Brazilian lawmakers propose compulsory licensing for Covid-19 products

As concerns mount over access to Covid-19 medical products, Brazil has become the latest country in which some lawmakers are seeking to issue compulsory licenses for medicines and vaccines to combat the novel coronavirus.

A group of legislators last week introduced a bill to permit the government to temporarily suspend any and all patents for medical products that could be used to fight Covid-19, as well as any future public health emergency declared by Brazilian authorities or the World Health Organization. Any license would be valid only for the duration of such an emergency.

“A wide base of producers is essential for us to overcome the situation of exclusion from access to health goods,” said Pedro Villardi, a consumer advocate and coordinator with the Working Group on Intellectual Property. “The point is to increase the government purchase options, with the agility for distribution that a health emergency requires. Whoever holds the patent will continue to sell, but it will not be able to do so in the form of a monopoly.”

Whether the government adopts the proposal, which was introduced earlier this month, is unclear. Brazilian president Jair Bolsanaro has been criticized for downplaying the severity of the pandemic and has dismissed precautions suggested by the health ministry. And a recent effort by the Brazilian government to effectively privatize its patent office alarmed patient advocates, who fear drug makers would more easily be able to maintain monopolies on medicines and, consequently, higher prices in one of the world’s largest economies.

The proposal comes against a backdrop of mounting angst over the rising cost of medicines, which has prompted a growing number of countries to consider licenses. A country may grant such a license to a public agency or a generic drug maker, allowing it to copy a patented medicine without the consent of the brand-name company that owns the patent. This right was memorialized in a section of a World Trade Organization agreement known as the Trade-Related Aspects of Intellectual Property Rights.

The move toward licensing in some countries is not new. Across the globe, a growing number of cash-strapped governments are grappling with the rising cost of medicines, which has prompted increased interest in licensing. But Covid-19 has quickly prompted several countries — including Ecuador, Chile, Germany, and Canada — to explore or expand licensing options. This has ratcheted up pressure on the pharmaceutical industry, which has argued licensing eviscerates intellectual property rights.

Last week, Interfarma, a trade group that represents drug makers in Brazil, issued a position paper opposing the proposal and argued there are already provisions in domestic laws and the WTO agreement that cover instances in which licensing can and should be pursued. The industry further maintained that incentives for innovation would be watered down, and also objected to automatic granting of licenses and a 1.5% royalty rate.

“Compulsory licensing does not promote the rapid transfer of knowledge to speed up production quickly. Instead, it increases the risk of misallocation of resources and prevents the efficient use of raw materials for this and other medicines. Weakening intellectual property protections can cause lasting damage, which would affect future innovations in all sectors of the economy and weaken the ability to sustain and rebuild national health systems in the face of the next crisis scenario,” Infarma wrote.

The pharmaceutical industry, meanwhile, faces another challenge. The World Health Organization director-general last week endorsed the idea of creating a voluntary pool to collect patent rights, regulatory test data, and other information that could be shared for developing drugs, vaccines, and diagnostics. Although the concept has drawn praise from several governments and advocates, Villardi argued the pool does not go far enough.

“The WHO strategy, although important, depends on Big Pharma’s good will to cooperate,” he wrote us. “Moreover, we have seen that voluntary licenses (issued by drug makers) have systematically excluded middle-income countries. In a context in which governments have to act quickly to prevent deaths, there is no time to waste waiting for the pharmaceutical industry to put their patents in this pool.”