A Look At Compulsory Licensing & Essential Medicines In The Pharmaceutical Industry

Compulsory licensing of essential medicines doesnt always provide the greatest help to the poorest people of the world according to a round table highlighted by The Policy Network. The danger of compulsory licensing is that it can be abused by some in developing countries and create a culture of disrespect for intellectual property. The solution, rather than overt compulsory licensing, is to encourage these governments to respect intellectual property, thus creating incentives for the development of new medicines or technology. As mentioned by Dr.Bibek Debroy, Research Director at Indias Rajiv Gandhi Institute, when a property owner is allowed to protect his rights to the land, it provides him an incentive to develop and improve the land. Pharmaceutical intellectual property protection gives the developer the ability to finance the further advancement of that medicine. A compulsory license that is granted without sufficient cause dilutes the incentive for the developer of the medicine to improve the product.

How Compulsory Licensing Works

The concept of compulsory licensing for pharmaceuticals was originally developed to give the poorest countries in the world access to essential medicines in a time of crisis. For example, let's say an African country is being overrun by an AIDS epidemic, but they cant afford the brand name medications to be shipped overseas in the quantity they need. A compulsory license allows them to use the patent of the medication to manufacture it on their own so long as a royalty is paid to the intellectual property owner. However, the concept could be abused by pirates in developing countries to create generics of the drug with intent on capitalizing on a business opportunity.

The Intellectual Property Solution

Fortunately, a 2003 amendment to TRIP by the WTO to give the poorest countries alternatives to receiving the medicine they need has helped restore the concept of the compulsory license to its original intent. The amendment gives more oversight to making sure the medicines reach their intended destinations and are properly distributed as well as ensures that compulsory licenses are granted only to countries that do not have the means to develop their own medicines.