Report on Compulsory Licensing Provisions in the National Patent Legislation of 15 Middle-Income Countries: A Content Analysis and Recommendations

The access to medicines discourse over the past 30 years has highlighted the myriad of obstacles to access experienced by low- and middle-income countries (LMICs). Already plagued by over-taxed health services systems, a limited health care workforce and other resource constraints, in the mid-1990s these countries faced a new constraint in the form of the World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (hereafter referred to as the TRIPS Agreement or TRIPS). The TRIPS Agreement raised the global baseline of protection for intellectual property rights (IPRs) including patents. As a result, countries struggled to gain access to medicines for major infectious and non-communicable diseases.

The TRIPS Agreement, however, does provide for certain exceptions and limitations to exclusive IPRs, often referred to as TRIPS flexibilities. The principal flexibility is a provision allowing for compulsory licenses (CLs), authorizations granted by governments to allow themselves or others to work a patent without the consent of the patent holder. Unfortunately, many upper-middle income countries (UMICs) are often excluded from voluntary licenses.

In a new report published with the South Centre, Brook Baker, Deborah Gleeson, Warren Kaplan, Brigitte Tenni, Rachel Thrasher and Veronika Wirtz examine the national legislation supporting the granting of CLs by middle-income countries (MICs). The study is both a content analysis of the CL laws of 15 countries and a comparison between those laws and a set of “best practices,” identified by experts in the area of access to medicines and IP, to maximize the policy space that countries have to issue effective compulsory licenses.

Main findings:
  • All 15 countries in the sample have established CL laws, which is unsurprising given that all of the countries are WTO members, except for Algeria, which has “Observer” status. These laws allow for at least some bases for issuing CLs, usually at the request of an interested party.
  • Most importantly, none of the subject countries have maximized their CL policy space. There is significant variation in the degree to which, and the ways in which, flexibilities provided for by TRIPS Article 31 and 31bis have been incorporated into countries’ national CL laws, which is consistent with the findings of previous studies.
  • The issuance of CLs does not depend on the quality of legislation alone. There is a complex interplay between other factors in the environment that shape the prospects for a successful CL, including the patent and trade secret landscape, political will and pressure, regulatory requirements, technical and financial capacity and market size.
    • In other words, having workable CL legislation is necessary but not sufficient–whether governments are able to issue CLs may be more related to legal, economic, resource and political factors aside from the technical aspects of their laws.
Policy recommendations:
  • National law reform: Countries should, as much as possible, fully adopt the TRIPS flexibilities for more effective and easier use of CLs for access to medicines.
  • Technical Support for countries excluded from voluntary licenses: Given the limited incorporation of TRIPS flexibilities across the board in MICs, additional technical support and guidance should be provided by key international organizations with relevant mandates like the World Health Organization (WHO) or the United Nations Development Programme (UNDP).
  • Middle-income country cooperation and coordination: MICs should cooperate in sharing best practices with respect to law reforms and coordinate the granting of CLs in order to create aggregate markets and generate economies of scale for generic manufacturers.
  • Increasing attention to and adoption of supportive and enabling companion policies: Countries should harmonize their regulatory requirements to reduce the complexity, cost, and delay of seeking regulatory approval. Other recommended enabling policies include clinical guidance required in workforce training, adding more medicines to the essential medicines lists, and more.
  • Reform of TRIPS and other trade agreements: Ideally, TRIPS should be reformed to remove the specific obstacles in Article 31(f) and 31bis that keep countries from effectively aggregating purchasing and production markets, and to provide greater clarity around the other flexibilities available. Moreover, countries should avoid negotiating TRIPS-plus provisions and investment clauses that allow IP-related claims; and trade agreements that contain these types of provisions should be renegotiated.
  • Further research: There is a need for further research to identify better examples of full implementation of CL-related TRIPS flexibilities in national laws.
Read the Report