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China’s Compulsory Licensing

The Chinese government recently amended its intellectual property law to allow for compulsory licensing. Similar measures are on the books in many other companies, and it’s allowed under international patent law (WIPO) in cases of emergency or threats to public health. India recently did this to Bayer’s Nexavar. Thailand has used this provision more than once, and other countries (such as Brazil) have threatened it during negotiations with drug companies.
Pharmalot has more on the story, particularly with respect to Gilead and their dealings with the Chinese government over their HIV therapy Viread. As that piece says, China is particularly well suited (as is India) to follow through on such moves, since both countries have robust pharma manufacturing and generic drug business sectors.
I’m actually surprised that the Chinese government didn’t have these provisions in place before, though. It’s a useful negotiating tool, and I would expect them to avail themselves of everything available, since they are in such a good position to play hardball. Of course, they also have a huge amount of investment from multinational companies on the other side of such considerations – but they also have that huge market that the companies want access to. My guess is that last factor will, in the end, trump everything. There are many drugs, and many drug companies, but there’s only one Chinese market. And the only way to that market is through China’s one government, which means that companies (and not just drug companies) will continue to smile through gritted teeth and put up with pretty much anything.

11 comments on “China’s Compulsory Licensing”

  1. pete says:

    First thought: Yet another reason that drug prices keep increasing for you & me (– here in N America / Euro)

  2. PPedroso says:

    My question is:
    In a few years when the first innovative drugs start coming out of China and India, how will this problem will be handled on the other way around?
    Will, for instance, European Countries be able to do compulsory licensing for China new Drugs?

  3. SP says:

    I always laugh when people who complain about Obama being a socialist run into the real thing.

  4. darwinsdog says:

    If the shoe is ever on the other foot – I say hey we can’t be expected to pay the debt AND pay for their drugs

  5. Anon says:

    @2 My bet is not. If so they will threaten to tax pharma activity in their county. Which by that time, Companies outsourcing will be dependent on them.

  6. CMCguy says:

    My contention is this is only putting a legal stamp on the long known practices of Chindia companies that already produce illegitimate Patented drugs fro “black market”. It probably more about presenting an image of International compliance and opens door so they can sell such products cheaply to nations that do not have capabilities to make the drugs but also wish to obtain by Compulsory Licensing.

  7. Anonymous says:

    China-India bashing topic? c’mon guys, where is everybody today?

  8. jackgg says:

    Re@7:bbq on the beach, bla bla in the bars whiling taking 2 months off at this season.

  9. simpl says:

    Not just China: From 1969, the Commissioner of Patents in Canada could issue compulsory licences to import/manufacture and set royalties for drugs.

  10. Andy S says:

    This article’s (http://www.iam-magazine.com/blog/Detail.aspx?g=81a2f17d-97e1-484e-ac59-b68cf64a1e54) opinion is that the amendments are procedural clarifications rather than substantive changes to the law. Time will tell if the new procedures will facilitate/encourage compulsory licensing in China (or whether Reuters are sensationalising the issue).

  11. Anonymous says:

    The Chinese IP amendments add to the dangers of relying on the country’s fast-growing drug sales to make up for sluggish growth elsewhere. Big Pharma has been investing hundreds of millions at a time in new Chinese facilities, plus hiring thousands of new sales reps to take their products to the Chinese masses.

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