Innovative pharmaceuticals take notice. Reuters’ Tan Ee Lyn asserts that China “overhauled parts of its intellectual property laws” to allow generics companies to start exploiting patented medicines cheaply. In other words allowing compulsory licensing. Tan mentioned one medicine for HIV patients as a possible candidate for compulsory licensing.
“China is known to be looking at Gilead Sciences Inc’s tenofovir, which is recommended by the World Health Organisation as part of a first-line cocktail treatment for AIDS patients, two sources with direct knowledge of the matter said.” Read Tan’s article here.
Three questions:
Q 1. Did China’s law really change?
Q 2. Is it true that China targets the Tenofovir patent?
Q 3. Would there be any justification in the case of compulsory licensing by the Chinese government of this anti-retroviral drugs patent?
Three answers:
A 1. First question that arises is whether China’s law really changed. So I compared the Third Revision of the Patent Law 2008 (Patent Law) which has eleven articles dealing with compulsory licensing with the 43 articles of a regulation which became effective May 1, 2012, called Measures on Compulsory License of Patent Exploitation 2012 (IP Dragon Laws and Regulation Update) in English and Chinese.
The Measures just add some administrative rules to the compulsory license provisions in the Patent Law. It include the requirement of the requesting party, and the patentee. How to request for a compulsory license, which evidence needs to be provided, when a request will be rejected because of non-compliance to some requirements, what the requester can do to correct its request, what the patentee can do against a compulsory license, procedures of hearings, rules about specifying the conditions, and rules on how to request for a determination on the compulsory license royalties, how to request a termination of a compulsory license, when notifications are needed, and the time frames for each action. One big checklist for requesting party and patentee.
So the answer is: one can hardly speak of an overhaul of the law. Everything was already possible without Measures. The only thing the Measures do is compelling the parties involved to apply some procedural rules.
A 2. Tan claims that Gilead’s Tenofovir, which is sold under the brand name Viread and sold 737.9 million US dollar last year, will be targeted by China for compulsory licensing. Tan bases this assertion on “two sources with direct knowledge of the matter”. How to weigh this claim made on two sources whose name or function is not revealed? Although the law has not been overhauled, only clarified in some administrative ways, the fact that this happened recently and was not really needed could indicate that something is going on.
A 3. Is it justified to place a successful patented anti-retroviral drug, that potentially can safe lives, such as Tenofovir under compulsory licensing?
The argument that billions of dollars are needed to be invested in the development of innovative drugs and that compulsory licenses are the kiss of death to these necessary investments in Research and Development is still valid. In the case of HIV and AIDS, one can also argue that governments have the responsibility to avoid pandemics. Therefore it is ironic that in South Africa, where the president Mbeki insisted that AIDS was caused by a virus but by poverty, and therefore he did not accept even free medicines, or in China where HIV/AIDS was just ignored for a long time. In other words, if a government does not take steps to avoid a pandemic, should it be able to later grant compulsory licenses? Or should it, especially if it has enough money in the bank, use its money to save its own people?
Human lives need to be saved, that is clear. But governments that forsake their obligation to avert a widespread disease within their populations might have lost their ethical right to grant compulsory licenses.