UPDATE 1-Some drug firms keen, others reluctant on AIDS pool

Wed Jul 21, 2010 2:02pm EDT

* Merck, Gilead, Tibotec in advanced talks on patent pool

* But GSK and Pfizer's ViiV is reluctant, says UNITAID

(Adds comment from ViiV CEO)

By Kate Kelland

VIENNA, July 21 (Reuters) - Drugmakers Merck (MRK.N), Tibotec and Gilead (GILD.O) are in advanced talks with UNITAID about a patent pool to make AIDS drugs more widely available to the poor, the health funding agency said on Wednesday.

But ViiV Healthcare -- a GlaxoSmithKline (GSK.L) and Pfizer (PFE.N) joint venture company for AIDS drugs and a key player in this market -- does not appear keen to join the pool, a senior UNITAID adviser said.

"ViiV is, I would say, the least interested in making this work," Ellen 't Hoen, an expert on intellectual property at UNITAID told reporters at an international conference on AIDS in Vienna. "We had expected a bit of a warmer reception."

GSK, the majority partner in ViiV, has in the past agreed to join patent pools on malaria and neglected diseases, but has always stopped short of offering to pool patents on medicines for HIV/AIDS, which it does not consider a neglected disease.

ViiV said last week it was opening its entire AIDS product line-up for licensing agreements with generic drugmakers who sell to 69 of the world's poorest countries where 80 percent of all those with HIV live. [ID:nLDE66F14I]

"We believe that the industry must act fast to meet the needs of the most vulnerable people with HIV -- and this is tangible evidence that we are doing so," the firm's chief executive said in statement to Reuters on Wednesday.

UNITAID announced the plan for a patent pool in December. The idea is to allow manufacturers of generic drugs to make low-cost versions of widely patented new medicines by creating a system for patent holders to license their technology in exchange for royalties. It is expected to save poor countries more than $1 billion a year in drug costs.

Around 33.4 million people around the world are currently living with the human immunodeficiency virus (HIV) that causes AIDS, but the vast majority of those people live in poor regions such as Africa and Asia, where medicines have to be very cheap to allow those who need them to get them.

Hoen said the idea was that this would be a "one stop shop" for generic makers to negotiate rights to make patent-protected AIDS drugs such as combination antiretroviral therapies and a new class of medicines called integrase inhibitors.

One of the strengths of the pool should be that as more big brand drug firms join, pressure will build on others to follow suit, prompting more interest from generic drugmakers and therefore even greater price competition.

"The greater the competition between producers, the more one can expect the price of medicines to fall," Hoen said.

But the weakness, she admitted, is that the system is voluntary: "At the end of the day, the patent holders willingness to do this is crucial," she said.

"We are talking to all of them, and a number of the key companies that also have newer products have said 'we want to see if we can help make this work'."

In the "first wave" are Merck, Tibotec, which is owned by Johnson & Johnson (JNJ.N), and Gilead, Hoen said. "With those companies we have had several conversations and we are now talking about how rather than whether."

The ViiV pipeline includes an experimental integrase inhibitor -- a drug that prevents a virus from integrating its genome into the DNA of the infected cell -- which is being jointly developed with Shionogi (4507.T). New clinical trial data on this drug will be reported in Vienna on Thursday.

UNITAID, a drug-purchasing body that provides long-term funding for the treatment of HIV/AIDS, malaria and tuberculosis in developing nations, has identified 19 drugs from nine firms for potential inclusion into the pool. (For a Reuters FACTBOX in AIDS drugs, click on [ID:nLDE66C0FR]) (Editing by Samia Nakhoul, Greg Mahlich)