Earlier this year, the Colombian government announced its first-ever compulsory license, issued for an innovative medicine treating HIV. Already, officials have expressed their intent to leverage the tactic again and again. Compulsory licensing, which strips innovators of their intellectual property (IP) rights by allowing the government to override patent protections for use without the patent holder’s consent, is a harmful and ineffective policy. Specifically:

• Compulsory licensing won’t help increase the supply of medicines. Granting a compulsory license does not necessarily increase a medicine’s supply – and may even decrease it. Researchers have found that compulsory licensing and weak IP rights are associated with delays in the launch of new, innovative drugs and disincentivize manufacturers to enter the market. This means compulsory licensing may actually reduce access to medicines in the long run.

    

• Compulsory licensing won’t promote local production of medicines. Some governments have promoted compulsory licensing with the belief that it will benefit domestic generic drug companies. However, studies have shown that undermining IP protections through mechanisms like compulsory licensing deters foreign investment and threatens economic growth. And given that a compulsory license does not transfer know-how, capacity or product quality – it can often take a significant amount of time for local manufacturers to launch their generic version.

   

• Compulsory licensing won’t address systemic barriers to medicine access. Compulsory licensing does nothing to address the real barriers to medicine access and equity – including supply chain challenges, weak health care infrastructure, low national health care investment and high taxes and tariffs – that often stand between patients and the medicines they need. Granting a compulsory license ignores the actual challenges that need to be addressed to achieve meaningful change for patients. 

Colombia issued the compulsory license simply to secure price concessions, which isn’t congruent with international rules. Under these rules, compulsory licensing is only intended for use in exceptional cases and as a last resort. There is no emergency necessitating the use of a compulsory license for the HIV medicine in Colombia. The government’s own research shows that nearly 90% of those living with HIV have access to treatment. Weakening the IP ecosystem only hinders further progress by deterring the risky and resource-intensive process of innovation.

Case studies from around the world emphasize that compulsory licensing does not improve health outcomes for patients or increase access to treatments and can hinder investment and innovation. 

• When Malaysia issued compulsory licenses for hepatitis C virus medicines, only 1,501 of the estimated 450,000 people with hepatitis C were treated with the compulsory licensed medicine in 2018. In the same time period, voluntary licensing facilitated the treatment of twice the number of patients in neighboring Cambodia, more than 15,000 patients in Vietnam and more than 18,000 patients in Thailand.
• In Brazil, it took two years to launch an antiretroviral treatment following the issue of a compulsory license, and ultimately Indian generic manufacturers stepped in to fill the void, and the compulsory license was reversed.
• Thailand, which issued a number of compulsory licenses from 2006 to 2008, concluded that such actions can deter investment in innovation.

Colombia has set a dangerous precedent with the issuance of a compulsory license. Compulsory licensing does more harm than good and should be rejected. Addressing real barriers and supporting mechanisms like voluntary licensing will better deliver for patients in Colombia without risking investment and innovation. Supporting and strengthening IP and the innovation ecosystem facilitates access and all the benefits that innovation brings.