The UNITAID, in association with the Clinton Foundation HIV/Initiative and Medicines Sans Frontiers (MSF), has proposed the formation of a patent pool of HIV/AIDS drugs as a means of reducing the price to ensure greater access to these drugs, especially in developing and least developed nations. According to a news report, the proposal seeks to create a pool of patented anti-retroviral drugs, where proprietors of such patents would license them to the pool for a payment of a license fee. The generic drug manufacturers would use licencing to work the pooled patents on payment of a royalty.

The pool would function as a conduit to permit wide dissemination of the license to work a particular patent and considering the wide amplitude offered, could potentially reduce the price of the patented drug. In essence, the logic of the patent pool is that by permitting a number of generic drug manufacturers to work the patent, on the contribution of a predetermined fee, the proprietor would be able to recover the cost of development of the patent, along with the attendant profit, from the aggregate contribution of the generic manufacturers to the patent pool.

In functioning as a conduit, the patent pool is reported to be designed to work as a one-stop shop licensing agency that would manage licenses, negotiations as well as receipt and payment of royalties, thereby dispensing with the necessity of such process between the proprietor and each generic drug manufacturer. The formulation of this patent pool would benefit the Indian Pharmaceutical Industry in particular due to the number of Indian drug manufacturers that actively and extensively engage in the production of generic drugs. The high cost of HIV/AIDS drugs has always been a contentious issue. The generic drug companies have to wait for the patent to expire before they can begin manufacturing cheaper versions. Thus, through the pool, the potential benefits for manufacturers such as Ranbaxy, Cipla, Natco, Hetero Drugs, Strides Arcolab and Aurobindo is startling.

The move is slated to improve access to medicines, which is also the premise of Indian patent law. Post amendment in 2005, compulsory licencing provisions have been invoked to effectuate this mandate. Patent pools are another way to provide such access, particularly, when the Indian companies have the ability to supply reverse-engineered versions at $150-$300 per patient, per year, when the original cost ranges between $600 and $1,000 per patient, per year.