US lobby group pressures Greek government to introduce compulsory licensing of drugs

20 March 2013

The Pharma Letter

US lobby group pressures Greek government to introduce compulsory licensing of drugs
Article | 19 March 2013

USA-based not-for-profit lobby group Essential Inventions has written to Greek Health Minister Andreas Lykourentzos, calling on the government of Greece to emulate that of India to implement compulsory patent rules. It is requesting both a cooperative agreement and a non-voluntary authorization to use patents on pharmaceutical drugs for cancer, HIV/AIDS and other diseases and conditions under Article 14 of the Greece patent law.
The action comes as Greek patients complain about difficulties in obtaining affordable health care as the country struggles to meet austerity measures to overcome its budget crisis, and the pharmaceutical industry in Greece – which has already suffered a number of drug price reductions – now has arrears totaling 2 billion euros ($2.6 billion), and a loss of 1 billion euros as a result of the Private Sector Involvement (PSI) deal agreed as part of Greece’s 130 billion-euro bailout (The Pharma Letter March 11).

The group, which also has offices in Europe, said in the letter: “We propose to secure and import to Greece affordable high quality pharmaceutical drugs for cancer, HIV/AIDS and other diseases and conditions.” It proposes the following cooperative agreement:

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1) The Ministry for Health and Social Solidarity identifies patented pharmaceutical and biologic drugs that are not currently available in adequate supplies at affordable prices in Greece.
2) Essential Inventions enters into negotiations with its suppliers in India, Canada and other countries, and identifies the products that it can supply, the timetable for such supply, and the prices for generic or biosimilar versions of the patented products.
3) Upon agreement of the quantities, timetables and prices, the Ministry gives notice that it will be providing a non-voluntary license to use patents under Article 14 of the Greek patent law.
4) Essential Inventions agrees to contact the firms currently selling the patented products to inform them of the pending non-voluntary license, and to propose terms for compensation for the use of the patent, beginning with the 2005 World Health Organization (WHO) Tiered Royalty Method.

Benefits of the proposal

Essential Inventions is proposing to directly address the challenge of obtaining adequate and affordable supplies of generic versions of drugs that are currently subject to patent protection in Greece.

One alternative to this approach is to negotiate lower drug prices from patent holders. For Greece, this is a challenging and sometimes ineffective approach, in part because patent holders are reluctant to influence other country reference pricing norms or have lower priced drugs enter into parallel trade for other European countries. The compulsory licensing alternative has several benefits to both Greece and the patent holders.

For Greece, the ability to acquire products from generic suppliers around the world makes it far easier to obtain affordable versions of drugs protected by patents. In a number of cases, generic versions can be obtained in bulk for 10% to 1% of the prices typically charged for European consumers by patent holders. And, while patent holders will lose their monopoly in the Greek market, they will benefit both from royalties on the generic versions and from a curtailment of parallel trade to other European markets, since the generic versions obtained under a compulsory license would be considered infringing products in other European countries.