Evaluating the Usefulness of Compulsory Licensing in Developing Countries: A Comparative Study of Thai and Brazilian Experiences Regarding Access to Aids Treatments

Compulsory Licensing of Pharmaceuticals in High-Income Countries: A Comparative Analysis

Policy Points Pharmaceutical trade organizations and media outlets in the United States regularly point to compulsory licensing-or even its threat-as the mechanism that peer countries use to control the price of prescription drugs. Our comparative analysis shows that compulsory licensing is not frequently employed in high-income countries outside the United States as a direct response to drug prices. When its use is threatened, a license is rarely issued and even less often does it lead to a price discount. Accordingly, compulsory licensing is unlikely to contribute to price discrepancies between the United States and other developed nations. In fact, of the 21 compulsory licensing petitions we identified outside the United States, over one-third were made by pharmaceutical companies themselves and only three were threatened by a government authority.

CONTEXT

Compulsory licensing is a practice whereby national authorities can license a third party to produce a patented product, such as a pharmaceutical drug, effectively enabling the production of a generic before the original patent expires. The policy was designed-and has historically been used-to improve access to essential medicines in low-income countries and during public health crises. Although it was not intended to impact drug prices directly, the threat of compulsory licensing may indeed contribute to lower drug prices in high-income countries outside the United States. Our study sought to determine the plausibility of this claim.

METHODS

We compiled a comprehensive database of compulsory licensing episodes in the United States and 17 comparator nations over the 20 years following the 2001 Doha Declaration, and we recorded the motivation and outcome of each instance. Our search began with publicly available reports compiled by organizations specializing in pharmaceutical intellectual property, expanded to a query of legal proceedings in Westlaw, and concluded with a comprehensive literature review on PubMed.

FINDINGS

This strategy yielded 45 unique episodes of compulsory licensing, 24 in the United States and 21 outside. A minority (24%) of petitions outside the United States were motivated by high prices, and in all countries, only three cases were clearly associated with a price discount.

CONCLUSIONS

We found no evidence to suggest that compulsory licensing is either frequently threatened or successfully implemented by countries outside the United States to secure price discounts for the most expensive pharmaceuticals, those that are newly patented and just entering the market.

The Legislative Approach and System Improvement of China's Compulsory Licensing for Drug Patents

Compulsory licensing for drug patents is of great significance to ensure the accessibility of drugs. Although the development of China’s compulsory licensing system for drug patents has been gradually improved, there are still problems. For example, the scope of the object is not realistic, the setting of the initiating subject is unreasonable, the reasons for issuance are not clear, the duration and scope of the license are not refined, and the provisions on the exploitation fee are missing. Consequently, in order to improve China’s compulsory licensing system for drug patents, it is necessary to expand reasonably the scope of the object, remove the restrictions on the initiating subject, adjust the initiating rights of different subjects, determine the duration and scope of the license and the applicability of the hearing on a case-by-case basis, and determine a reasonable exploitation fee by taking into account the national income, patent cost, market share and other factors, in consideration of the flexibly international norms and the actual situation in China.

How Much Time Before Attempting Compulsory Licensing of Pharmaceuticals? A Non-parametric Event History Model With P-splines

Compulsory licensing (CL), provided by the Agreement on Trade-Related Aspects of Intellectual Property Rights, enables countries, including high-income countries, to ensure the protection of public health in the context of stringent intellectual property regimes. This study investigated associations between the time to attempted CL and a series of factors at the drug and country level. We used a dataset of all attempted CL that occurred from 1995 to 2014, calculated the duration as the difference in years between the year of global marketing of a certain drug and the year of attempted CL in a certain country, and applied a nonparametric event history model. We found that the Doha Declaration was quite effective in shortening the time to attempted CL. Additionally, even though global justice movements have encouraged some countries to attempt CL for various medicines since 2012, the time to CL attempts in this period became significantly longer compared to those that occurred immediately after the Doha Declaration. Our findings show that the subject of CL has not successfully expanded to oncology medicines from HIV/AIDS medicines and that recently approved medicines are not yet subjects of CL. Furthermore, our duration model suggests a learning-by-doing effect in attempting CL: previous experience of CL not only triggers CL for the same drugs in other countries but also accelerates CL for other drugs within the country.