BUL 6810 Effective and Non Abusive Use of Patent Paper

Management Team Assignment #2

Read WTO case study: “Patents, parallel importation and compulsory licensing of
HIV/AIDS drugs: the Experience of Kenya (bb)
View film excerpt: “Fire and Blood” (bb)
Your management team is part of a pharmaceutical company that has been subpoenaed by
Congress to testify about the company’s decision to oppose the granting of compulsory licensing
by the World Trade Organization to Kenya with respect to HIV/AIDS drugs developed and
manufactured by the company. A compulsory license would permit a major Indian
pharmaceutical competitor the right to manufacture a drug patented by your company and sell it
at a fraction of the price in Kenya and possibly in other countries as well.
Your company incurred hundreds of millions of dollars in research and development costs to
produce this anti-viral drug and now it stands to lose a great deal of money in the manufacture
and sale if the patent exception and compulsory license is granted. The shareholders will most
certainly be angered over the year-end profit and loss statement. The publicity has also cast your
company in a negative public image. It is expected that the company’s advertising expenses will
be substantial to restore its family oriented reputation.
Your company was also on the brink of developing a serum to cure Ebola but has had second
thoughts given the problems in Kenya. The newspaper coverage has already created a “no-win”
situation for your company:
“Ebola Cure Not Fully Developed Because Big
Pharma Not Interested In Saving Lives Of Poor
People In Africa
https://www.techdirt.com/articles/20140805/18174628123/ebola-cure-not-fully-developedbecause-big-pharma-not-interested-saving-lives-poor-people-africa.shtml
As you may have heard, there’s been a somewhat scary Ebola outbreak in western Africa. You
may have also heard about what some are calling a “secret miracle serum” that effectively stops
the impact of the virus for those who catch it. It’s an experimental drug that hasn’t undergone
human clinical trials yet, but it was apparently given to a couple of Americans and appears to be
working. There’s some indication that it would take a couple months to produce a larger number
of doses — though, again, the lack of testing here means that people really aren’t sure if it will
work (or if there are serious side effects).
That said, as one article notes, a big reason that there hasn’t been much testing on this is because
treating poor people in Africa just isn’t very profitable for the drug companies:
“These outbreaks affect the poorest communities on the planet. Although they do create
incredible upheaval, they are relatively rare events,” said Daniel Bausch, a medical researcher
in the US who works on Ebola and other infectious diseases.
“So if you look at the interest of pharmaceutical companies, there is not huge enthusiasm to take
an Ebola drug through phase one, two, and three of a trial and make an Ebola vaccine that
maybe a few tens of thousands or hundreds of thousands of people will use.”
While some may question whether or not Bausch’s statement is just from frustration from where
he is, Big Pharma execs more or less confirm his claims. Remember that it was just a few months
ago that we wrote about Bayer’s CEO claiming directly that they make drugs for rich people who
can afford it:
Bayer Chief Executive Officer Marijn Dekkers called the compulsory license “essentially theft.”
“We did not develop this medicine for Indians,” Dekkers said Dec. 3. “We developed it for
western patients who can afford it.”
As we noted at the time, it’s worth comparing that statement to what George Merck, the former
President of Merck said many decades ago concerning the pharma industry:
We try never to forget that medicine is for the people. It is not for the profits. The profits follow,
and if we have remembered that, they have never failed to appear. The better we have
remembered it, the larger they have been. “
Your management team has been assigned the job of drafting a memorandum (5-7 pages)
identifying the problem; evaluating the different stakeholder viewpoints; and, proposing a
solution or alternative solutions to the problem. The memo will be used as the basis for the
company’s testimony before Congress. You must also address whether, in the future, the
company will be willing to develop expensive drugs that will be used primarily to cure people
who cannot afford them. Both Congress and the public will want to know your company’s
answer.
You may wish to use the Hosmer problem solving model (or any other model) in analyzing the
issues.