Voluntary licenses and non-assert declarations
Actions by R&D pharmaceutical companies that facilitate access to medicines
Background/Rationale:
IFPMA member companies are committed to improving access to antiretrovirals (ARVs) for those who cannot afford them, particularly in Least Developed Countries (LDCs) and low-income countries (LICs). For many years, the pharmaceutical industry has created and delivered ARVs that have saved millions of lives in the global fight against HIV/AIDS. UNAIDS reports that approximately 2.9 million lives have been saved because of access to ARV therapy1 . About 1.2 million people started treatment in 2009, bringing the total number of people receiving treatment to 5.2 million, compared to 4 million at the end of 20082 . That access has often been achieved through the numerous access initiatives developed and deployed by the R&D
pharmaceutical industry, such as preferential pricing, donations, licensing and capacity building.
Most of these access initiatives do not depend on intellectual property rights. For example, preferential pricing and capacity building are relevant whether or not there are patents on pharmaceutical products. This is often the case in the LDCs and LICs. Where patents do exist, many companies have gone beyond preferential pricing initiatives to implement access models allowing generic companies to produce the patented medicine. Examples of these IP access models include voluntary licensing and non-assert policies.
Voluntary Licenses and Non-Asserts: What they are, how they work:
Voluntary License. A voluntary license is an authorization given by the patent holder to a generic company, allowing it to produce the patented article, such as a medicine, as if it were a generic. The license usually sets quality requirements and defines the markets in which the licensee can sell the product. The decision to grant a voluntary license, and the terms therein, can be tailored to account for many factors, including the nature of the epidemic/disease, social factors, economic considerations and the capacity of the licensee to meet and maintain quality standards for the product.
Non-Assert Declaration. A non-assert declaration (sometimes called a “non-assertion covenant”), is where a rights holder commits not to enforce certain patents in a defined group of countries allowing a generic version of a patent-protected article to be produced in a resource-limited setting. Some non-assert declarations may require a party wanting to make the product to meet certain quality requirements e.g. being pre-qualified by the WHO or being granted approval by a Drug Regulatory Agency (DRA).
Voluntary licenses and non-assert declarations build on other industry-led access initiatives enabling generics manufacturers to serve the market. However, in countries where IP rights are rarely sought, one might expect to see a sustainable supply of cheap generic medicines from a vibrant community of generic competitors, but that is often not the case. Generics companies need economically-viable markets in which to compete. These observations lead to the conclusion that the barrier is not IP, but the inability of generics manufacturers to operate sustainably, either because there is no commercial market or because the cost of doing business is too high. This problem is particularly acute when medicines are difficult and/or expensive to manufacture. Other major factors, such as the condition of infrastructure and/or health care systems, also play a crucial role in enabling access to medicines. If these factors are not in place, or fail to operate effectively, then the objective of medicine access is significantly undermined.
The IFPMA welcomes the current efforts to create “innovative mechanisms” to further improve access to ARVs in resource-limited settings. However, any such mechanism should not undermine the current and proven initiatives already in place in order to ensure the most effective and efficient use of the resources available.
Geneva, 28 July 2010
1UNAIDS Report on the global AIDS epidemic, 2009, p.17
2http://www.unaids.org/en/KnowledgeCentre/Resources/FeatureStories/archive/2010/20100719_Vienna_PR_WHO.asp
About IFPMA
IFPMA represents the innovative pharmaceutical industry at the international level, engaging in official relations with the United Nations and multilateral organizations. Our vision is to ensure that scientific progress translates into the next generation of medicines and vaccines that deliver a healthier future for people everywhere.
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