TCS Daily


A Cautionary Tale

By Sally Satel - June 14, 2005 12:00 AM

GENEVA -- What do the national costumes of Yunan Province in China and the microbes of Panamanian rainforests have in common? Both are subjects of ongoing meetings of The World Intellectual Property Organization (WIPO) and the World Trade Organization/TRIPS. From June 6 to 15, delegates are gathering in Geneva to debate the best methods for protecting so-called traditional knowledge, cultural expressions and biological materials from misappropriation.

At issue are claims by indigenous and local communities that foreign interests are exploiting their cultural and biological bounties. These interlopers are accused of violations ranging from withholding commercial benefits that flow from products made from the communities' resources (or their traditions) to eroding their cultural identities.

Among those charging cultural infringement are the Indigenous Peoples of the Former Soviet Union. Nursing an historical grievance that dates to 1783, their delegate told of the Tsar's appropriation of sacred Crimean springs, medieval mountain monasteries and even the local herding dog (now called the Russian Shepherd Dog). The Crimean annexation tale evoked sympathy, but it was hard to know exactly what was at stake for the indigenous constituents today.

Contrast the Crimean plight -- more a symbolic bid for reparations, it seemed -- with the proposal to change international patent law to protect genetic resources. In that case, the implications are more palpable.

In fact, a new report released at the WIPO meeting last week says that weighting down the patent process with new mandates is bad for medical progress: it risks suppressing production of new drugs. Economists Timothy Wolfe and Benjamin Zycher, both with the Pacific Research Institute in San Francisco, have estimated that 150-200 new drugs would be lost over the next 20 years.

Before examining the results of the Wolfe-Zycher study, let's review recent history of intellectual property and genetic resources. The backdrop was set in 1992 with the introduction of modern efforts to protect biodiversity in the face of so-called biopiracy, the stealing of local genetic material. That year, the Convention on Biodiversity (CBD) was ratified, properly affirming the rights of countries over their biological resources in much the same way that they owned other natural resources such as timber or fishing rights.

At the most recent session of the CBD in February 2005 in Bangkok, a subgroup of 17 of the CBD countries calling themselves the Like-Minded Group of Mega-Diverse Countries -- mega because together they comprise almost three quarters of all plant and animal varieties on earth --proposed a mandatory amendment to international patent law whereby inventors would be required to list the place of origin of the genetic material used in products they make as well as any traditional knowledge held by native people that might have attracted interest in the material in the first place.

An alternative to undermining the patent system approach is a contractual one. There are numerous examples of private arrangements between drug companies and local communities that have worked well -- from the standpoint of benefiting the community, if not generating new drugs. The classic case is the relationship between Costa Rica and Merck. During the 1990's the drug company invested over $2 million in the country's National Institute for Biodiversity. Known as INBio, the project continues (though Merck's participation ended after a decade) and it is so successful that InBio scientists regularly engage with scientists elsewhere. Despite the success of the InBio-Merck project in terms of building local scientific infrastructure, none of the compounds studied by the institute went on to yield any profit.

Until now, bioprospecting has proceeded largely by private contractual arrangement. Starting three years ago, in 2002, the Convention introduced the idea of voluntary patent guidelines (the Bonn Guidelines) for what is known as Access and Benefit Sharing. The guidelines contained a provision for the "fair and equitable sharing of benefits arising out of the utilization of genetic resources." According to the CBD Secretariat, however, very few countries have implemented the voluntary regime. This may only increase the pressure for CBD members to vote for a mandatory Access and Benefit Sharing system at the next meeting of the CBD in 2006.

The prospect of alteration in patent law creates ambiguities that undermine the incentive of companies to pursue natural molecules and genetic resources. While the chilling effect on searching for new plants and molecules may not impose a major obstacle to drug development the implications for genetic information is likely to be meaningful. In particular, scientists are increasingly interested in gene sequencing information for use in medicine or crop enhancement.

But depending upon the nature of Access and Benefit Sharing (ABS) regime to be voted upon in 2006, biotech and pharmaceutical companies may be inhibited from gene hunting and genetic resource development. Consider the Brazilian delegation's proposal. Under the CBD, this plan would permit revocation of the patent and partial or full transfer of patent ownership and even financial penalties if the patent application lacked complete disclosure of origin and traditional knowledge. But how complete is complete? For example, what if Tribe A was taught by the ancestors of Tribe B how to cultivate a particular plant -- who is the true "owner" of this traditional knowledge?

Granted, the Brazilian proposal may be excessively punitive. Nonetheless, opportunities for uncertainty -- and hence litigation -- abound. How to calculate the contribution of genetic material to the value of the product when a company invests millions to bring it to market? What if the use of genetic resources or traditional knowledge was incidental, rather than directly connected, to the invention? And how to deal with India's new patent law, a Catch-22 that requires that the application include specific information about the benefits of "any invention based on any research or information on a biological resource obtained from India." Can the applicant be expected to know in advance what the benefits of his research will be, or if there will be a useable product?

With WIPO estimating that there are 3000 representatives of traditional knowledge holding communities in 60 locations around the world, the potential for disclosure irregularities and hence litigation is staggering.

And this brings us back to Wolfe and Zycher. Their study suggests that an ABS system that concentrates on the forfeiture of intellectual property creates a vast disincentive to invest in biotechnology that could somehow be traced to a country's genetic resource or related cultural knowledge. The spectre of patent revocation, Wolfe and Zycher have found, would reduce the value of biotech and pharmaceutical capital stock by $144 billion over 20 years across 27 countries. This represents a 27 percent decline in what the stock would otherwise be valued at.

In terms of actual medicines, as mentioned earlier, the authors estimate that 150-200 fewer drugs would be realized over the next 20 years should an anti-patent regime be accepted by CBD members. Considering that 38 new drugs became available in 2004 in the U.S., this is the equivalent of 4 to 5 dormant years for the pharmaceutical industry with no new treatments for the patients who are its beneficiaries.

To appreciate the impact on patients -- just focusing, for argument's sake on HIV/AIDS and cancer -- simply look at a tiny sample of the drugs that emerged in the last 4-5 years ... and then imagine they never were developed.

In October 2001, the FDA approved Viread (Gilead) for HIV. It belongs to a new class of drugs called Nucleotide Reverse Transcriptase Inhibitors. The body converts Viread into a chemical that prevents HIV from reproducing in uninfected cells, thus making it the first drug to prevent HIV. Then in March 2003, Fuzeon (Roche) was approved. It was the first drug in the long awaited new class of HIV medications called entry, or fusion, inhibitors. While other HIV medications work after HIV has entered the cell, entry inhibitors prevent HIV from entering the cell at all. Experts believe that this represents a major breakthrough in the treatment of HIV and AIDS. Fuzeon blocks HIV's ability to infect healthy immune system cells.

On the cancer front, Avastin (Genentech) was approved last year. It is used in combination with chemotherapy and is first-line treatment of patients with metastatic carcinoma of the colon or rectum. It works by preventing the proliferation of blood vessels within a tumor. By literally cutting the life line to the tumor, Avastin is the first anti-angiogenic therapy proven to help people with metastatic colorectal cancer live longer.

Many other HIV-AIDS and cancer drugs are in development. Sadly, these diseases will be with us always but as the demographics are shifting to longer lifespans, another disease -- Alzheimer's -- is expected to grow dramatically in the coming decades. For mild Alzheimer's disease, two drugs are showing promise -- Flurizan (Myriad Genetics) and Alzhemed (Neurochem) These two therapies would work by interfering with the production of beta-amyloid (the protein plaques that build up in the brain causing inflammation that disrupts and then destroys nerve cells). Currently available medications treat only disease symptoms.

Wolfe and Zycher made the rounds at the WIPO and WTO meetings, presenting their data as a momentously cautionary tale. India and Africa, one hopes, took special note. These countries are two of the most vocal anti-patent members of the Convention on Biodiversity; at the same time they are overwhelmed with new HIV-AIDS cases and stand to lose resoundingly if development of new anti-retrovirals or HIV vaccines is suppressed.

At the close of the meetings on June 15, a vision of the ABS proposal should come into greater focus. Delegates heeding the economists' findings will surely think twice before overturning a contractual system and supplanting it with a patent-encumbering regime. If not, pharmaceutical innovation will be at stake.
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