[Ip-health] (February 2015)-Wall Street Journal Pharmalot: Pharma Narrowly Defines When Compulsory Licenses Should be Used

Thiru Balasubramaniam thiru at keionline.org
Sun Mar 8 23:27:31 PDT 2015


1:23 pm ET
Narrowly Defines When Compulsory Licenses Should be Used

   - By

As the U.S. Trade Representative holds a hearing today to discuss how
countries protect intellectual property, the pharmaceutical industry hopes
to persuade the agency that countries should only be allowed to grant
licenses to companies to make low-cost generic drugs when there is a health
emergency. That posture, however, contradicts the position taken by the
World Health Organization.

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
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

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 <http://freepdfhosting.com/775f71110e.pdf> 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 WTO primer
<https://www.wto.org/english/tratop_e/trips_e/public_health_faq_e.htm> on
the topic notes that a health emergency is “not necessarily” required for a
license to be issued. “This is a common misunderstanding,” the WTO 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”

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
intellectual property protection.
Comments (1 of 1)

         - 12:39 pm March 8, 2015
         - James Love wrote:

      For the USA,USTR (correctly) thinks a breaking patent monopolies
      applies to the supply of iPhones and iPADs.

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