Statement Of Sen. Patrick Leahy
“Public Research In The Public Interest Act Of 2006”
September 29, 2006

MR. LEAHY: Mr. President, today I am pleased to introduce the “Public Research in the Public Interest Act of 2006.” If enacted, this bill will save lives and improve the quality of health for millions of families living in impoverished nations. Recently, I have introduced or cosponsored six bills to address the increasingly important issues that relate to global health and the need for earlier access to generic medicines in the United States.

Each year, millions of people needlessly suffer from disease in impoverished countries worldwide because they lack access to life-saving medicines. And each year, America’s world-renowned research universities develop innovative treatments to combat these diseases. However, under our current system, these treatments do not get to far too many of the families in impoverished nations who so desperately need them.

Today, 15 percent of the world’s people consume about 91 percent of the world’s pharmaceuticals. The high price of life saving-medicines -- medicines we take for granted -- puts them far beyond the reach for millions of the most vulnerable populations.

While the concept of my bill is simple, the implications are profound. If passed, my bill would greatly lessen the cost burden of generic drugs in the developing world. It would achieve this by requiring federally funded research institutions to permit their inventions, such as drugs, vaccines, and innovative medical devises, to be provided inexpensively by generic companies distributing medical supplies to the developing world.

Federally funded labs and research institutions have a vital role to play in meeting this goal. For example, Yale University has an agreement with Doctors Without Boarders to permit their generic version of its life-saving AIDS drug to be used for a pilot treatment program in South Africa. To date, Yale’s humanitarian endeavor, which in no way reduced their licensing revenues, continues to save thousands of life.

It is time to ensure that public funds truly serve public purposes -- in this instance, delivering essential health care needs at minimal costs to American taxpayers, universities, and pharmaceutical companies. Unfortunately, this Congress has been tied up in knots recently and has been unable to pass even critical appropriations bills. The measures before us are crucial. This comprehensive approach toward providing better global health aid and better access to generic drugs should become law, and I am committed to trying to make it so. I look forward to working with my colleagues on both sides of the aisle to enact this important legislation.

I have recently introduced or sponsored six bills to address the need for better access to low-cost generic medicines. Two of these bills relate to global health, and four of them address the need for earlier access to generic medicines in the United States.

Federally funded laboratories and other research institutions have a critical role to play in delivering affordable medicines to these sick and suffering worldwide. In 2000, a Senate Joint Economic Committee Report found that public research was instrumental in developing 15 of the 21 drugs considered by experts to have had the highest therapeutic impact on society.

Between 1970 and 2001, there was a ten-fold increase in the number of U.S. patents issued annually to U.S. academic institutions. The World Health Organization’s 2006 Commission on Intellectual Property Rights, Innovation, and Public Health has also recently recognized the crucial role of universities. The WHO recommended that universities adopt licensing practices designed to increase access to medicines in developing countries.

The report also tells the story of one way in which the crucial role of university innovations and other publicly funded research in promoting global public health first came into the public eye. It is an interesting story.

In 2001, the international organization Médecins Sans Frontières, or MSF, requested Yale University’s permission to use its generic life-saving AIDS drug, stavudine, for a pilot treatment project outside Cape Town.

This was at a time when HIV drugs were first being introduced in the developing world. The costs were prohibitive. Scientists at Yale University had discovered stavudine’s value in the fight against AIDS, and Yale University was the key patent holder.

In response to MSF’s request, Yale and Bristol-Myers Squibb jointly announced that they would permit the sale of generics in South Africa and that Bristol-Myers Squibb would lower the price of its brand-name stavudine by 96 percent throughout sub-Saharan Africa.

The Yale/Bristol-Myers Squibb announcement was highly significant in the campaign for access to affordable first-line AIDS treatments. Yale and Bristol-Myers Squibb’s humanitarian action did not reduce licensing revenues with respect to Yale. Meanwhile, Yale’s invention to this day continues to save thousands of lives. According to a recent report by the WHO’s AIDS Medicines and Diagnostics Service, stavudine is one of the three first-line HIV medicines that together constituted almost 90 percent of total procurement in 2005.

Unfortunately, this has been an isolated success story rather the road to greater access for the many important inventions that come out of publicly funded research institutions.

With respect to HIV/AIDS treatment alone, at least two major drugs based on university inventions have come to market since the 2001 stavudine announcement: emtricitabine, developed in large part at Emory University and sold by Gilead Sciences as Emtriva; and T-20 developed in large part at Duke university and marketed as Fuzeon by Hoffmann-La Roche and Trimeris. Just this summer, Yale University announced the license of a new candidate for an AIDS drug based on stavudine. Called “4’-ethynyl-stavudine” (or abbreviated more simply as Ed4T). Early testing suggests that it may be both more effective and less toxic than its famous predecessor.

But the question is: Will these lifesaving drugs ultimately be available in places like sub-Saharan Africa, where HIV infection rates range as high as a third of the adult population?

This bill, the “Public Research in the Public Interest Act of 2006,” would focus on this problem. By allowing licensing by generic companies of inventions coming out of publicly funded research institutions — and other associated inventions required to produce marketable medicines — it would drive down the price of new, innovative drugs in areas where they would otherwise be effectively unavailable.

Because the licensing regime this bill proposes is self-enforcing, it minimizes both administrative overhead and eliminates the need for case-by-case decisions, while preserving important intellectual property protections. Because the Act allows the introduction of generic or reduced-price drugs only into markets too poor to otherwise afford them, its terms do not threaten corporate investments or profits in wealthier nations. All generic drugs manufactured under the bill must be clearly differentiated from the versions sold in developed nations, where the brand-name companies make their profits.

Moreover, publicly funded research institutions would receive royalties from the sale of inventions covered by this bill in developing markets. While the initial payment of the royalties will typically go the research institution itself, the bill leaves complete freedom to these institutions and their licensees to decide how such royalties will ultimately be shared. This freedom is especially important because the inventions from universities and other research institutions often form only one part of the collection of intellectual property necessary to manufacture a finished, marketable drug. The appropriate division of the royalties paid by generics for this package of rights in the developing world will be different for different drugs and medical devices, depending on whether the university’s contribution is more or less central to the finished product. This Act would allow all the various parties the flexibility to divide these royalties appropriately.

I should be clear, however, that the bill I introduce today is an initial proposal. I look forward to working with research universities in the United States on this important matter. I also intend to work with the companies involved in creating, licensing, and bringing to market the fruits of America’s unparalleled research institutions as we continue to shape this solution.

Indeed, the best answer may not be legislative at all, if the groups involved can come together around a different approach. But however it is achieved, I believe that increasing the availability of the many medical inventions that come from publicly funded research centers is a good solution to pressing global health concerns.

Universities, in particular, are unique institutions with unique public commitments. They are, before anything else, institutions dedicated to the creation and dissemination of knowledge in the public interest. The “Public Research in the Public Interest Act of 2006” is designed in the spirit of that commitment.

This bill completes a package of six bills that I have recently introduced to increase access to medicines in the United States and to address the global public health crisis. While it is the magnitude of this problem that demands that we, as a Nation, take action, it is the small things, the individual stories that often speak to us most clearly at a personal level.

In my office hangs a photograph I took of three young boys on the side of a mountain in Turkey. I found them flying a kite off the edge of a cliff that overlooks a vast slum. They had made the toy out of scraps of paper, patched together with tape and string, and were flying it on the currents rushing up the face of the rock.

I recalled fearing for their safety as they played so precariously close to the edge. But these children faced much greater risks. When my grandchildren get sick, we can always be sure they will get the medicines they need. For these boys, there is no such guarantee.

These boys, and the millions of children and others like them around the world are the reason behind each of the six bills I have introduced.

Earlier this summer, I introduced a bill which can be the catalyst for empowering U.S. generic companies to save the lives or improve the health of millions of families in impoverished nations. Under the “Life-Saving Medicines Export Act,” U.S. companies can make low-cost generic versions of any medicine for export to impoverished nations that face public health crises when those impoverished nations cannot produce those life-saving medicines for themselves.

This bill is based on World Trade Organization agreements permitting nations with pharmaceutical industries to help nations in need. The World Health Assembly and the World Health Organization have adopted resolutions urging all WTO member nations with a generic capability to adopt laws that implement that agreement. On December 6, 2005, the Office of the U.S. Trade Representative announced that it “welcomes” efforts to “allow countries to override patent rights when necessary to export life-saving drugs to developing countries that face public health crises but cannot produce drugs for themselves.”

This bill addresses the urgent needs of millions of low-income families in impoverished nations while protecting the interests of the patent owners of these life-saving medicines. As in the “Public Research in the Public Interest Act,” introduced today, generic companies are only permitted to use the compulsory license in the bill in developing nations, where low-income families are simply too poor to purchase the “brand-name” versions, and the generic versions must be clearly marked as not for resale in developed nations. Thus, both bills pose the risk of minimal losses for patent holders while generating new revenue for the brand-name companies from the royalties on generic sales.

The four additional bills that complete this “Access to Medicines” package seek to preserve incentives for U.S. generic companies to enter and compete in the market. Increased competition leads to lower prices and saved lives.

First, in the wake of the Supreme Court refusal to hear the drug patent case called Federal Trade Commission (FTC) v. Schering-Plough, I joined fellow Judiciary Committee members -- Senators Kohl, Grassley and Schumer -- in introducing legislation to explicitly prohibit brand-name drug manufacturers from using pay-off agreements to keep cheaper generic equivalents off the market. Such payments are a distortion in the market that harms patients. I was stunned that the U.S. Supreme Court refused to hear a case so important to our senior citizens. The Federal Trade Commission asked the Supreme Court to hear the arguments but the Court refused at the request of the Justice Department. It seems there may be no justice -- until that bill is passed -- for our seniors needing costly patented medicines but live where the brand-name company has paid generic companies not to compete.

Then, in July, I joined Senators Rockefeller and Schumer in introducing legislation to ban “authorized generics” that can stifle true generic competition. I said at the time that “the giant drug companies keep coming up with ways to avoid real competition and consumers need to be able to count on Congress to close each new anticompetitive loophole they come up with.” If enacted, that bill will close this anti-competitive loophole in the Hatch-Waxman Act and will preserve the incentives Congress created for generic companies to enter the market to supply American citizens and seniors with lower-cost drugs.

The fifth bill introduced was with Senator Kohl. That bill is intended to stop frivolous Citizen Petitions designed to delay introduction of generic drugs into the market place. Recently, large pharmaceutical companies have exploited that petition process to keep their profits high. In addition, I joined with Senators Schumer, Clinton and Stabenow on the “Access to Life-Savings Medicine Act” which related to developing a fast-track process for approving generic versions of biologic medicines.

I believe that these six bills, together, can save millions of lives. Recognizing the great need, there have been significant voluntary efforts made by brand-name pharmaceutical companies, foundations, and non-profits who have already donated life-saving medicines, time, personnel and money to help in the fight against deadly diseases both in America and abroad. I commend and greatly appreciate those efforts. Nonetheless, much remains to be done. My bills will both add to and complement existing efforts, by making sure even cutting edge treatments are available in developing countries, and by ensuring that America’s aid dollars and the contributions of private philanthropists are used as efficiently as they can possibly be used.

The President’s Emergency Plan for AIDS Relief Report to Congress reported that “[i]n every case generics prices present an opportunity for cost savings; in some cases, the branded price per pack of a drug is up to 11 times the cost of the approved generic version.”

The current global public health crisis is one of the great callings of our time. As a nation, we cannot afford to ignore this threat. Our own health and aspects of our national security depend on it.

We have become far more aware today of how much our own health depends on what takes place half a world away. Whether it is AIDS, SARS, West Nile Virus, the Avian Flu, or the encroaching menace of multi-drug resistant bacteria, we are all at risk. We are only an airplane flight away from wherever an outbreak may occur -- a place where the medical innovations developed in this country to combat these devastating diseases may not be available keep the outbreak under control.

In a post-9/11 world, our well-being is intimately connected with that of other nations. Health is an essential building block for a strong economy, and vital to maintain a thriving democracy. Through increasing access to essential medicines throughout the world, the United States can help to give developing nations a chance to flourish, while improving U.S. relations with large segments of the world’s population.

President Franklin Roosevelt once said: "The test of our progress is not whether we add more to the abundance of those who have much; it is whether we provide enough for those who have little."

We are fortunate, at some times and on some issues, to be able to do both. Now is one of those times, and this is one of those issues. I hope my colleagues will join me in supporting my efforts this year on the global public health crisis, including today’s addition, the “Public Research in the Public Interest Act of 2006.”

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