[Ip-health] Compulsory Licensing vs. International Procurement

Jamie Love james.love at keionline.org
Mon Apr 20 09:08:10 PDT 2015

Well, this is part of a long list of "patents don't matter" and compulsory
licenses "don't work" or are "bad" from Attaran.

On Mon, Apr 20, 2015 at 11:20 AM, Danny Edwards <dedwards at atmindex.org>

> Hi Justin and IPhealth colleagues,
> We would also be interested in other’s views on this paper - apols in
> advance if there has been a previous discussion which we missed...
> First of all, credit to the researchers of this paper for stimulating a
> debate about compulsory licensing.  However, we felt that the limitations
> of the paper’s methodology (which are acknowledged by the authors) meant
> that robust conclusions about the value of compulsory licensing or
> otherwise are difficult to draw from it.
> Our main concerns were:
> One -  Issuing CLs or the the ‘threat' of CLs have been cited many times
> as a key factor in industry decision-making to issue voluntary licenses or
> to cut prices.  Simply put - we don’t know what the pricing landscape would
> look like in the absence of a framework which allows CLs - so its very
> difficult to suggest that one system is better than the other.  Its much
> more likely to be the case  that they work synergistically.
> Two - We think the comparison made by the authors is not appropriate.
> They compare a CL price reached in a market where there is very little
> competition (only between the patented drug and the CL-produced competitor)
> where the CL competitor has - most likely - been manufactured locally -
> against a global procurement price in ‘peer countries’ - where patents are
> not necessarily in place.   This only becomes a fair comparison to make
> when there is a patent also in place in the peer country - in fact the
> authors note that when they reduced the sample to only include peer country
> comparators where there was a patent in place they found that CL prices
> ‘modestly outperformed’ international procurement prices.
> Best,
> Danny
> Access to Medicine Foundation
> Scheepmakersdijk 5A, 2011 AS Haarlem
> The Netherlands
> www.atmindex.org
> On 20 Apr 2015, at 14:19, Justin Mendoza <justin.mendoza at yale.edu> wrote:
> I stumbled upon this interesting piece the other day while researching for
> a project I'm working on. Thought I would share it here, and see if anyone
> had put out a response to it, or had any thoughts on the data.
> I found this line from the discussion most interesting: "The compulsory
> licensing price disadvantage was worst for those countries that were less
> well off in terms of Human Development Index score—the very countries that
> most need to save money."
> Link (apologies for the pay wall, they didn't publish open source):
> http://content.healthaffairs.org/content/34/3/493.full.pdf+html
> Compulsory licensing often did not produce lower prices for antiretrovirals
> compared to international procurement.
> Beall RF
> <
> http://www.ncbi.nlm.nih.gov/pubmed/?term=Beall%20RF%5BAuthor%5D&cauthor=true&cauthor_uid=25732501
> >
> 1, Kuhn R
> <
> http://www.ncbi.nlm.nih.gov/pubmed/?term=Kuhn%20R%5BAuthor%5D&cauthor=true&cauthor_uid=25732501
> >
> 2, Attaran A
> <
> http://www.ncbi.nlm.nih.gov/pubmed/?term=Attaran%20A%5BAuthor%5D&cauthor=true&cauthor_uid=25732501
> >
> 3.
> ABSTRACT Compulsory licensing has been widely suggested as a legal
> mechanism for bypassing patents to introduce lower-cost generic
> antiretrovirals for HIV/AIDS in developing countries. Previous studies
> found that compulsory licensing can reduce procurement prices for drugs,
> but it is unknown how the resulting prices compare to procurements through
> the Global Fund to Fight AIDS, Tuberculosis, and Malaria; UNICEF; and other
> international channels. For this study we systematically constructed a
> case-study database of compulsory licensing activity for antiretrovirals
> and compared compulsory license prices to those in the World Health
> Organization’s (WHO’s) Global Price Reporting Mechanism and the Global
> Fund’s Price and Quality Reporting Tool. Thirty compulsory license cases
> were analyzed with 673 comparable procurements from WHO and Global Fund
> data. Compulsory license prices exceeded the median international
> procurement prices in nineteen of the thirty case studies, often with a
> price gap of more than 25 percent. Compulsory licensing often delivered
> suboptimal value when compared to the alternative of international
> procurement, especially when used by low-income countries to manufacture
> medicines locally. There is an ongoing need for multilateral and charitable
> actors to work collectively with governments and medicine suppliers on
> policy options.
> -------------------------------------------------------
> Wishing the best,
> Justin Mendoza
> Yale | School of Public Health
> MPH Candidate *2015* | Health Policy
> E: justin.mendoza at yale.edu
> C: 269-762-2073 | @justindmendoza <https://twitter.com/JustinDMendoza>
> Linkedin Available Here <http://linkd.in/1o9jLDn>
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James Love.  Knowledge Ecology International
KEI DC tel: +1.202.332.2670, US Mobile: +1.202.361.3040, Geneva Mobile:
+41.76.413.6584, twitter.com/jamie_love

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