Erik Iverson Interview Part 2: Patents for Humanity

Erik Iverson

On August 2, 2012, I spoke on the record with Erik Iverson, Executive Vice President for Business Development & External Affairs at the Infectious Disease Research Institute. In part 1 of the interview we caught up with Erik’s move from the Bill & Melinda Gates Foundation to IDRI.  He is still engaged in humanitarian efforts, but he described IDRI as more of an “intentionally not for profit” biotech research and development company.  We discussed the work IDRI is doing and how he is able to get large pharmaceutical companies to work with a 501(c)(3) entity that has as its primary mission humanitarian efforts in the global health sector.

In part 2, which is the final segment of the interview, we discuss the Obama Administration efforts to challenge the innovative community to put patents to work for humanitarian efforts.  This project is called Patents for Humanity.  Iverson and I discuss the project and whether it is likely to be successful, as well as the risk it runs of defining only one path to acceptably use patents for what the government views as humanitarian relief.  For more on Patents for Humanity please see On Patents Aiding Humanity and Patents for Humanity Announced at White House Event.

Without further ado, we pick up right where we left off.

[Bio-Pharma]

QUINN: It seems like you’re also trying to figure out in ways the same types of things that start ups are trying to figure out when they’re wondering how can they attract angel and then venture funding.

IVERSON: No, I don’t think that’s—

QUINN: I mean, I know you’re not trying to raise the money as such, but it’s probably the same kind of thought process of how do I get somebody to be interested and excited in this?

IVERSON: No, I don’t think it’s that.  I think it’s—in other words, the venture folks are not looking to get products into the developing countries or the emerging markets.  But big industry is because that’s the next frontier or the current frontier they’re beginning to figure out how to get into, right?  And so even with the biotechs, they are beginning to realize is that if you can design a product and you position yourself from an intellectual property perspective for the emerging markets your end valuation will be much higher because you’ll be more attractive to the multinational players who need products to take into those marketplaces.  And so really what we’re doing is we’re trying to take a strategy, and I guess it comes back full circle to an earlier comment of bypassing the biotech sector, but we’re developing a strategy of not how do we become attractive to kind of a community of venture funders, but how do we become attractive, not “us” as an organization, but our products, to the big multinational pharmaceutical and vaccine companies because they’re the ones who ultimately have to pick this up.

QUINN: And they’re ultimately the ones that if they’re gong to continue to expand their global footprint have to open up new markets.

IVERSON: And they are.  Absolutely they are.  And a large amount of resources are going into building development centers as well as their commercial and marketing, commercialization groups into those emerging markets.  And they need products to fill those pipelines.  And certainly they can fill them with their customary products.  Their oncology and heart disease products, et cetera.  But there’s a significant markets out there for infectious diseases as well.

QUINN: Yeah.  Okay, that makes a lot more sense to me.  Now, I know when the Obama Administration announced the Patents for Humanity program, you were at the White House, right?

IVERSON: Correct.

QUINN: How does this program they’re pursuing sort of work together with what you guys are doing on your own or do you think it encourages people to become more aware that these technologies can and maybe really should be used for humanitarian purposes wherever possible?  What are your thoughts on the program just generally?

IVERSON: Well, there are two baskets of thought, consideration, concern, benefit.  And on one hand which I’m not really going to get into because I’m not a patent attorney, one could look at this at the program and say it’s really going to stretch the resources of the patent office. Are they really going to be able to, or what does it mean for them to take these humanitarian approaches and accelerate certain reviews or patent applications or appeals ahead of everybody else in the queue’s already stretched and the whole system is stressed in some regard.  Not to mention just the allocation of resources to respond to this program.  We could spend a long time mulling over the issues there.  But on the other hand, the second basket is really more the conceptual one.  And what are the real benefits from a larger community perspective that come out of this program?  My response to that is I’m not sure exactly how they’re going to define winners or losers in the application process.  That is, just because a company is applying a technology into an emerging market or developing country, what becomes humanitarian and what just is simply commercializing in a market?  And what are the metrics that are going to be used? It seems to me that they’re going to be using academics as judges.  And, of course, academics are very smart from a technical perspective, but they don’t have the expertise for commercialization to understand exactly the impact within the given markets.  And so there is a bit of a question as to how  this is all going to get played out.  And what gets defined in the process.  That’s a question I’m holding at bay.  It’s not necessarily a concern as much as just something I’m going to be keenly interested in watching.

QUINN: Yes, I’m interested to see how this plays out, what kind of technologies that they get and select and I think it will be interesting, too, to just see what technologies companies are using in a humanitarian way, one way or another.  And maybe it will encourage other companies to become creative as well as they start to learn how others are using some of their technologies for good.

IVERSON: Yeah, you’re precisely right.  And I was going to mention that point as well.  And so we’re thinking the same.  Which is of great benefit and I think it will be greatest benefit, with a caveat.  But the greatest benefit is to learn lessons of what other people are doing and it is a regular response that the folks at the Gates Foundation receive.  Which is: how do we contribute to humanitarian approaches to things?  As long as there’s a commercial route to do it, how do we really do this?  And having this as a source of examples I think will be absolutely invaluable.  Truly invaluable.  And that strikes me as the greatest benefit of this.   And to show the world really that companies can make a go of it commercially but be altruistic at the same time.  And showing these examples in the form of these applications.  Now the question: is are all these applications to be made public?  Or how do we access those?  Because if in fact they’re all confidential and the judges make selections and nobody really sees what’s a winner or what’s a loser because those that aren’t chosen,we don’t learn much. It would be interesting to see the losing applications as well, quite frankly, to understand why.  Some of them may seem quite humanitarian in approach, but what’s the rationale being played out by these set of judges that would say something isn’t sufficiently  humanitarian.  And therein lies the caveat: just like the Gates Foundation’s largesse, essentially de facto created definition of what global health is, this also tempts the idea that this system will, in part, define what it means to be humanitarian.  And that’s a real risk.

QUINN: I see where you’re going with that.  And the only analogy that I have is this, although it’s not initially substantially related – back when I became an attorney in New Hampshire, the definition of pro bono activity meant representing somebody in a divorce proceeding.  That was the only way you could get any kind of gold star for doing pro bono activity from the New Hampshire Bar Association.  And I wrote on op ed article in the New Hampshire Bar News saying, look, I don’t know the first thing about divorce.  I’ve tried to handle a couple of these cases and I can get the paperwork into the judge, but then I just sit there while the judge does all the work questioning the client, etc. I suppose that’s beneficial because at least the paperwork is in order, but why can’t we do pro bono stuff in an area where we know something about. At that point in time, because of a big client that needed help, I learned landlord tenant law in New  Hampshire.  So then I started doing some pro bono work there.  So I completely understand what you’re saying.  We want to make sure that this doesn’t define the only route to be considered doing humanitarian or good work in this space.

IVERSON: That’s a great analogy.  And it challenges my presumption of risk.  And that was what I was saying: that this humanity approach might do is actually limit or narrow the definition of what people perceive as humanitarian.  What you just described though is something entirely different.  That is the practitioners said no, there’s a whole area of pro bono activity that extends well beyond divorce law.  And in fact it’s almost infinite depending on the nature of practices. Well, that very well could be the case of the Patents for Humanity.  That is people are currently thinking about what’s humanitarian, but because they’re going to have 50 awards given in a 12 month period, it could very well expand the scope of what people otherwise have ever thought about as humanitarian.  So quite frankly you’re challenging my thinking that in fact is a risk.

QUINN: Well, it could be a risk initially, but I think if we’re watching then we’re engaged.  And I can’t say I take credit for this, but I do know that right after this all started happening, New Hampshire did open up a pro bono section that dealt with landlord tenant issues.  And now today I believe they also have a pro bono section that helps people in bankruptcy and so on an so forth.  Because my argument was at the time that I’m committing malpractice in every pro bono divorce case I handled.  Now, I understand I’m helping the court, but I’m not feeling comfortable doing this.  Why can’t I do some good doing stuff that I actually feel comfortable doing from a competency standpoint?  So I do think as long as we all stay engaged – and I know you’re engaged, I’m in engaged, Director Kappos and the Obama Administration are engaged – maybe this will become a roadmap for how people can do these type of humanitarian things.

Would you agree with me when I say it’s not at all intuitive how a for profit company with shareholder concerns could engage in these type of humanitarian activities?

IVERSON: That’s a correct statement.  In other words, it depends on how humanitarian you want to be.

QUINN: Right.  What we were just talking about in terms of these companies, they want to get access to these drugs that are more developed and vaccines that are more developed so it’s less risk for them and it gives them opportunities to open up markets that they will want to open up down the road and create those relationships with those governments and the people, and so on and so forth. So if they can do it in a way that is cost neutral or even they make a little money rather than a lot of money, it’s a win/win for everybody it seems.  But that isn’t always the way you think about using your patents.

IVERSON: That’s right.  And inevitably there will be people who will say thatthe only way to be humanitarian is to release your patent rights altogether.  And there will be others who say the patent system is there to create incentives that will ultimately create an economic engine within these countries that don’t otherwise have those engines.  Totally different sides of the spectrum.   And people will also say, jeeze, you know, unless you make your products available for free, it’s not humanitarian because if you’re charging a dollar these people can’t afford it and other people will say jeeze, as long as you have the products on the market, it’s creating a healthier society in that geography even if it tends to be the middle class or upper middle class folks.  And, I don’t think there’s any right answer on that.  It’s just something that to your point I think it just needs to play out.  Inevitably you’re going to have people on both sides of those coins as this plays out.

QUINN: From my perspective the people who say that you have to give up your patent rights or you have to give this stuff away for free.  I mean that is just – it’s Pollyannaish.  It’s naive, and it shows a complete lack of understanding.  I mean, how much good can you do if you go bankrupt? If you’re giving everything away at some point in time you’re cutting into the bottom line and you’re diverting resources and you’re diverting attention – you’re going to wither.  You can’t give everything away and then still have more to give.  But if you can figure out how to do this in a way that makes sense for you and is sustainable for you and that is altruistic to a certain extent, I think it’s clear that you can do a lot more good in the long run.

IVERSON: For a guy who has dedicated the past decade in global health at the world’s largest philanthropy and now at a very slimly funded but growing product development organization in the interest of global health, I agree 100% with that statement.  Patents are absolutely necessary in order for us to achieve our goals.  But it’s how you manage the patents that are critically important.

QUINN: Now maybe you can comment on this, maybe you can’t, because I suspect there’s probably no generalization that you can make.  But when you talk about getting creative, you’re talking about whatever really needs to get done in order to achieve the ultimate end goal, right?

IVERSON: Yes.

QUINN: Is there a for instance or for example that you maybe can throw out there to maybe put some meat on those bones a little bit?  And if not, that’s fine.  Because I know each deal is different, right?  I mean, you have patent rights, you have different markets, you have advancements in technology versus a whole brand new technology and different partners and concerns.

IVERSON: Yeah, that’s right.  We could spend a whole ‘nother hour talking about examples in any given marketplace, not just the marketplace but the nature of the product,—in life sciences, whether it’s a diagnostic or a vaccine or drug or a related technology, or a manufacturing process.  And you could just rattle it on and on and on depending on what sector you’re playing in.  So your strategies as to how you want to approach these things are going to differ, sometimes dramatically, but not entirely.  But I think that’s also where that comes back to what the great benefit I think of the Patents for Humanity approach will be. It’s going to highlight some of those examples.  And provide lessons on not just how to be humanitarian, but how organizations are actually getting into these marketplaces with their innovations.

QUINN: Well, maybe we can wrap it up with this last thought.  Where do you see this humanitarian effort and use of innovations and technology a year from now, maybe five years from now, maybe ten years from now?  Where are we going?

IVERSON: Well, I think there is the “realities of resources” constraints.  And I think if those can be addressed, that there is going to be criticism about the patent office’s ability to allocate their resources appropriately and in a way that’s rational.  So that’s one set of issues.  I don’t want to belittle that because I think it is an important set of issues.  But where this is, where I hope this winds up going, is that those resource allocation issues in the patent office and how it attends to the matters of industry in general are resolved. This will trend towards, I hope, a recognition that the world markets are expanding and the need for innovation in various countries is absolutely necessary.  And innovation will both provide a lot to the bottom line of a company, but also do a great deal of good for humanity.  And it will provide a whole lot of examples as to how companies might do that and to show the capital markets that in fact it provides a pretty good return and it’s worth the investment.

QUINN: And on that note I really appreciate you taking the time to chat with me on the record about this stuff.  It’s fun stuff.  Hopefully in another year or so we can check in and see what you’re doing and what you’re working on and how it’s playing out and then maybe we’ll have an opportunity to know what patents were selected or innovations were selected as part of Patents for Humanity and we can chat about that.  But thanks a lot, Erik.

IVERSON: I think I would be a lot of fun to revisit this and see how it’s playing out.  And certainly it’s my pleasure to give you my thoughts.  And I look forward to an engaged dialog with the community in general as to how this plays out.

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One comment so far.

  • [Avatar for David]
    David
    August 25, 2012 06:48 pm

    In short, the economic incentives are not in place for this program to survive, unless these “select accelerations” being offered are sufficient. But humanitarianism (philanthropy) is done out of concern for humanity, not for the profit line; even best if there is no profit line. That’s where the reward system suggested by Nobel Laureate Joseph Stiglitz is something to consider here, rather than these types of machinations to pay obeisance to the gods of patent law.

    Or better yet, inculcate in CEOs the moral and ethical fiber that Ben Franklin had. Despite his myriad inventions, he patented not a one. And he retired early.

    I’m not sure why Iverson seems to think the multinationals are all that necessary. Sure they have infrastructure, but the incentive for corporations will always be profits, not human welfare, that’s the purpose of a corporation. That’s OK, but it’s not going to help Iverson.