Potential Role of Compulsory Licensing in the Post-COVID Recovery: Contexts, Challenges and Prospects

In 1995, the World Trade Organization (WTO) linked intellectual property protection with the trade because signing Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement is a prerequisite condition to become a WTO member. Prior to TRIPS, pharmaceuticals were excluded from patent protection in domestic laws of about fifty countries. TRIPS provided mandatory patent protection to inventions in all fields of technology for a period of twenty-years. It was anticipated at the time of drafting of TRIPS that the exclusive rights granted under patent law may have serious practical implications for poorer countries in accessing affordable medicines. Public health safeguards were therefore included in the original draft of TRIPS. Compulsory licensing of drug patents, allowed under Article 31 of the TRIPS Agreement, is one of the most notable safeguards for public health. A compulsory license is a statutorily created license that allows certain people to pay a royalty and use an invention without the patentee’s permission. In 2001, the ‘Declaration on TRIPS Agreement and Public Health’ not only affirmed the right of member states to grant compulsory licenses but also stated that public health crisis can be a justifiable ground for the grant of compulsory licenses. Practical implementation of compulsory licensing safeguard has remained controversial. Political pressure exerted by developed countries prevents developing and least developed countries from exercising their rights under TRIPS and Doha. Powerful countries, like the U.S., not only use the economic leverage - through Special 301 mechanism - to deny legitimate flexibilities to low and middle-income countries but also promote “TRIPS-Plus” policies under free-trade agreements. These bilateral or regional trade agreements require poorer countries to adopt stringent intellectual property rules that are not required under any multilateral treaty. These agreements extend patent life beyond twenty years limit, limit use of compulsory licensing and discourage market entry of generics even after the expiration of patent protection. Consequently, the issue of affordable and equitable access to innovative health technologies has been the subject of a long-standing global debate on intellectual property, trade, and public health. The United Nations Human Rights Council’s resolution, adopted in June 2016, noted that “actual or potential conflicts exist” between the implementation of TRIPS and the realization of the right to health. In September 2016, the UN High-Level Panel on Access to Medicines released its Report which echoed most of the sentiments expressed by the UN Human Rights Council in its resolution. Stephen Lewis, a Canadian politician and UN Special Envoy on HIV/AIDS, noted that “access to medicines has become one of humankind’s greatest crisis, perhaps right behind climate change”. The current COVID-19 has put this problem in the limelight because governments, even in the economically advanced countries, are struggling to meet the health needs of their populations. Patent exclusivities add to the cost of healthcare by allowing supra-competitive prices of protected technologies. On May 18-19, 2020, the annual meeting of the World Health Assembly (WHA) was held virtually to discuss the global response to COVID-19. The Resolution WHA73.1, titled COVID-19 Response, recognized that all countries should have timely and affordable access to COVID-related health technologies. The resolution, however, failed to define any specific concrete actions or provide clear guidance on how to achieve this goal. WTO Member States are considering the available policy options to achieve this goal. Countries like Chile and Ecuador have already considered the use of compulsory licensing to secure access to COVID-19 related health technologies. Canada has recently amended its patent laws to provide for a fast-track compulsory licensing option in response to the current epidemic. Some European Union countries, like France and Germany, have made recent changes to their laws to facilitate the use of compulsory licensing. Israel has actually issued a compulsory license on Abbvie’s ARV drug Keletra. In this context, this paper evaluates the policy option of compulsory licensing and highlights its role in the post-COVID recovery. Compulsory licensing has a potential role in economic and public health recovery not only in the developing world but also in economically advanced countries. This paper analyses how and why several countries have recently adapted their patent laws to facilitate the use of compulsory licensing safeguard and to what extent the current pandemic is bridging the North-South divide on the issue of compulsory licensing. This analysis, in respect of practical and legal aspects, draws upon a wide range of sources including statutes, peer-reviewed publications, blogs, quotations from stakeholders, media reports, and real-world examples. This paper argues that for a long-term solution to the problem of affordable access to medicines/vaccines and to have policy space for considering economic interests at national levels, WTO Member States need to revive the spirit of the Doha Declaration which was arguably the best multilateral effort to accommodate the conflicting interests.

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