American Journal of Law & Medicine

Compulsory licenses: a tool to improve global access to the HPV vaccine?(Symposium)


Cervical cancer disproportionately affects women in lower- and middle-income countries. But the new vaccines developed to prevent infection with some strains of the human papillomavirus (HPV) that cause cervical cancer are priced beyond the reach of most women and health agencies in these regions, due in part to the monopoly pricing power of brand-name companies that hold the patents on the vaccines. Compulsory licenses, which authorize generic competition with patented products, could expand access to HPV vaccines under certain circumstances. If high-quality biogeneric HPV vaccines can be produced at low cost and be broadly and efficiently registered, and if Merck and GSK are unwilling to grant licenses on a voluntary basis, compulsory licensing could play a pivotal role in ensuring vaccinations against HPV are available to all, around the world, regardless of ability to pay.


Cancer is the third leading cause of female deaths worldwide and cervical cancer is the fifth deadliest form of cancer in women. (1) Every year about half a million women are diagnosed with the disease, and more than a quarter of a million die from it. (2) But the burden of cervical cancer is not shared equally among women from all corners of the globe. More than 85 percent of new cervical cancer cases occur in lower- and middle-income countries. (3) Notably, cervical cancer is the leading cause of cancer deaths among women in the African and South East Asia regions, while it is the tenth most common cause of cancer deaths among women in high-income regions and countries like the United States, Canada, Japan, and the countries of the European Union. (4) The extremely high morbidity from cervical cancer among women in the developing world is largely attributed to the absence of regular and effective pre-cancer screening and treatment services. (5)

The good news is that two recently developed vaccines appear, so far, to be highly effective at preventing infection with the two strains of the human papillomavirus (HPV) that cause 70 percent of cervical cancer. (6) The bad news is that these vaccines, GlaxoSmithKline's (GSK) Cervarix[R] and Merck's Gardasil[R], are much more expensive on average than other vaccines, and are too expensive to facilitate widespread global vaccination against HPV. The three-dose series of Gardasil costs $360 in the United States and other industrialized countries. One study found that the vaccine would only be cost-effective in Brazil, an upper middle-income country, at a dramatically reduced price of $25 per person. Countries where the per capita gross domestic product was less than $1000 would require a price as low as $3-$6 per person to be cost-effective and affordable. (7)

Other factors, including inadequate health financing and infrastructure, may also reduce access to the vaccines. But lowering prices is a necessary, if not sufficient, condition for improving access. (8) Unless the HPV vaccines are made available at a significantly lower price to developing country procurement agencies and other purchasers, it is extremely unlikely they will become available to women in low- and middle-income countries on a widespread basis.

The high prices of the HPV vaccines are a result of the pricing decisions of GSK and Merck, the brand-name pharmaceutical companies that hold patent monopolies on the two new products. Governments confer patents intellectual property rights to prevent others from using or selling a new technology for twenty years--in order to reward, and thus encourage, innovation. (9) But when a patent gives a pharmaceutical company exclusive control of a medicine, prices start high, and generally stay high. (10) Some people who cannot afford or access the vaccine will grow ill, and some will die. Fortunately, international law provides a safeguard, in the form of an underutilized tool called a compulsory license.

Compulsory licenses authorize price-lowering competition for products that remain on patent (also referred to as "brand-name" products), in exchange for a royalty payment to the patent holder. Under international law, either the authorizing government or a private company or organization may manufacture and provide a compulsorily licensed pharmaceutical product, and it may be manufactured for domestic use, imported, or, with certain conditions met, exported. Government programs, private sector pharmacies, or both, may supply the generic products to patients, depending on the terms of the compulsory license.

For example, in 2003, Malaysia issued government use compulsory licenses on three patented AIDS medicines, and began importing generic versions of the drugs from India. (11) The generics reduced the cost to the Malaysian Ministry of Health of treating an HIV/AIDS patient by 81 percent--from $315 to $58 per month. The savings enabled Malaysia to increase the number of HIV/AIDS patients it treated in government hospitals from 1,500 to 4,000.

There are many other examples. In recent years, Indonesia, Mozambique, Zimbabwe, South Africa, Eritrea and Zambia have each issued compulsory licenses to promote access to medicines. (12) Brazil, in addition to issuing a compulsory license on the AIDS drug efavirenz in 2007, negotiated discounts between 40 and 65 percent on nelfinavir, imatinib, efavirenz, tenofovir and lopinavir/ritonavir between 2001 and 2007 against the backdrop of threatening to issue compulsory licenses. (13)

Historically, the introduction of generic competition has been the most effective way to reduce the price of medicines. Typically, as the first generic competitors enter a market, prices fall, and continue to fall over time as more competitors enter. One study showed that after generic versions of medicines enter the U.S. market, prices fall on average between 40 and 80 percent, depending on the number of firms entering the market. (14)

Over the last ten years the world has witnessed a revolution in global HIV/AIDS treatment, with three million people gaining access mostly to the older first-generation treatments once priced far beyond people's and health agencies' ability to pay. Treatments that once cost over $10,000 per person, per year, are now available in generic form for $100, and sometimes less. The widespread availability of generic copies, and the effect of competition on brand-name prices, made this possible. (15)

Whether we are likely to see a similar pattern develop in HPV vaccine access may depend on whether effective alternatives to the Merck and GSK products--namely, biogenerics (16) or second-generation vaccines (17)--can be introduced, creating competition. Merck and GSK may establish tiered pricing programs with somewhat lower prices for low-income markets, and other voluntary initiatives such as vaccine donation programs could expand access to the HPV vaccines. (18) But donations will not satisfy global need, and voluntary price reductions rarely yield prices as low as competition can drive them. If competitive generic vaccines can eventually be produced, then competition will likely be the best way to generate low prices, and lower them further with time. Patent licensing--whether through voluntary agreements with Merck and GSK or compulsory licenses issued by governments--will authorize this competition.

Issuing compulsory licenses for domestic use is usually procedurally simple. The conditions required to issue licenses are occasionally exaggerated, due to both limited public understanding of the tool and the vested financial interests of major pharmaceutical firms. In fact, however, countries are free under World Trade Organization (WTO) rules to issue compulsory licenses at any time to protect public health.

Issuing licenses for export can be more complicated, and in the case of widely distributing generic HPV vaccines, would probably be necessary, as the vaccines are likely to be patented in potential manufacturing countries. The WTO maintains an export-licensing regime that many health advocates have criticized as needlessly complex. (19) All the same, manufacturing countries and importing countries have the right to enter agreements and issue export compulsory licenses to address public health needs. (20)

If manufacturing and registration issues can be resolved, and vaccine makers can offer generic vaccines at sufficiently low prices, compulsory licensing could be an important tool to facilitate widespread access to HPV vaccines in many developing countries. Lower prices would enable governments and humanitarian agencies to purchase far greater quantities of the vaccines, and vaccinate many more young adolescent girls against HPV.

Section II outlines the international legal basis for issuing compulsory licenses to promote access to generic medicines and vaccines in developing countries. Section III outlines two threshold questions--pertaining to patent status and vaccine availability--that must be addressed before a determination can be made as to whether compulsory licensing of the HPV vaccine is an appropriate tool to promote generic competition. Section IV provides a how-to guide to assist developing countries in issuing compulsory licenses for domestic production, import or export of generic HPV vaccines, and addressing common challenges that arise during this process. We believe the analysis in Section IV is also useful as a guide for the compulsory licensing of other medical products.


The WTO's 1995 Agreement on Trade-Related Aspects of Intellectual Property (TRIPS) and the 2001 WTO Doha Declaration on the TRIPS Agreement and Public Health guarantee that, under international law, all WTO member countries have the right to issue compulsory licenses on patented medicines and other health-related inventions. (21)

The TRIPS Agreement requires all 151 WTO member countries (22) to adopt strict U.S.-style patent rules for all products, including pharmaceuticals. Prior to the adoption of TRIPS, many countries--in particular developing countries--did not issue or enforce product patents or limited patent holders' rights on essential goods like medicines and food, because patents on these types of goods were widely seen as being against the public interest. Despite serious reservations about adopting a U.S.-style patent regime, developing countries agreed to adopt TRIPS in exchange for the public health guarantees included in the agreement, including the right to issue compulsory licenses allowing import or domestic production of generic medicines. (23) TRIPS also created a significant problem by limiting the rights of countries and generics firms to export drugs manufactured under compulsory license. TRIPS initially required licenses to be issued primarily to serve the domestic market (a requirement since waived with imperfect but workable export procedures). Such a limitation could render local production of a generic drug uneconomical even if it would be legally permissible to do so. Without economies of scale--often created by the availability of export markets--it would not be economically feasible to produce a generic drug. (24)

Following the adoption of TRIPS in 1995, the novelty of the agreement and its hard-to-understand text left developing countries uncertain of their right to promote access to essential medicines. Clearly, there were conflicting understandings as to how developing countries could implement the sections relating to pharmaceutical patents, and several high profile trade disputes arose between wealthy and developing countries when the latter tried to adopt or use seemingly TRIPS-compliant measures to lower medicine prices. (25)

The WTO's unanimous 2001 Doha Declaration made it absolutely clear that developing countries have the right to use compulsory licensing and other flexibilities to promote public health under TRIPS. Specifically, Paragraph Four of the Declaration affirms that WTO members may use "to the full" the flexibilities in the TRIPS Agreement "to protect public health and, in particular, to promote access to medicines for all." Paragraph Five of the Declaration laid out the key measures and flexibilities provided by TRIPS, including that each member country "has the right to grant compulsory licenses and the freedom to determine the ground upon which such licenses are granted." (26)

The Doha Declaration also created new rights for the poorest developing countries by allowing those categorized as Least-Developed Countries (LDCs) to delay the introduction or enforcement of pharmaceutical patents and the protection of undisclosed test data until at least 2016. Member countries failed, however, to resolve the question of whether and how to permit the production of generics for export under compulsory license.

Member countries attempted to resolve the compulsory license for export question two years later. An August 30, 2003 order of the WTO General Council waived the requirement that drugs manufactured under compulsory license be primarily for the domestic market when certain procedural requirements are met. (27) The procedural requirements, and common challenges that arise when issuing compulsory licenses, will be discussed in more detail in Section IV of this paper.

In spite of the Doha Declaration and increasing use of compulsory licenses, the brand-name pharmaceutical industry and a number of individuals and interest groups--some of whom have undisclosed ties to the industry (28)--oppose the issuance of compulsory licenses by developing countries, and in particular by middle-income developing countries like Thailand and Brazil. These actors sometimes mistakenly contest the scope of compulsory licensing rights or misrepresent the factual details surrounding the issuance of compulsory licenses.

For instance, after Thailand issued three compulsory licenses for two newer HIV/AIDS treatments and one treatment for heart disease in late 2006 and early 2007 in order to provide these drugs to the poor within its much-lauded public health system, individuals, interest-groups and even some U.S. congressmen, portrayed Thailand as having violated several TRIPS requirements. The inaccurate arguments against Thailand's actions included that the licenses were unlawful because compulsory licenses should only be issued in cases of public health emergency, and that compulsory licenses should be limited to drugs for HIV/AIDS and other communicable diseases. (29) But TRIPS does not limit the grounds on which compulsory licenses may be issued or the health problems for which compulsory licenses can be used. (30) Moreover, governments in many countries use compulsory licenses frequently for a wide variety of products, including but not limited to medicines, and in a wide variety of circumstances (31) For example, in 2006 alone, at least four U. …

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