Pharmaceutical groups that want to protect their patents and revenues may be angry at the proposal for compulsory licensingThe EU is planning a compulsory licensing system to allow it to take control of the manufacture of drugs and vaccines during a public health emergency, despite calls from pharmaceutical groups to protect patents.
Brussels wants to be able to respond quickly to health crises like Covid-19. The European Commission’s draft proposal is part of a comprehensive reform of pharmaceutical regulations. This has already caused concern in the industry and could be changed before Wednesday.
Compulsory licenses allow a government force a drugmaker share intellectual property and technical knowledge with other companies in exchange for a fee, so that they can manufacture the product and increase volumes while potentially lowering costs.
Most legal systems in the world allow compulsory licenses. However, governments do not want to give them out for fear of damaging their relationships with drug manufacturers.
The draft proposal states that “Compulsory licenses can be a solution for allowing rapid production of products required to combat a crisis,” To ensure that these products are freely available on the internal market, and can reach those who need them, compulsory licensing must be granted at EU-level.
The report says that there are “a patchwork of national rules and regulations” and that products licensed in one nation cannot often be imported into another.
The Commission said that the threat of compulsory licensing will also make it easier for businesses to enter into voluntary agreements.
The pharmaceutical industry, however, will insist that it should be able to continue to produce its own products and won’t want to cede control to a third party. An industry insider claimed that compulsory licensing would deter future investment, and wouldn’t address issues such as the stretched supply chains developed during the Covid-19 epidemic.
Many campaigners believed that compulsory licenses should be granted to nations in order to manufacture drugs independently of their original manufacturers. This was during the peak of Covid-19 and severe drug shortages. Israel issued a compulsory license for Kaletra, a HIV drug which was ultimately ineffective against Covid-19.
By 2020, Germany , Canada , Australia , and Chile all took steps or considered a more flexible way to issue compulsory licenses.
The EU didn’t seize control over vaccines or drugs. The commission was concerned about the supply of Covid-19 vaccines, especially after AstraZeneca’s orders were delayed. The Commission sued AstraZeneca for billions of Euros in damages, if they failed to meet their delivery target. Later, the dispute was settled.
Ellen ‘t Hoen of the research group Medicines Law & Policy said that the establishment of EU wide compulsory licensing during a crises would be a “very important advance, not least because the regulations suspend data and market exclusivity – barriers to the effective use of mandatory licensing in the EU.
‘t Hoen did note that an “all-encompassing” EU-wide system of compulsory licensing was still lacking. She said that the powers needed to be widened so they could be used in situations other than extraordinary ones, such as preventing a crisis, reducing high prices, or providing life-saving medications.
Sergio Napolitano said that the increased number of voluntary licensing agreements, for instance between rival manufacturers during Covid, proved to be a good tool for striking a balance between access and innovation.
Napolitano stated that the initiative should be supplemented by measures to make Europe more competitive. This includes encouraging EU manufacturing of active pharmaceutical components, or APIs. These are used in drug production.
In an early draft of the package, market exclusivityfor pharmaceuticals was suggested to be reduced from 10 years to 8 years if companies did not launch their products in all 27 members states within two years. Germany said this would discourage investment. Six other member states, led by the Netherlands, have called on the commission to remain firm in order to benefit patients.
The plan will also try to combat the drug shortage by requiring stockholders and producers to declare their stocks. These proposals require the approval of the member states and European Parliament.
The commission has not responded to a comment request.