Somalia famine revives debate: is it acceptable to patent aid?

In Providence, R.I., a small factory is running 21 hours a day, six days a week, to meet the intense demand for Plumpy'nut, a candylike paste that has been heralded as a game changer for treating the kind of severe malnutrition racking Somalia and other drought-stricken areas.

But even with Edesia's expanded hours, churning out what is essentially peanut butter pumped full of nutrients, there isn't enough Plumpy'nut – or its generic equivalents, known collectively as ready-to-use therapeutic foods (RUTFs) – to meet the demand in East Africa, let alone help feed the estimated 20 million children worldwide who are extremely malnourished.

The reason: Plumpy'nut, the original RUTF, is patented. That patent bars operators in North America and most of Europe from large-scale production of RUTFs that could drive down the price. Companies in developing countries, meanwhile, are allowed to produce Plumpy'nut but can't yet make it cheaply or in large quantities.

That tension has spurred a vociferous debate: How can the need for affordable humanitarian relief be balanced with a profit motive that spurs innovation – and a business model that promotes industry in developing countries – but stymies more efficient production?

"It doesn't matter if people are priced out of the market for an iPad," says Owen Barder, a senior fellow and director for Europe at the Center for Global Development. "But it's not at all fine when it's a vaccine or Plumpy'nut."

A new model for malnutrition care

The Plumpy'nut formula is simple: peanuts, sugar, milk-based proteins, vegetable oil, and a mix of vitamins and micronutrients. Each serving comes in a foil packet. It needs no refrigeration and is ready to eat.

With three daily packets of Plum­py'nut, the recommended regimen, a child can make enormous strides in just a few weeks, says Stéphane Doyon, the nutritional team leader at Doctors Without Borders (MSF).

What makes RUTFs truly transformative for aid organizations is the way they changed the model of care for malnutrition, allowing for treatment at home. Children and their mothers no longer have to remain in hospitals for weeks at a time, which can pose a health threat and strain staff resources, Mr. Doyon says.

Shifting to RUTFs also eases demands on staff in the field. In 2002, MSF needed 2,000 staff to treat 8,000 children. In 2004, MSF's first time using the paste on a large scale, it treated 10,000 kids with only 120 staff. In 2005, it treated 40,000 children.

The patent that protects Plum­py'nut and three similar products is owned by the French company Nutriset. The company sharply restricts patent licensing in industrialized countries, but readily licenses companies in the developing world, providing them with the technology and training they need to produce it. Nutriset sees its patent as "a tool to promote development" and to increase "nutritional autonomy." Generics cannot be made in or shipped into countries with local producers of Plumpy'nut.

Nutriset says that by restricting licensing in industrialized countries that can manufacture its products inexpensively on a massive scale, it is protecting local producers in places like Malawi and Niger, where a lack of infrastructure limits the scale of production. That makes Plumpy'nut 10 to 15 percent more expensive there, according to UNICEF. Without the patent, European and American producers could flood local markets with cheaper products, driving domestic producers out of business.

Local production eases poverty

A benefit of local production, says Maria Kasparian, director of operations for Edesia, the only US Nutri­set franchise, is that it creates jobs and a market for local agricultural products, chipping away at malnutrition's contributing factors, such as poverty.

It's an uncommon defense for a patent, Mr. Barder of the Center for Global Development says. Typically, companies argue that a patent is needed to recoup investment in research and development and is justified, because if people know they will make up their costs, they will be more motivated to innovate.

But the trouble with Nutriset's argument for its patent is twofold, Barder says: Supporting local development, while a worthy long-term goal, should not take precedence over responding quickly to life-threatening situations like the famine in Somalia. In this case, he says, that means importing RUTFs from the industrialized world.

Barder also takes issue with Nutriset's use of a patent to promote an economic development "ideology." If developing countries are ser­ious about supporting local producers, they can opt not to import Nutriset's products, he says. Where RUTFs can be made and sold is not a decision for Nutriset to make.

Nutriset says that the limitations are temporary and that it will be less protective as local production expands and costs go down.

If that's the case, there's an easy solution for covering initial costs – a loan, says Barder: "Many companies make a loss at the beginning. You don't need a patent for that."

'The patent is definitely a barrier'

MSF has also been a vocal opponent of Nutriset's patent. Doyon insists that the company's control of the market has limited production and supply of RUTFs. He points to the way licensed producers are scrambling to fill the orders flooding in and the fact that Nutriset has temporarily relaxed its patent restriction in Kenya, where there is already a local producer. "It's good that they make this kind of gesture," Doyon says, but "the patent is definitely a barrier. Otherwise you wouldn't need to remove it."

Shanelle Hall, UNICEF's supply division director, says that Nutriset has readily granted exceptions whenever the need has arisen. Should Nutriset ever stand in the way, UNICEF has what Ms. Hall calls a "release valve" – the Agreement on Trade-Related Aspects of Intellectual Property.

The agreement allows governments to grant licenses or to import generics without the patent owner's consent in emergency situations.

According to Adeline Lescanne, the deputy general manager for Nutriset, the French factory produced 30,000 metric tons of Plumpy'nut and Nutriset's other nutritional supplements in 2010, compared with 1,700 in the United States and 6,500 from all the factories making Nutriset's products in the developing world combined.

But Edesia's Ms. Kasparian says the number of producers is secondary. The major barrier is funding, which she says is consistently too low – only enough for 5 to 10 percent of the children in need. Even if more firms produced more Plumpy'nut, aid groups currently don't have the money to buy more. Only if funding expands drastically, she says, "will the patent become immoral and need to change."

Easing the tension between the profit motive that spurs innovation and the need to keep humanitarian products cheap is possible, says Barder, who has researched this dilemma in the vaccine world. One way is an "advance market commitment," in which a sponsor promises to buy a set amount of vaccine, say, at a high price and sell it at a lower one, absorbing the difference. In turn, the vaccine company pledges to provide further vaccines at a lower price for a set period. Another idea is a cash prize that acts like a grant.

But the best solution is probably better anticipation of food crises and the marshaling of resources in advance to better address them.