to adopt such a principle and use humanitarian terms in certain cases of licensing out its technology. The problem is that only a massive adoption of the principle will make a difference: first it will multiply the cases of humanitarian licensing; second it will have multiplicative effects by producing a more positive attitude of the industry vis a vis humanitarian principle (for example, if ideally all top 500 Universities worldwide adopt the principle, it will become hard for industry to go “elsewhere” to find business as usual licensing practices). But massive adoption raises issue of information, awareness and collective action. Here the role of the UN and other concerned organisations could be central in popularizing humanitarian licensing principles, producing guidelines, highlighting success stories and generating positive expectations. The policy is likely to be self-reinforcing resulting in significant leverage effects for a very low cost to start.

The international health community can lead the way by endorsing the humanitarian licensing concept and facilitate the development of best practices.

Bibliography and References

Brewster A, Chapman A & Hansen S (2005) “Facilitating Humanitarian Access to Pharmaceutical and Agricultural Innovation" Innovation Strategy Today 1(3): 1-16

Chaifetz S, Chokshi D, Rajkumar R, Scales D & Benkler Y (2007) “Closing the access gap for health innovations: an open licensing proposal for universities" Globalization and Health 3(1)

Chokshi D (2006) “Improving Access to Medicines in Poor Countries: the role of Universities" PLOS Medicine 3(6): e136.

Chokshi D & Rajkumar R (2007) “Leveraging University Research to Advance Global Health" Journal of the American Medical Association 298(16):1934-1936

Conti, A., & Gaule, P. (2008). The CEMI survey of technology transfer offices. Working Paper. Ecole Polytechnique Fédérale de Lausanne.

Kapczynski A, Crone E & Merson M (2003) “Global Health and University Patents" Science 301(5640):1629.

Sampat B (2009) “Academic Patents and Access to Medicines in Developing Countries” American Journal of Public Health 99(1):9-17