Trips Agreement Compulsory Licensing
In addition to these flexibilities, the ON TRIPS agreement includes the use of various instruments to improve access to medicines. These include the right of Member States to issue compulsory licences. A compulsory license is a licence issued by a country government to a third party for the manufacture of a patented drug without the patent holder`s permission. Article 31 of the ON TRIPS Agreement authorizes the granting of a compulsory licence in circumstances such as „national emergencies,“ „other circumstances of extreme urgency,“ non-commercial use of the public or „anti-competitive“ practices (WTO, 2006). This means that a Member State can improve access to a certain patented drug by making an exception to its existing patent without entering into price negotiations with the patent holder. Yes, that is where the confusion about emergencies arises. In the event of a „national emergency,“ „other extreme emergency“ or „non-commercial public use“ (or „state use“) or anti-competitive practices, there is no need to apply for a voluntary licence first. This is the only case where the TRIPS agreement is specifically related to emergencies with compulsory licenses: the aim is to say that the first step in negotiating a voluntary license can be bypassed to save time. But the patent holder has yet to be paid. Son K-B, Lee T-J. The trends and constructive ambiguities of international agreements on intellectual property and pharmaceutical affairs: impact on national legislation in low- and middle-income countries. Global Public Health.
2018;13(9):1169-78. Third, it is difficult to identify and unravel the effects of mandatory licensing because the information is simply unavailable. The analysis of 11 of the 24 compulsory licensing events is not based at all on official sources. As explained within the limits, there are at least 50 other mandatory licensing events for which no price data could be accessed. Since compulsory licensing is a state instrument, our results call for greater transparency about its application and impact. If no price data is published, it is simply not possible to assess the effectiveness of this policy instrument. Therefore, official pricing information before and after compulsory licensing should be disclosed to avoid abuse and to ensure that private interests are not put forward by public interests. A compulsory licence may be granted by a government to a generic drug manufacturer, allowing it to produce copies without the patent holder`s consent. The initial TRIPS agreement placed conditions on the use of compulsory licences to prevent the entire system from being undermined.
The exact scope allowed by these conditions has been the subject of much debate. With respect to access to medicines, the most important condition was that the production of copies be made primarily for use in the country licensed by the government. In Figure 1 (section 2), we have shown that the system in paragraph 6 may be the only option for countries that do not have sufficient production capacity, in the absence of voluntary licensing agreements and generic drugs readily available for imports.