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APPENDIX C
Public-/Private-Sector Collaboration in Pharmaceutical Research and Development: Inventory of Mechanisms

Gretchen Kidder and Christina Thacker

Staff, Institute of Medicine

Legislative And Regulatory Mechanisms

Bayh-Dole Act

Background

In 1980, the Patents and Trademarks Law Amendment (PL 96-517), also known as the Bayh-Dole Act, was enacted in an effort to promote the commercialization of government-funded inventions. The statute provides that non-profit and small-business recipients of government grants, contracts, or cooperative agreements are allowed to retain title to the inventions made with that support, provided that they comply with the act's procedural requirements and take steps to achieve practical application of the inventions. With relatively few restrictions, recipients of federal funding may commercialize such inventions themselves or license them to others for commercialization (Sherman and Englund, 1995).

Outcomes

Bayh-Dole has been credited with increasing both the number of university patents and the number of licenses to industry. The amount of money provided to universities from private industry has also increased, as have payments in royalties to universities. Bayh-Dole is also thought to have had positive economic impact, including an estimated $20 billion in earnings from all stages of early and late development of new products, support for an estimated 150,000 jobs annually, and increased tax revenues of $3.9 billion (Terry, 1996). The act is also considered responsible for accelerating the development of the entire biotechnology industry (Schimmel, 1996).

Issues

Nonetheless, the new partnerships between industry and academia have had some rocky patches and increasingly difficult interactions. Some of the conflict



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--> APPENDIX C Public-/Private-Sector Collaboration in Pharmaceutical Research and Development: Inventory of Mechanisms Gretchen Kidder and Christina Thacker Staff, Institute of Medicine Legislative And Regulatory Mechanisms Bayh-Dole Act Background In 1980, the Patents and Trademarks Law Amendment (PL 96-517), also known as the Bayh-Dole Act, was enacted in an effort to promote the commercialization of government-funded inventions. The statute provides that non-profit and small-business recipients of government grants, contracts, or cooperative agreements are allowed to retain title to the inventions made with that support, provided that they comply with the act's procedural requirements and take steps to achieve practical application of the inventions. With relatively few restrictions, recipients of federal funding may commercialize such inventions themselves or license them to others for commercialization (Sherman and Englund, 1995). Outcomes Bayh-Dole has been credited with increasing both the number of university patents and the number of licenses to industry. The amount of money provided to universities from private industry has also increased, as have payments in royalties to universities. Bayh-Dole is also thought to have had positive economic impact, including an estimated $20 billion in earnings from all stages of early and late development of new products, support for an estimated 150,000 jobs annually, and increased tax revenues of $3.9 billion (Terry, 1996). The act is also considered responsible for accelerating the development of the entire biotechnology industry (Schimmel, 1996). Issues Nonetheless, the new partnerships between industry and academia have had some rocky patches and increasingly difficult interactions. Some of the conflict

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--> is thought to arise from divergent attitudes regarding intellectual property rights and patent policy (Sederoff and Sederoff, 1996). The academic tradition of publishing research results is incompatible with industry's proprietary and competitive concerns. Another, related area of tension has to do with the experimental-use exemption provided for under the act, which is intended to foster freer use of patented biotechnology for non-profit research by academic institutions. Industry is resistant to the exemption, a position some analysts feel will be prejudicial to university-based science (Sederoff and Sederoff, 1996). Yet another issue has to do with overhead costs. Bayh-Dole stipulated that an industry entering into partnership with an academic institution would cover overhead costs. Recently, however, industry concerns with cost cutting have generated some unwillingness to pay all overhead costs (Terry, 1996). There are also many issues surrounding the appropriate allocation of funds that require clarification. All these issues suggest that there is a need for further refinement of guidelines for collaborative agreements of the sort contemplated under the act (Schimmel, 1996). References Schimmel P. A two-way street between the university and the biotechnology enterprise. Journal of NIH Research 8(8):41-43, 1996. Sederoff R, and M Sederoff. Taq polymerase and the experimental-use exemption. Journal of NIH Research 8(8):43-44, 1996. Sherman C, and S Englund. When the feds share the tab. Legal Times, 15 May 1995. (Lexis-Nexis, Allnews, Bayh-Dole). Terry WD. The academic-industrial complex: Doing well and doing good. Journal of NIH Research 8(8): 39, 1996. Orphan Drug Act Background In 1983 Congress amended the federal Food, Drug, and Cosmetics Act with the Orphan Drug Act (ODA/PL 97-414). The ODA was created to provide incentives for companies to develop therapies that otherwise would not be commercially viable because they are needed only by a relatively small number of patients. The act was intended to prompt the pharmaceutical industry to develop drugs for use against rare diseases affecting fewer than 200,000 people in the United States. The incentives for industry include research grants, a 50-percent income-tax credit on most clinical research expenditures, assistance with FDA approval, and exclusive license to market the product for 7 years immediately

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--> following FDA approval. This 7-year exclusivity has emerged as the most powerful of these incentives for industry (IOM, 1993). Outcomes Since inception of the ODA, 130 orphan drugs have been approved for marketing. With the United States experiencing benefits from this legislation, Japan and Singapore have enacted similar laws and the European Union is following suit (Meyer, 1996). In the 17 years prior to the act, industry sponsored 34 marketed and 24 experimental orphan drugs; in the first 7 years since it was passed, it sponsored 39 of 42 marketed orphan products (Ashbury, 1991). In recent years, although a bill has been introduced repeatedly in the Senate to extend the orphan drug tax credit permanently, it has not been passed. According to Senator Orrin Hatch (R-UT), sponsor of the bill introduced in February 1997, since 1983 100 drugs have been approved and some 600 are now in development (Washington Fax, 1997). The bill was referred to the Senate Committee on Finance in February and as of the date of publication no further action has been taken. Issues There are concerns that many orphan drugs, developed with considerable assistance from the U.S. government, have earned unexpectedly high profits for the manufacturers. A major flaw in the original regulation is that it provides no authority for the government to pressure for lower prices. In 1990 this concern prompted Congress to approve a measure that would tighten the requirements under which orphan drug status was applicable. The provisions included removing orphan drug status if the patient population exceeds 200,000 and allowing more than one manufacturer to market an orphan drug if simultaneous development occurred (Office of Technology Assessment [OTA], 1991). High prices and high volume sales have created the dilemma for lawmakers of how to stimulate development without causing price increases that make drugs inaccessible. In an attempt to limit high profits, legislative proposals in recent years have included decreasing the market exclusivity provision to only 4 years, with the possibility for a 3-year extension upon proof of "limited commercial potential" (Health Legislation and Regulation, 1994). Some suggestions have included withdrawal of market exclusivity once sales reach a specified amount. The research and development tax credit remains a recurring issue that has only been temporarily extended, year after year. A proposed measure to permit the tax credit to be applied to past or future tax liability might eliminate discrimination against small biotechnology companies in the development stage. If the tax credit were made permanent, companies may be better enabled to commit to the lengthy

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--> and burdensome process of developing orphan products (Marketletter, 1995). A requirement of the tax credit could be to invest the credit in orphan drug research. References Ashbury CH. The Orphan Drug Act: The first seven years. Journal of the American Medical Association 265(7):893-897, 1991. Institute of Medicine (IOM). The Children's Vaccine Initiative: Achieving the Vision. VS Mitchell, NM Philipose, and JP Sanford, eds. Washington, D.C.: National Academy Press. 1993. Marketletter. Extension of R&D Tax Credits Sought. (Nexis. IAC (SM) Newsletter Database. Information Access Company: Marketletter Publications Ltd.) 1995. Meyer AS. Testimony before the Committee on Government Reform and Oversight, U.S. House of Representatives, 12 September 1996. Office of Technology Assessment, U.S. Congress. Biotechnology in a Global Economy (OTA-BA-494). Washington, D.C.: U.S. Government Printing Office. 1991. Orphan Drug Revisions Moving Again. Health Legislation and Regulation. (Nexis. IAC (SM) Newsletter Database. Information Access Company: Faulkner & Gray, Inc.) 1994. Washington Fax, Life Science. B Metheny, ed. Senate bill would extend permanently the orphan drug tax credit. 24 February 1997. National Vaccine Injury Compensation Program Background Concerns about the costs of liability litigation motivated many pharmaceutical companies to drop out of vaccine manufacturing in the 1970s and early 1980s (IOM, 1985, 1993). Large and unpredictable settlements were determined to be an unreasonable risk, given the relatively low profit margins associated with vaccines. As a result, several expert committees endorsed the creation of a no-fault compensation program and, in 1984, the American Academy of Pediatrics took the initiative in seeking federal legislation to create what is now known as the National Vaccine Injury Compensation Program (NVICP). The National Childhood Vaccine Injury Act, enacted in 1986, created NVICP, which was implemented in 1988. The program was an attempt both to compensate the families of children adversely affected by government-mandated vaccines and to shore up the vaccine industry by attenuating liability risk through the imposition of a vaccine excise tax, to be paid into a dedicated trust fund (Public Health Service Act, 1987; 100 Stat. 3756, codified as Title XXI of the Public Health Service Act at 42 USC 300aa-1 et seq. [Supp. V

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--> 1987]; the Compensation Program is codified as Subtitle 2 of Title XXI, 42 USC 300aa-34). The excise tax was removed by the Secretary of the Treasury on January 1, 1993, when a bill unrelated to the NVICP but containing language that would have extended the tax, was vetoed by President Bush. The trust fund had a balance of about $620 million at the beginning of 1993. The NVICP was intended as an alternative, rather than exclusive, source of compensation. Petitioners were allowed to reject a given decision and request review of the case by the U.S. Claims Court; if not satisfied with the review, petitioners could appeal to the U.S. Court of Appeals. In order to be an effective alternative form of compensation, the NVICP was designed to work quickly and not involve itself with causation, one of the most costly and time-consuming components of tort action for personal injury (IOM, 1996). Outcomes As of 1993, there appeared to have been a drop in the number of vaccine-related lawsuits and increased activity in vaccine-related research and development (IOM, 1993). However, at the time, none of the companies that had dropped out of vaccine manufacturing in the 1970s and 1980s had returned, a situation that has since changed (Mercer Management Consulting, 1994). More recently, several foreign companies have expressed interest in the U.S. vaccine market, either by applying for Food and Drug Administration (FDA) licenses for their products or by creating alliances with companies and entities that currently hold U.S. product licenses (IOM, 1996). Issues In 1993, one analyst noted that the number of "retrospective cases" (for vaccinations prior to October 1, 1988) had been so voluminous that there were widespread doubts as to whether the funding levels were adequate to sustain the program (Garber, 1993). By August 1996, however, the Department of Health and Human Services (DHHS) had fully adjudicated over 75 percent of the pre-1988 claims backlog (Health Resources and Services Administration [HRSA], 1996). References Day K. Vaccine maker gets a shot in the arm. Washington Post, 11 March 1996. Garber S. Product Liability and the Economics of Pharmaceuticals and Medical Devices . Santa Barbara, CA: Rand Corporation, Institute for Civil Justice. 1993.

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--> Health Resources and Services Administration (HRSA). National Vaccine Injury Compensation Program: Summary of current issues. [online] http://www.hrsa.dhhs.gov/bhpr/vicp/sumcur.htm. 1996. IOM. Vaccine Supply and Innovation. Washington D.C.: National Academy Press. 1985. IOM. The Children's Vaccine Initiative: Achieving the Vision. VS Mitchell, NM Philipose, and JP Sanford, eds. Washington, D.C.: National Academy Press. 1993. IOM. Contraceptive Research and Development: Looking to the Future . PF Harrison, and A Rosenfield, eds. Washington, D.C.: National Academy Press. 1996. Mercer Management Consulting. Summary of UNICEF Study: A Commercial Perspective on Vaccine Supply. New York: Mercer Management Consulting. 1994. Cooperative Research and Development Agreements Background Cooperative Research and Development Agreements (CRADAs) are authorized under the Federal Technology Transfer Act (FTTA) of 1986 (PL 99-602). CRADAs allow the transfer of technology, knowledge, and expertise from government laboratories to the private sector for further development and commercialization. Under a CRADA, federal laboratories and private sector companies conduct research jointly and the collaborating company acquires patent rights at the outset of the collaboration. The FTTA provides for the sharing of royalties with government inventors from the licensing of products developed under CRADAs and from inventions made through an agency's intramural research programs (OTA, 1991). Under CRADAs, the government can offer the option of obtaining an exclusive license for inventions created in the course of research conducted under the agreement. "This provides incentives for companies to enter into collaborations that will expedite the commercialization of government inventions for the benefit of the public" (Fauci, 1996). Outcomes As of 1991, the National Institutes of Health (NIH) had roughly 150 CRADAs in effect and an additional 100 in various stages of negotiation (OTA, 1991). Currently, more than 2,000 CRADAs have been signed (Schacht, 1996). CRADAs have facilitated the discovery and development of a number of new drugs including taxol, didanosine (ddl), dideoxycytidine (ddc), trimetrexate, and fludarabine (IOM, 1994).

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--> Issues Consumer representatives and members of the U.S. Congress have criticized the private commercialization of government-sponsored inventions, arguing that the government should exercise control over the price of drugs the development of which has been supported by federal funds. This argument encouraged NIH to adopt a policy of adding a "reasonable pricing" clause into CRADAs, a matter which, together with the subject of drug pricing in general, remains hotly debated and politically controversial (IOM, 1994). "As the 104th Congress determines its science and technology policies, the role of the CRADAs may be debated within the context of initial indications of Republican preferences for government support of basic research and measures which do not involve direct federal funding for private sector technology development" (Schacht, 1996). Another related issue is that the CRADA process has been slow. Legislation has been introduced by Representative Morella (R-MD) and Senator Rockefeller (D-WV) that would revise the FTTA to include a requirement for automatic assignment of intellectual property rights to CRADA partners. This would expedite the CRADA approval process by guaranteeing industry partners exclusive field-of-use licenses (Allen, 1997). References Allen J. GOGO and GOCO Tech Transfer Policies. [Online] (http://www.nttc.edu/aftte/goco.html) 1997. Fauci A. Biomedical research in an era of unlimited aspirations and limited resources (Country profile, United States of America). Lancet 348 (9033):1002–1003, 1996. IOM. Government and Industry Collaboration in AIDS Drug Development (Workshop Summary). Washington, D.C.: National Academy Press. 1994. Office of Technology Assessment, U.S. Congress. Biotechnology in a Global Economy (OTA-BA-494). Washington, D.C.: U.S. Government Printing Office. 1991. Schacht W. Cooperative Research and Development Agreements. Congressional Research Report, Penny Hill Press. 1 May 1996. (Lexis-Nexis, allnws, CRADAs). Small Business Innovation Research Program Background The Small Business Innovation Research Program (SBIR) was enacted in 1982 as part of the Small Business Innovation Development Act (PL 97-219), which required the agencies of the Public Health Service and certain other

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--> federal agencies to reserve a specified amount of their research and development budget for SBIR programs. The program seeks to stimulate technological innovation, use small businesses to meet federal R&D needs, and increase private sector commercialization of innovations derived from federal research and development. The primary award mechanism to small businesses is a grant, but award mechanisms also include cooperative agreements or contracts. To be eligible for the SBIR program, a firm must qualify as a "small business concern" according to 13 CFR, Part 121. For qualification, a firm must be for-profit, independently owned and operated, not dominant in the field of operation in which it is proposing, have its principal place of business in the United States, be at least 51 percent owned by U.S. citizens or lawful permanent residents, and not employ over 500 people (Department of Health and Human Services [DHHS], 1993). Restrictions on rights to data developed under SBIR grants include a royalty-free license on all patent rights to the U.S. government for federal use. The government also reserves the right to require the patent holder to license rights in certain circumstances; otherwise, rights to data generally remain with the award recipient. The recipient may copyright and publish material developed under SBIR grants. Outcomes For the 1997 fiscal year, agencies with extramural research and development budgets over $100 million must reserve 2.5 percent thereof for SBIR grants under the terms of the program's authorization (Washington Fax, 29 January 1997). According to NIH officials, SBIR has been difficult to administer because much of its regulation comes from outside the jurisdiction of its government-wide funding agencies. Since the program was created by Congress, and is administered by the Small Business Administration (SBA), changes must be approved by the Small Business Committee. Issues At a recent conference held to assess the program, NIH presented examples of successful collaborations and participants expressed some of their frustrations. Comments centered on the quality of applications and reviews and general communication problems. The general perception is that applications submitted for SBIR grants are not of comparable quality with projects funded through other NIH extramural research funding mechanisms. To counter this perception NIH has been granted latitude to move SBIR projects around among institutes in order to fund only the best applications. The review process, lasting approximately 6 months, includes a peer review panel composed primarily of non-federal scientists reviewing for

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--> scientific and technical merit; applications are then reviewed by the National Advisory Council or Board of the awarding agency. Concerns regarding the review process focus on the various components of the application. Applications contain a commercialization portion as well as a research portion and, although review panels include representatives from small businesses, neither they, nor the scientists, may have a thorough understanding of commercial language or issues. This provided a window to a much larger, general concern, that of improving communications among applicants, academic scientists, and NIH administrators throughout the entire process. Many applicants have experienced a lack of enthusiasm about the program from several NIH institutes, centers, and divisions. The American Society for Cell Biology and the Joint Steering Committee for Public Policy have suggested assembling a committee to develop recommended guidelines. Others at the conference suggested some vehicle for ongoing communication about administrative problems for all who have a stake in the process outcome (Washington Fax, 29 January 1997). References Health Resources Services Administration (HRSA). Omnibus Solicitation of the Public Health Service for Small Business Innovation Research (SBIR) Grant and Cooperative Agreement Applications. Washington, D.C.: Department of Health and Human Services. 1993. IOM. The Children's Vaccine Initiative: Achieving the Vision. VS Mitchell, NM Philipose, and JP Sanford, eds. Washington, D.C.: National Academy Press. 1993. Washington Fax, Life Science. B Metheny, ed. Meeting on Small Business Innovation Research program disappoints. 28 January 1997. Washington Fax, Life Science. B Metheny, ed. Conference attendees voice problems with Small Business Research grants. 29 January 1997. Small Business Technology Transfer Background The Small Business Research and Development Enhancement Act of 1992 established the Small Business Technology Transfer Program (STTR) as a three-year pilot, modeled after the Small Business Innovation Research Program (SBIR). STTR activities began in FY94 and, as of September 1997, the program had been reauthorized by the U.S. House of Representatives to continue through FY 2000. Its purpose is to provide strong incentives for small companies and researchers at non-profit research institutions, contractor-operated federally-funded R&D centers, and universities, to work as a team to move ideas from the research phases

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--> into the marketplace. The program is competitive and proposals must be developed and executed cooperatively. Unlike SBIR, all STTR projects must include a research institution, which can provide up to 60 percent of the work. Under STTR's distinctive partnering concept, research can be initiated either by scientists in a small business or in a research institution. STTR grants, contracts, and agreements are divided into three phases. In Phase I, recipients conduct research to determine an idea's feasibility and merit. In Phase II, promising Phase I ideas are further developed. Phase III is the commercial or agency application of the idea. STTR funds the first and second phases; private or non-STTR funds are used for the third phase. The program is funded by a 0.15 percent set-aside from research agencies spending over $1 billion on research and development. Five agencies presently contribute to STTR: Department of Energy, Department of Defense, National Science Foundation, National Aeronautics and Space Agency, and National Institutes of Health. Outcomes In the first three years of the program, STTR awarded 784 grants totaling $115 million. The program is credited with increasing researcher productivity and decreasing costs in specific research areas; even projects that have not achieved commercialization have contributed to the base of scientific knowledge. A 1996 GAO report found participating agencies to be pleased with the proposals received. References Washington Fax, Life Sciences. B Metheny, ed. House passes small business technology transfer bill. 22 September 1997. Small Business Technology Transfer (STTR) [Online] (http://dticam.dtic.mil/sttr/sttr.html) 1997. Intellectual Property Rights/Patent Protection Background United States The primary goal of the United States patent system is to advance technological and economic development by stimulating innovation and investment. Once awarded, patent protection offers a 17-year right to exclude others from making, using, or selling the invention throughout the United States (35 USC 154), thus offering an incentive for inventors to invest time and money in research and development. The pharmaceutical industry enjoys a further benefit: When a patent claims that a human drug product has

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--> undergone regulatory review to be commercialized or marketed, it may be eligible for an extension of up to 5 years (OTA, 1991). Although a patent gives the inventor the right to exclude others from making, using, or selling the invention for 17 years, it does not grant the inventor any affirmative right to make or use an invention. Commercial use of a patented invention can be regulated by federal, state, or local law (OTA, 1991). The Bayh-Dole Act of 1980 lessened restrictions for non-profit institutions, including universities, to obtain patents and award exclusive licenses on government-supported research. (See also Bayh-Dole Act.) The Federal Technology Transfer Act of 1986 made it possible for private companies to obtain exclusive licenses on work done by government scientists. The Drug Price Competition and Patent Term Restoration Act of 1984 (PL 98-417) was enacted to restore part of the patent life lost during the regulatory approval process; it allows the extension of the patent term equal to the total time taken by the FDA to review the new drug application plus one-half of the clinical testing time, but not beyond 14 years of effective patent life (IOM, 1993). The act also modified the abbreviated new drug application process to make FDA approval possible for companies to market generic versions of drugs approved by the FDA since 1962 (IOM, 1993). International Most countries have inadequate systems of intellectual property rights protection. For U.S. companies, such limited protection does not create an incentive to invest in these countries or transfer particular types of technology (National Research Council [NRC], 1993). In contrast to the United States, in the international arena most countries require a patent owner to use or license a patented invention within a specified time period. A few international agreements do exist, providing limited protection for U.S. companies conducting business abroad. The Paris Convention for the Protection of Industrial Property provides two basic rights: 1) the principle of national treatment that allows nationals of any signatory nation to enjoy the advantages that each nation's laws grant to its own nationals in all other countries of the union, and 2) the right of priority that enables member country nationals to first file a patent application in any member country and, thereafter, to file an application for the same invention in any other member country within 12 months and receive the benefit of the original filing date (OTA, 1991). Subsequent agreements, including the Patent Cooperation Treaty and the Budapest Treaty, have sought to increase global harmonization of patenting procedures. Outcomes Legislative efforts to provide incentives have resulted in the negotiation of cooperative research and development agreements (CRADA) with private industry (Lancet, 1993). Although successful, a continuing problem has been

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--> References Belkin L. How breast cancer became this year's cause. New York Times Magazine , Section 6, 22 December 1996. Marshall E. The politics of breast cancer. Science 259:616-617, 29 January 1993. National Breast Cancer Coalition (NBCC), Home Page. [Online] (http://www.natlbcc.org:80/). HIV/AIDS Background Early awareness of the problem of HIV/AIDS encountered reluctance in the homosexual community to campaign actively on behalf of what was then termed "gay cancer," partly because of fears of evoking increased homophobia. Since 1981, activists have educated themselves in all areas of the knowledge base necessary for confrontation with the powerful government and industry "establishments" that offered the greatest probabilities of finding a cure for the disease. The ability of this advocacy group to gain access to the channels necessary to change policy and capture the attention of drug manufacturers is largely thought to be a result of its composition—primarily middle-class, well-educated, articulate individuals already organized by a unifying political agenda (Wachter, 1992). The solidity of its organization permitted the AIDS community to focus its message and precipitate change. The first tactic of AIDS activist groups was to expand access to experimental drugs by questioning the fundamental regulatory core of the drug development process and the system of increased regulation that had been developing since the 1962 thalidomide tragedy. Although that tragedy did not involve U.S.-based companies, after 1962 Congress expanded the role of the FDA, giving it more responsibility for policy decisions and requiring it to evaluate the efficacy as well as the safety of pharmaceutical products. While these regulations were implemented for the safety of the public, the societal price, according to many analysts, was a slowing of medical advances. After some substantial successes in modifying regulatory processes relevant to research and development of AIDS vaccines and therapies, AIDS activists continued to work on obtaining increased appropriations for AIDS research (Rothman and Edgar, 1991). Outcomes In response to activists, in 1987 the FDA issued regulations that allow treatment with investigational new drugs (INDs) before full approval of the

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--> drugs for marketing has been granted. In 1988, the FDA also modified its ban on importation of drugs to permit importation of AIDS-related therapies in small quantities for personal use. Activists have also led drug companies to lower prices and are partially responsible for pressuring Congress into allocating $1.7 billion a year for AIDS research (Rothman and Edgar, 1991). "The success of AIDS activists demonstrated that decisions about the allocation of resources—even in health care—are inherently political and thus amenable to effective lobbying" (Wachter, 1992). Issues There are fears that relaxation of drug access regulations, now requiring only that a drug show promising test results and no sign of major toxicity, may be excessive. Another concern is that modification of the drug importation ban makes the prospects of clinical trials much more difficult, since the potential combination of drugs makes true evaluation of efficacy impossible (Rothman and Edgar, 1991). As HIV/AIDS has increasingly affected a more diverse population, priorities have become more various and activists have been concerned that the resulting, less focused approach will be detrimental (Wachter, 1992). There are concerns that, because disease "popularity" drives funding allocations, a more actively promoted disease pulls funding away from less actively promoted diseases (Marshall, 1993)—in other words, a zero-sum game. Another issue revolves around the perception that treatment for HIV has taken precedence over vaccine development. Because activists have demanded treatment, industry, looking for profits, has responded with the development of drugs that are financially beyond the reach of most of the rest of the world. "From a public health point of view, the rational approach to AIDS would have been to develop a vaccine to prevent it from spreading to the masses rather than creating a chemical that might save a few" (Carr, 1996). The observation has been made that homosexual men in the developed world, who have tremendous influence in the AIDS lobby, may be doing disservice to the rest of the world by lobbying so effectively for "remedies only for the wealthy" and that AIDS may be the first viral disease for which drugs are developed before an effective vaccine, with the possible consequence that "no vaccine is ever developed" (Carr, 1996). These sentiments were echoed at the 11th International Conference on AIDS, where leaders in the global effort against AIDS voiced concerns that costly treatments for those already infected are diverting money and attention away from a vaccine that will prevent new infections (Knox, 1996).

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--> References Carr G. The profits and the losses of AIDS. The Economist, pp. 85–86, 13 July 1996. Knox R. AIDS vaccine research loses favor; at conference, a call to restart effort. Boston Globe, National/Foreign section, p. 2, 8 July 1996. Marshall E. The politics of breast cancer. Science 259:616–617, 1996. Rothman DJ, and H Edgar. AIDS, activism, and ethics. Hospital Practice 26(7):135–142, 1991. Wachter R. AIDS, activism, and the politics of health. New England Journal of Medicine 326(2): 128–133, 1992. Juvenile Diabetes Foundation Background The Juvenile Diabetes Foundation (JDF), founded in 1970 by the parents of children with diabetes, is a not-for-profit, voluntary health organization with U.S. chapters and international affiliated chapters worldwide (Australia, Brazil, Canada, Chile, France, Greece, India, Israel, Italy, Puerto Rico, and the United Kingdom). Parents' realization that the discovery of insulin was not a cure for diabetes prompted them to create a resource that would educate the world about the serious, life-threatening complications of this disease and promote the collaborations necessary to discover a cure. To accomplish this goal, JDF has focused on funding scientific research. The establishment of Diabetes Interdisciplinary Research Programs (DIRPs) beginning in 1992 has been one such commitment. Also referred to as "Programs of Excellence," these interdisciplinary research programs were created to bring together scientists from a variety of fields to work in collaboration with diabetes investigators and to combine their expertise. Over the last 27 years, the JDF has become the world's leading voluntary health agency funding diabetes research, awarding $31.3 million worldwide in 1996, bringing its cumulative commitment to research since 1970 to $211 million. JDF attributes much of its success to its grassroots volunteers. While the organization's public/private partnerships have been successful, the bulk of its funding has been raised by volunteers at the chapter and affiliate level. Volunteers have also been influential in persuading Congress to increase fiscal year 1997 funding to NIH, particularly to the National Institute of Diabetes and Digestive and Kidney Diseases (NIDDK). Special events, including golf tournaments, fashion shows, and a new planned giving program to generate income through bequests, trusts, life insurance policies, and real estate gifts, have all helped the JDF achieve its goals. Its "Only Remedy Is a Cure" campaign, launched in 1990, pioneered the concept of public/private funding partnerships, bringing together money from government to match private gifts

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--> from individuals, foundations, and corporations. The campaign exceeded its original goal of raising $100 million and now seeks to raise $200 million by the year 2000. Outcomes The JDF now collaborates with four of the National Institutes of Health, the U.S. Department of Veterans Affairs, and the Medical Research Councils of Canada and Australia. It has created programs that bring together leading diabetes researchers with scientists from many institutions and disciplines. With the addition of 12 new $5 million DIRPs in 1996 (double the number in 1995), there are now DIRPs operating in 26 academic health centers throughout the world. Over the last 25 years, the JDF has been influential in persuading the U.S. government to increase diabetes-related research allocations from $18 million to $300 million. Issues The Juvenile Diabetes Foundation believes that the federal government must increase its commitment to biomedical research funding and that reducing funding to NIH would be detrimental to the basic research necessary for a cure for the disease (JDF, 1996). References Clark W. Epic Research. 1997 Research Progress Report Countdown XVII (1), Winter 1997. Juvenile Diabetes Foundation (JDF). Annual Report 1995. New York, 1996. Juvenile Diabetes Foundation International (JDFI). Department of Finance and Administration Fact Sheet. 1996. JDFI. JDF's Diabetes Interdisciplinary Research Programs Fact Sheet . 1996. JDFI. Government Relations. Diabetes Demands a Cure. 1996. Organizational Mechanisms International Vaccine Institute Background The International Vaccine Institute (IVI) was initiated by the United Nations Development Program (UNDP) within the framework of the Children's Vaccine

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--> Initiative (CVI), a coalition of international and national agencies, national governments, nongovernmental organizations, and publicand private-sector vaccine companies. In 1992, a UNDP-sponsored feasibility study examined the availability of resources and policy commitment to sustain a new institute devoted to vaccine research and development and to promotion of technical cooperation. A site selection process followed, focusing on the Asia-Pacific region because of its expanding economic resources, rapid industrial growth, and progress in vaccine science. In 1994, Seoul, South Korea, was selected to house the IVI, at present the only international research center dedicated to vaccine research and development for the developing world. The institute will not produce vaccines but will work cooperatively with international organizations, national institutions, nongovernmental organizations, industry, and health and vaccine specialists to catalyze, facilitate, and stimulate new vaccine research and introduction by other concerned organizations (IVI Home Page, 1997). A major role of the institute will be to forge strong cooperative partnerships with the commercial sector to lower the high entry barrier that now exists for new vaccines and new vaccine formulations designed for public sector use (IVI Home Page, 1996/7). Outcomes Representatives of 12 member states of the United Nations and a representative for the World Health Organization (WHO) met on October 28, 1996, to sign the agreement to establish the IVI. The Establishment Agreement came into force on May 29, 1997. The institute has made substantial progress in establishing links with key centers around the world and appears to be building a solid basis for cooperation and collaboration with industry (IVI Newsletter, 1996). In January 1995, initial operation of the institute began with a core staff at interim offices at Seoul National University. The headquarters building is currently scheduled for completion around the end of 1999. The institute estimates a full-time staff of 200 with about 70 percent engaged in scientific research (IVI Home Page, 1996). Issues The IVI believes that collaboration with private industry is essential for putting new and improved vaccines into use in developing countries. It has identified Haemophilus influenzae B (Hib) vaccine as a first target area. In Asia there is some uncertainty about the extent and disease burden of Hib infection and there is low interest in Asian countries for Hib vaccines that have had such a dramatic impact in developed countries. The IVI is launching a multi-site, multi-country study to assess the disease burden of Hib infection. The project is being

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--> developed in close collaboration with the major manufacturers of Hib vaccines, including Merck and Lederle in the United States. The manufacturers will serve on a project management committee and have indicated their intention to provide technical and financial support. The goal of the project, if a significant disease burden is found, is to lay the groundwork for the introduction of Hib vaccines. The IVI believes that this project has the potential to provide significant benefit to Asian countries and to facilitate the efforts of industry to broaden their vaccine distribution. Of substantial importance to U.S. companies is respect for intellectual property rights, and there has been great interest in seeing what policies the IVI would adopt with respect to this matter. The IVI board of trustees has enunciated a policy of full respect for intellectual property rights. This policy includes provisions for the fair and equitable licensing of intellectual property rights that may come into the possession of the institute. Finally, the IVI has committed itself to a full review of intellectual property rights issues and to conducting the review in consultation with relevant U.S. government agencies such as the Departments of State and Commerce. References International Vaccine Institute (IVI). Newsletter 3, November 1996. IVI. Home Page. [Online] (http://www.dacom.co.kr/˜vaccines) 1996-1997. IVI. Under the Umbrella of the CVI. Brochure. 1996. International AIDS Vaccine Initiative (IAVI) Background The International AIDS Vaccine Initiative (IAVI) was established in 1996, with the mission of ensuring development of safe, effective HIV vaccines for worldwide use. The initiative is to accomplish its goals through three areas of activity: 1) advocacy for HIV/AIDS vaccine research and development; 2) support for a highly targeted applied vaccine development effort focused on gaps in current research and development; and 3) work with government, private industry, funders, and regulatory authorities to create a more favorable environment for increased investment. The IAVI will work collaboratively with developing country researchers, national programs, and international agencies to develop and test existing and future vaccines in developing countries, along with continued research and testing in industrialized countries. The IAVI also intends to increase existing scientific efforts in areas of applied research to determine the effectiveness of HIV/AIDS vaccines. It will not, itself, do research but, rather, will fund yearly those two to four key research and development projects that will best benefit HIV vaccine

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--> development. The IAVI will spend approximately $2 to $4 million in 1997 to accomplish its goals; the first grantees were identified in 1997 (Secretariat, 1996). In addition, the IAVI is searching for an experienced vaccinologist as a CEO. Once a person is on board, a series of activities will be developed in consultation with industry to improve the environment for commercial HIV vaccine development. This may include work on liability, creating a commercially viable market in the developing world, distribution issues for noncommercially viable markets, and other areas. Outcomes An active advocacy campaign has focused more attention on vaccines domestically and internationally. In addition, the IAVI has recently announced its first year's scientific plan which will include the funding of two primary scientific areas of emphasis: 1) development of HIV-DNA vaccines and 2) expanded safety studies of live-attenuated HIV. The organization is seeking partners to collaborate in preclinical trials with HIV-DNA vaccines and to address safety concerns and possible risks and benefits of pursuing human trials using a live-attenuated HIV vaccine. The IAVI is supported by the Rockefeller, Sloan and Until There's a Cure foundations, UNAIDS, the World Bank, and a variety of other donors. Issues The exploration that led to IAVI was started in 1993, at a time when vaccine research was at a nadir. Vaccines were the lowest funding priority in the public sector and little work was going on in the private sector. Over the last few years, there has been an increase in interest in vaccines, including more activity in the public and private sectors. In the United States, however, the bulk of public funding has been allocated toward the basic sciences. IAVI applauds this work and the IAVI intends to complement this funding by addressing what it perceives as a funding deficit in the area of applied science. The organization is also concerned about the fact that almost all experimental HIV vaccines have been based on the single genetic subtype most prevalent in the United States and Europe. While the significance of genetic subtypes in vaccines remains unknown, it seems pragmatic to test vaccines based on subtypes more prevalent in the developing world, which have not received adequate attention. A further concern has to do with the increasing complexity of intellectual property rights (IPR). For example, production of the new, genetically engineered hepatitis B vaccine requires 14 patents, generating costs that are reflected in the vaccine's pricing. In an effort to develop vaccines that will be accessible to everyone, the IAVI convened a meeting in August 1996 to discuss IPR issues. The recommendation from the meeting was that the

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--> IAVI should work to protect the intellectual property rights of research it funds, thus facilitating access to other patents and providing incentives for industry to work with the IAVI in development and distribution of an HIV vaccine. The goal would be to make vaccines available to those living in extreme poverty where adequate commercial markets just do not naturally exist. The pivotal question is how to accomplish that (Nelson/IAVI, 1997). Industry's reluctance to invest in HIV vaccines is derived from pessimism about whether vaccines would work, as well as a from general ''lack of good ideas"; however, with the advent of DNA vaccines, companies are now more likely to get involved (Plotkin/IAVI, 1996). References Bhamarapravati N. Studying AIDS vaccines in Thailand: An Interview with Nath Bhamarapravati. IAVI Report 2(1): 4–5, Winter 1997. Nelson L. IAVI Issues—Report on Intellectual Property Rights. IAVI Report 2(1):7, Winter 1997. Plotkin S. Industry Perspective: An Interview with Dr. Stanley Plotkin. IAVI Report 1(1):6–7, 12, Summer 1996. Secretariat (ad interim). International Vaccine Initiative—Scientific Areas of Emphasis. 1996. Inter-Company Collaboration for Aids Drug Development Background In April 1993, 15 pharmaceutical companies agreed to collaborate to facilitate—through the sharing of information and drug supplies—the conduct of early combination and comparative studies of antiviral agents for the treatment of HIV infection and AIDS. Those companies formed the "Inter-Company Collaboration for AIDS Drug Development," with the purpose of better enabling each of them to independently evaluate new antiviral investigational drugs for potential clinical benefit, either alone or in combination with marketed or investigational drugs of other companies. By sharing relevant preclinical and clinical data (including negative data on antiviral compounds that have failed in drug development), facilitating access to investigational drug supplies, and developing standardized preclinical assays and procedures and other activities, the companies hope to accelerate the development of promising new drugs and identify combinations of antiviral drugs that will significantly advance the treatment of HIV infection.

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--> Outcomes Eighteen companies now participate in the Collaboration: Agouron, AB Astra, Aji Pharma USA, Bayer, Boehringer-Ingelheim, Bristol-Myers Squibb, Ciba-Geigy, DuPont Merck, Gilead Sciences, Glaxo Wellcome, Hoechst AG, Hoffmann-La Roche, Merck, Pfizer, Pharmacia & Upjohn, Sigma-Tau, SmithKline Beecham, and Triangle Pharmaceuticals. The Board of Participants, comprised of R&D heads of the member companies, was established in July 1993 and is the general oversight body responsible for the implementation of the Principles Governing the Collaboration. Operating expenses are shared equally among member companies. The Board of Participants met several times in 1993, 1994, 1995, and 1996. Several standing committees reporting to the Board were appointed, including the Scientific Panel, Legal Committee, Communications Committee, Nominations Committee (to review new membership applications), and liaison committees (to facilitate various sorts of exchange among the concerned communities). The objectives of the Scientific Panel are to facilitate: 1) exchange of scientific information; 2) sharing of animal model technology for antiviral research; 3) provision of compounds and the conduct of combination trials; and 4) virological assay validation and method standardization. The Scientific Panel met with the Board of Participants several times in 1993, 1994, 1995 and 1996. In the course of those meetings, scientific disclosures on different antiviral programs were made by Hoffmann-La Roche (saquinavir; TAT antagonist), Bristol-Myers Squibb (d4T), Merck (protease inhibitor indinavir and non-nucleoside reverse transcriptase inhibitor L-697,661), Glaxo Wellcome (3TC™; protease inhibitor VX-478; nucleoside reverse transcriptase inhibitors 935U83 and 1592U89), Astra Foscavir®), Boehringer-Ingelheim (nevirapine), Hoechst (pentoxifylline), Eli Lilly (former Collaboration member) (non-nucleoside reverse transcriptase inhibitor LY 60046), Aji Pharma USA (lentinan, curdlan sulfate), and Hoechst and Bayer (non-nucleoside reverse transcriptase inhibitor HBY097). The Scientific Panel also appointed a Virology Subcommittee, to standardize and validate assay procedures and methodologies, develop a database of HIV antiviral drug resistance, and facilitate exchange of biological data and viral constructs among member companies for resistance/cross-resistance testing. The Virology Subcommittee quickly established a standard protocol for measurement of in vitro antiviral activity, using consensus cell system, virus strain, and a number of standard reagents. The Subcommittee is developing standardized cytotoxicity and primary isolate susceptibility protocols, as well as a database of HIV antiviral resistance. The Scientific Panel also appointed a Clinical Trial Subcommittee with the primary objective of developing a consensus protocol for clinical evaluation of multi-drug combinations of antiviral agents, both investigational and marketed.

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--> The committee produced a master protocol, identified the first three-drug combinations for clinical evaluation, and recommended two contract research organizations, one to implement and monitor the evaluation, the other to implement and monitor the initial studies. Enrollment for the first study, ICC Protocol 001, which evaluates combinations of AZT/ddC/nevirapine and AZT/ddC/saquinavir with AZT/ddC as the control arm, was completed in June 1995. The second study, ICC Protocol 002, started in September 1995 and will evaluate combinations of AZT/ddI/nevirapine and AZT/ddI/3TC, with AZT/ddI as the control arm. Additional studies of triple-combination antiviral drug regimens are under development. Regional System for Vaccines/Sistema Regional Para Vacunas Background The Regional System for Vaccines/Sistema Regional para Vacunas (SIREVA) was developed within the framework of the Pan American Health Organization (PAHO) in 1993. SIREVA is an international programming, administrative, and coordinating initiative to improve the quality, effectiveness, and cost of vaccines by working to coordinate all stages and participants involved in vaccine development and production for the people of Latin America and the Caribbean. The need for such a focus emerged from the realization that the costs of many newly developed vaccines were going to be prohibitive for the countries of this region. Technical cooperation among those countries will make it possible for them to produce the new vaccines needed (PAHO/World Health Organization [WHO], 1994). Cooperative efforts are under way with PAHO's Special Program for Vaccines and Immunization (SVI) to accelerate research, development, production, and quality control measures of vaccines. SIREVA proposes to take advantage of a number of centers throughout Latin America and, through coordinated action, develop the necessary knowledge, scientific, and technological capacity and means to develop, produce, and maintain quality control of immunizing agents to combat diseases relevant to Latin America and the Caribbean (Wittenberg, 1994). Outcomes Over the years, SIREVA has received support from the Government of Mexico, the Rockefeller Foundation, the Inter-American Development Bank, the World Bank, the United Nations Children's Fund (UNICEF), the United Nations Development Program (UNDP), and the International Development Research Center (IDRC/Canada). SIREVA is working on a regional network of quality control laboratories to start quality control training programs, and is working as well on a program for providing centralized certification

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--> mechanisms for diptheria-tetanus-pertussis (DTP) producers in the region. The promotion of research on vaccines of regional interest also heads the SIREVA agenda (CVI, 1996) and the organization has developed a master plan for each currently investigated vaccine that will serve to coordinate implementation of several phases of vaccine development (EPI, 1995). References CVI Forum. Special Vaccine Industry Issue (11). Geneva: World Health Organization, 1996. EPI Newsletter. Ensuring the Production of Vaccines in the Region. XVII:6, December 1995. Pan American Health Organization (PAHO). Regional System for Vaccines for Latin America and the Caribbean (SIREVA). Washington, D.C.: PAHO/WHO. 1994. Wittenberg R. Testimony of Richard L. Wittenberg, President and Chief Executive, American Association for World Health, Before the Subcommittee on Foreign Operations Export Financing and Related Programs, Committee on Appropriations, U.S. House of Representatives, Washington, D.C.: Federal Document Clearing House. 1994.