Pros And Cons Of Compulsory Licensing

Introduction

Compulsory licensing is one of the major talking points not just in India but largely in most countries around the world, be it developing or the developed countries and opinions range right to the extremes. The advantages of compulsory licenses, especially in the pharmaceutical sector are obvious. It allows access to essential drugs. On the flipside, accusations of it hurting innovation also abound. The project aims to look into look at both sides of the coin and hopefully come to a conclusion on how a balance can be achieved.

Compulsory Licensing in the Pharmaceutical Sector

March, 2012 was a historic day in terms of compulsory licensing in India. The first compulsory license was given to Natco to produce a generic version of

There are generally two circumstances under which a generic version of a patented drug can be legally manufactured, either by a voluntary license by the patentee or by a compulsory license. In the case of a voluntary license, patent holders use their discretion to decide on either exclusive or non-exclusive terms, the rights to manufacture a drug on an agreed fee. Compulsory licenses are usually granted when the exclusive rights which are held by the patentee don’t meet the reasonable needs of the society or they are anti-competitive in nature. It allows to keep a check on pharmaceutical companies to price their drugs at an affordable level and to innovate further on processes to bring down the cost of

The TRIPS agreement allows for compulsory licenses as a part of the agreement’s overall attempt to strike a balance between promoting access to existing drugs and promoting research and development into new drugs. ‘Compulsory license’ does not appear in itself in TRIPS, but there is the presence of Article 31 which speaks about uses of the patent without the authorisation of the patent holder. Compulsory license is a part of this use which includes the usage of the patent by the governments of different nations. It is vital to note how the TRIPS agreement initially was. Article 31(f) used to be read to prohibit the manufacture of generics in third world countries for exporting to countries which were experiencing a health crisis. It essentially resulted in countries lacking indigenous pharmaceutical manufacturing capacity could not effectively access