Don’t Be Afraid of Compulsory Licenses Despite US Threats: Special 301 Reports 1998-2017 – Listing Concerns but Taking Little Action

For the past 20 years in its annual Special 301 Reports, the US has consistently criticized countries that do not have compulsory licensing standards that Big Pharma likes, that threaten to issue compulsory licenses, or that have actually had the temerity to issue a compulsory license. All the infamous cases are here – the threat against South Africa because of a misreading of its 1998 Amendments to its Medicines and Related Substances Act that it would allow compulsory licenses, 2001 WTO action against Brazil over one of its compulsory licensing provisions, the 2007 threat against Thailand after it issued government use licenses on HIV, cancer, and cardiovascular disease medicines, the strident 2012-2017 threats against India after it issued just one compulsory license on an overpriced cancer medicine, the 2008 and continuing threats against Ecuador for multiple compulsory licenses, and the 2013 and continuing threats against Indonesia after it issued seven licenses on HIV and hepatitis medicines and later amended its patent law to make it easier to issue compulsory licenses.

Although early complaints against compulsory licenses by the USTR were vague, expressing indignation about overly broad compulsory licensing provisions, once compulsory and government use licenses were actually issued the U.S. couldn’t find one that it could condone. All these threats and bluster occurred against a backdrop where the U.S. piously referenced its respect for the 2001 Doha Declaration on the TRIPS Agreement and Public Health clarifying countries’ right to issue compulsory licenses and the August 30, 2003 Decision providing compulsory licensing options for countries with insufficient manufacturing capacity.

Despite its many complaints, veiled threats, and backroom maneuvers against compulsory licenses, the USTR’s bark has been much, much louder than its bite. That hasn’t stopped some countries, such as India, Brazil, and Thailand from temporarily backing down, but they and other countries should realize that they cannot effectively address monopolies on medicines if they are unwilling to act individually and collectively to use their sovereign powers and internationally agreed upon rights to issue compulsory and government use licenses when it is in their interest to do so.

Also despite U.S. threats, some bold countries have recently issued compulsory licenses or have initiated steps to do so. Most promisingly, Malaysia issued a compulsory license for Gilead hepatitis C medicines, sofosbuvir, in September, 2017, which will allow it to develop a new formulation with another promising HCV direct acting antiviral and to expand its potential suppliers beyond India to include Egypt and possibly local Malaysian manufacturers as well. Malaysia made this important decision even though Gilead had been forced to expand its existing, but restricted voluntary license on its HCV medicines to include Malaysia just one month earlier.

Similarly, Colombia has dusted itself off from nasty threats against its peace process and an investor-state-dispute settlement claim when it issued a public interest declaration on

Novartis’s cancer medicine, imatinib mesylate, that would have justified the issuance of a compulsory license. Instead of permanently backing down, Colombia has recently initiated the same kind of public interest declaration to be able to issue compulsory licenses if needed to gain affordable access to HCV medicines.

These two recent actions on compulsory licenses are earning howls of protest from Big Pharma and rumblings in the U.S. government, which always leaps to the defense of its pharmaceutical paymasters. Malaysia and Colombia, and any other country that takes the initiative to issue compulsory licenses, should rest assured that such licenses are completely lawful under the WTO TRIPS Agreement. Moreover, there are many precedents for compulsory, government use, and judicial licenses in the U.S., Germany, Italy and many other countries. Accordingly, countries should increasingly act in a coordinated fashion to defend their right to adopt and deploy fair and easy-to-use compulsory, government use, and judicial licenses. Their use can become routine rather than exception where innovators continue to deny access through voluntary licenses or affordable pricing.

Mentions of Patent-Related Compulsory Licenses in Special 301 Reports 1998-2017


By: Professor Brook K. Baker, Northeastern U. School of Law & Senior Policy Analysis Health GAP