Pharma narrowly defines when compulsory licenses should be used

The gathering in Washington D.C., is a prelude to the annual 301 Watch List, in which the US Trade Rep identifies and ranks countries based on their willingness to protect intellectual property. The annual list is of great concern to drug makers, which argue that some countries fail to sufficiently protect and enforce patent rights. As a result, they complain that revenues are hurt and innovation is discouraged.

The issue has figured prominently in various trade talks, including the Trans-Pacific Partnership, as the pharmaceutical industry has lobbied the White House and Congress to take up its cause. But drug makers have encountered push back from some countries and patient advocacy groups, which say some efforts to enforce patent rights may come at the expense of patients who cannot afford medicines.

In particular, compulsory licenses are a flashpoint. Countries may grant such licenses to a generic drug maker, allowing it to copy a patented medicine without the consent of the drug maker that owns the patent. This right was memorialized in a World Trade Organization agreement known as Trade-Related Aspects of Intellectual Property Rights, or TRIPS.

However, in a document submitted recently to the U.S. Trade Rep about the upcoming 301 Watch List process, the Pharmaceutical Research & Manufacturers of America appears to take a more narrow view of the rationale for issuing licenses. The trade group writes that a compulsory license should be “granted only when there is a true health emergency and as a measure of last resort” (see page 109).

However, a WHO primer on the topic notes that a health emergency is “not necessarily” required for a license to be issued. “This is a common misunderstanding,” the WHO writes. “The TRIPS agreement does not specifically list the reasons that might be used to justify compulsory licensing. However, [a 2001 declaration] confirms that countries are free to determine the grounds for granting” licenses.

One patient advocate argues that the trade group is deliberately attempting to greatly restrict the use of compulsory licenses. “But what PhRMA wishes for and what the rules are – that’s two different things,” says Jamie Love of Knowledge Ecology International, a non-profit group that tracks patents and access to medicines issues.

“The WTO and the U.S. Free Trade agreements provide much more flexibility and for good reason. There are all sorts of reasons to limit the monopoly power that comes with a patent, and cases involving emergency are only one. Can a government use compulsory licenses to curb excessive drug prices? Yes. And with the U.S. now facing an aging population and runaway prices, we will have to begin to use compulsory licensing, or the threat, to curb those prices here, too.”

For its part, PhRMA dismissed the argument. A spokeswoman writes us that the trade group “believes that use of compulsory licenses to expropriate patent rights is a limited exception under TRIPS and, as a matter of policy, should only be used in exigent circumstances, such as health emergencies, when all other alternatives have been exhausted.

“Assessments of particular compulsory licensing policies and decisions need to be made on a case-by-case basis, taking into account a number of factors. We strongly oppose the regular use of compulsory licenses, for example, to support industrial policy objectives aimed at favoring domestic industries or a routine cost-containment measure.”

Thailand issued licenses several years ago and, more recently, India did so, as well. However, global drug makers believe the Indian government is willing to consider issuing licenses as a way to bolster its own generic drug makers as much as widen access to medicines. Consequently, the Indian government is under pressure from Washington to alter its approach to intellectual property protection.

Source: Pharmalot