GSK acknowledges that compulsory licenses (CLs) are one of the flexibilities in TRIPs and that their sparing use
can be appropriate. However, as the DG of the WHO, Margaret Chan, acknowledged in January 2007, “We have
to find a right balance for compulsory licenses. We can't be naïve about this. There is no perfect solution for
accessing drugs in both quality and quantity''. Compulsory licensing is an option not a solution.
– Systematic use of CLs weakens the intellectual property (IP) system. The IP system underpins the ability of the
private sector to undertake the R&D that is essential if we are to see advances in treatments and vaccines for
diseases of the developed and developing world. The more the IP system is weakened, the less R&D is likely.
Widespread use of CLs may, therefore, contribute to a reduction in R&D.
– Innovative companies are less likely to launch products in markets with weak IP systems as generic companies
are more likely to undermine the returns in those markets. Without local launch of the innovative product, generic
companies may not be able to obtain “piggy back” approvals to sell their products. And even if they do, they
rarely provide the post-launch product support, education and surveillance which innovators provide. Excessive
use of CLs may, therefore, deny or delay patients’ access to innovative products and undermine the introduction
of good quality generic versions in the longer term.
– CLs can reduce incentives for Foreign Direct Investment, including technology transfer. Their excessive use is
indicative of a weak intellectual property system generally and can undermine the confidence of foreign investors
across all industrial sectors.
– GSK welcomed the 31f Agreement reached by the WTO in December 2005 as a reasonable compromise. It
provides a workable solution for compulsory licensing for export in the rare cases where this is needed to
address healthcare crises in countries without manufacturing capacity.