Patients Lose When Governments Break Patents

Ensuring timely access to health care is critical for patients everywhere. To deliver on that goal, governments around the world are investing in health and working with the private sector and other stakeholders to remove obstacles that can stand between people and the treatments they need.

Protecting patents and other intellectual property can play a critical role. One major study found that inventors of new medicines launch therapies sooner in countries with effective patent protection and enforcement. It showed that strong patent protection accelerates new product launches in higher and lower income countries alike.

But rather than improve protection for new treatments and address critical systemic challenges – from improving health care infrastructure to training more health care workers – a few governments have done just the opposite. They have broken patents on new medicines – a drastic action known as “compulsory licensing”.

The World Trade Organization defines a compulsory license as government authorization that allows a company or individual, other than the patent holder, to use the rights of a patent to make, use, sell or import a product protected by a patent without the permission of the patent holder.

When governments issue compulsory licenses, patients lose.

Such shortsighted measures ignore the facts. Patents are not a barrier to access – particularly when governments and the private sector partner to improve health outcomes. The vast majority of medicines prescribed around the world are generics, including more than 90 percent of products on the WHO’s Essential Medicines List.

When governments issue compulsory licenses, patients lose. Theses licenses are not an effective nor sustainable way to improve access or achieve other critical public health goals. They undermine investment in future treatments and cures without necessarily lowering prices, speeding access or improving health outcomes.

For example, a major study that looked at compulsory licensing of HIV treatments found that such licensing typically did not lower prices for medicines compared with international procurement programs and other alternatives. When Brazil issued a compulsory license for an antiretroviral treatment in 2007, it took the local manufacturer two years to launch production of a generic version.

Compulsory licensing is particularly ineffective relative to the many other alternatives available. There are better ways to make medicines more available to patients who could not otherwise afford them, including:

  • Drug donation and differential pricing programs that provide medicines free of charge or at substantially reduced prices;
  • Voluntary licensing, which allows entities to make, use, sell or import a patented medicine with the consent of the patent holder; and
  • Non-assert declarations, through which the patent holder commits not to enforce certain patents in certain places and circumstances.

Governments should consider these and other options before taking hasty action that can harm patients and inventors. Policymakers should grant compulsory licenses in accordance with international rules and only in exceptional circumstances and as a last resort. Decisions should be made on public health grounds through fair and transparent processes that involve participation by all stakeholders and consider all relevant facts.