The World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) sets forth minimum intellectual property standards that all 164 members of the WTO are bound by. The TRIPS Agreement covers substantive rights and enforcement measures for various types of intellectual property. One section covers patents, including what is patentable and what may be excluded from patentability (for example, diagnostic, therapeutic, and surgical methods as well as plants and animals) and the rights a patent confers. Significantly, it includes a provision on limitations and exceptions and a lengthy article regarding other uses without authorization from the rightholder, including a “compulsory license” in which a government can order the exploitation of the patent in exchange for payment to the rightholder of a reasonable royalty. These provisions — as well several others — are frequently termed “TRIPS flexibilities” and have been a vital tool in addressing public health and safety concerns.
While in most countries, a patent grants the rightholder the ability to exclude others, the carefully negotiated TRIPS ensured that countries retained significant rights to mitigate potential issues that may arise from the grant of exclusive rights. Unsurprisingly, one of the more significant areas this has come into play involves medicines. While a patent holder can charge whatever the market will bear — sometimes tens of thousands of dollars for medicines and treatments — what happens in a public health emergency? What rights does the government retain in protecting the health of its citizens? While public health is an obvious area where patents may play a significant role — or barrier — to achieving particular development goals, one can also imagine the potential impact in other sectors, such as green technology.
Numerous countries have used TRIPS flexibilities to address significant issues of public health and safety. In several high profile cases, Thailand successfully relied on TRIPS flexibilities for antiretroviral medicines to treat HIV/AIDS and various cancer treatments. Ecuador similarly issued compulsory licenses for a number of medicines to treat HIV/AIDS and other diseases. Outside of these high-profile examples, though, a narrative is often spun that these are outliers or that only countries of certain levels of development should rely on compulsory licenses.
Enter the recent publication of Medicines Law & Policy’s TRIPS Flexibilities Database, which lists actual cases where TRIPS flexibilities have been invoked in the public health context. This database lists countries that have used, or threatened to use, TRIPS flexibilities, the article or paragraph of the TRIPS Agreement relied upon, the medication/product and disease it is intended to treat, whether the request was granted, and comments for some cases where the flexibility was not executed. The value of this database is extremely useful for a number of reasons. Some countries have concerns that reliance on these TRIPS flexibilities will be criticized by more developed countries and this database reveals that even countries with strong patent protections have invoked compulsory licenses. Additionally, it reveals the breadth of diseases and public health concerns where compulsory licenses have been warranted — in other words, the use of TRIPS flexibilities is not limited solely to addressing HIV/AIDS. Furthermore, the examples in the database can be used to address a common misconception that compulsory licenses are limited to emergencies.
A review of the database reveals that countries of all levels of development have relied upon compulsory licenses, even if they were not ultimately executed. High-income countries are certainly responding to soaring medicines costs — again, how high a price or price increase will the market bear? When a compulsory license request is initiated, pharmaceutical companies may respond by reducing its prices before a decision is reached on the license or even voluntarily donating the product. For example, in 2001 during the anthrax scare, the George W. Bush Administration threatened a compulsory license for ciprofloxacine, the antibiotic used to treat anthrax. Bayer responded by agreeing to sell the drug to the government at an approximately 45 percent price reduction. Other major pharmaceutical companies — such as Bristol Myers Squibb, Johnson & Johnson, Eli Lilly and Pfizer — subsequently offered to provide their drugs for free or at cost if needed by the government to treat anthrax. While some companies may have made these offers to generate positive PR, the threat of compulsory licenses undoubtedly played a part. The Medicines Law & Policy blog notes that, “the threat of a compulsory licence hardly ever goes without effect. Of the 20 compulsory licenses that were announced by not executed, 12 cases resulted in price discounts, a donation or a voluntary licence. All of these measures that can help increase access to medicines.”
For those interested in how countries can, in accordance with international obligations regarding intellectual property, address public health concerns where patented treatments are involved, the TRIPS Flexibilities Database provides a comprehensive review of worldwide examples.
Krista L. Cox is a policy attorney who has spent her career working for non-profit organizations and associations. She has expertise in copyright, patent, and intellectual property enforcement law, as well as international trade. She currently works for a non-profit member association advocating for balanced copyright. You can reach her at [email protected].