[Ip-health] Academics Sign-On: Countries' Rights to Issue Compulsory Licenses

Peter Maybarduk pmaybarduk at citizen.org
Fri Apr 24 07:00:44 PDT 2015

Dear colleagues, 
Peru's Ministry of Health has advanced a draft decree for a compulsory license on the HIV drug atazanavir to Peru's council of ministers. The multinational industry's trade group, ALAFARPE, has lobbied against the proposed license and circulated misleading information. 

It would be useful to Peruvian officials in their decision making process to hear from academics and international experts regarding countries' rights to issue compulsory licenses. We ask academics and IP experts subscribing to this list to review the following letter, and if you agree, to sign on by sending us your name and affiliation.  

More information on this case is available on our webpage: http://www.citizen.org/about-atazanavir-campaign. 

Thank you,

Peter Maybarduk, Hannah Brennan, Luz Marina Umbasia Bernal (Public Citizen / IFARMA)
April xx, 2015

President Ollanta Humala Tasso

SUBJECT: Peru's Right to Issue a Compulsory License for the HIV/AIDS Medicine Atazanavir

Dear President Humala,

We are lawyers, economists, and academics specializing in fields including intellectual property, international trade, and health policy writing to affirm that international rules support Peru's right to issue compulsory licenses on patents covering important medications. A recent article in Peru's La Republica1 newspaper indicated that Peru's Ministry of Health has proposed licensing the patents associated with the HIV/AIDS medication atazanavir (marketed by Bristol-Myers Squibb as Reyataz®). This proposal follows a November 2014 request from Peruvian civil society organizations for such licenses. 

High prices for any necessary medicine impose a burden on the public health system responsible for providing it. When a pharmaceutical company holds a patent-facilitated monopoly over a particular medicine, it can charge much higher prices than possible in a competitive environment. In Peru, public programs often shoulder the burden of these higher costs, which necessarily limit the health services that the State can provide to its people. 

Fortunately, patent rules also contemplate safeguards for protecting public interests, including health. Among these protections is the right to issue a compulsory license and to engage in government use of patents. Compulsory licensing of patents on medications allows the state to authorize generic manufacturers to produce patented medical products, typically in exchange for royalty payments to the patent holder. Because competition among manufacturers is the most effective means of reducing pharmaceutical prices, compulsory licensing and government use of patents are essential public interest safeguards. 

Peru has every right to issue a compulsory license on atazanavir under international law. Article 31 of the World Trade Organization's Agreement on Trade-Related Aspects of Intellectual Property (WTO's TRIPS) permits all WTO members, including Peru, to issue compulsory licenses at any time on grounds of their choosing.2  WTO members are free to issue compulsory licenses irrespective of whether a national emergency exists; in fact, the WTO calls the idea of an "emergency" requirement a "common misunderstanding."3 As the WTO itself has explained, "The TRIPS Agreement does not specifically list the reasons that might be used to justify compulsory licensing."4 In cases of public non-commercial use, the government can forgo notice to the patent holder prior to the grant of the license.5 The only compensation due to patent-holders in instances of compulsory licensing is a reasonable royalty, which governments may determine at their discretion.6 
The WTO's Declaration on the TRIPS Agreement and Public Health affirms this interpretation of Article 31 and its importance to public health policy.7 The Doha Declaration explicitly recognizes the impact of intellectual property laws on medicine prices and affirms that countries' patent obligations under WTO rules "should be interpreted and implemented in a manner supportive of WTO members' right to protect public health and, in particular, to promote access to medicines for all."8 Moreover, the issuance of a compulsory license on atazanavir would not violate any free trade agreement or bilateral investment treaty to which Peru is a party.9

Although Bristol-Myers Squibb (BMS) currently licenses atazanavir to 110 countries through the Medicines Patent Pool, BMS has refused to include Peru in the pool.10 BMS has also rejected Peru's appeals to purchase atazanavir at the lower prices BMS extends to other Latin American nations that are outside of the pool.11 Accordingly, it is all the more appropriate that Peru issue a license of its own design, on reasonable terms and conditions. 

Issuing a compulsory license does not modify or expropriate the property rights of the patent holder. Rather, the right of a government to make use of a patented invention is embedded and reserved in the grant of a patent. Furthermore, a license does not prevent the patent holder from continuing to sell its product, prohibit non-licensed uses of the invention, or prohibit non-licensed parties from using the invention. 

We hope this letter will help put to rest any concern regarding the international legitimacy of compulsory licensing. The rights of Peru to make government use of patents are ample and clear. Compulsory licensing, in accordance with WTO rules, is a key tool for protecting the financial stability of health systems and ensuring access to medicines and health services for all. 


Renata Avila, JD
Expert in Human Rights and Intellectual Property Law

Brook K. Baker, JD 
Health GAP (Global Access Project) 
Northeastern University School of Law, Program on Human Rights and the Global Economy
Boston, United States

David Grewal, JD, PhD
Yale Law School 
New Haven, United States

Andres Guadamuz, JD
University of Sussex School of Law
Brighton, United Kingdom

Germán Holguín Zamorano, JD, M.Sc
Expert in Intellectual Property Law and Health
Author of "The War Against Generics"

Sean Flynn, JD
American University Washington College of Law
Washington, D.C., United States

Peter Jaszi, JD
American University Washington College of Law
Washington, D.C., United States

Matthew Kavanagh, Ed.M., PhD Candidate
University of Pennsylvania Leonard Davis Institute for Health Economics
Philadelphia, United States

Alma de León
Expert in Intellectual Property Law and Health
Guatemala City, Guatemala

Suerie Moon, MPA, PhD
Harvard T.H. Chan School of Public Health & Harvard Global Health Institute
Boston, United States

Mike Palmedo, PhD Candidate 
American University

Srividhya Ragavan, JD, LLM
University of Oklahoma College of Law
Oklahoma City, United States

Andrea Carolina Reyes Rojas, Pharm.
Expert in Intellectual Property Law and Health
Bogota, Colombia

Judit Rius Sanjuan, JD, LLM, MA
Lawyer and Expert in Intellectual Property Law and Health
New York, United States

Francisco Rossi Buenaventura, MD
Fundación IFARMA / Acción Internacional Para la Salud Salud Colombia

Susan K. Sell, PhD
George Washington University
Washington, D.C., United States

Peter K. Yu, JD
Drake University Law School 
Philadelphia, United States

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