It is a tremendous victory for people living with HIV in Indonesia that it has issued new compulsory licenses on seven anti-retroviral medicines, allowing the government to access generic versions of those medicines – domestically or by importation – at much cheaper prices. Indonesia now stands at the head of the pack of countries that have stood up to Big Pharma’s corporation power and to the trade and diplomatic pressure exerted by US and EU powers that consistently advance the IP monopoly rights of pharmaceutical multinationals. A little discussed aspect of the government’s compulsory license is that certain Indian generic producers will be able to supply Indonesia’s purchase of Gilead’s tenofovir + emtricitabiine and tenofovir + emtricitabine + efavirenz because of smart provisions in the Medicine Patent Pool’s voluntary license with Gilead.
People might remember that Indonesia was included within the territory of the license granted by Gilead to the Medicines Patent Pool in 2011 and was one of only two such countries (India being the other one) that had even a putative, though weak, patent claims by Gilead. That license properly received substantial criticism because of its exclusion of the vast majority of middle-income countries including all of Latin America, most of Asia, and all of North Africa and Eastern Europe/Central Asia, but the license include some favorable terms as well.
A unique feature of the Gilead/MPP license was that licensees could renounce or unbundle licenses to particular ARVs while retaining rights to others. Another feature was that Gilead/MPP generic sublicensees can lawfully produce for non-licensed territories when a compulsory license has been issued. Pursuant to the first provision, several generic sub-licensees renounced a license for tenofovir, in part so they could supply many additional countries where tenofovir is not patented. This, however, threatened their ability to supply tenofovir to Indonesia because of the putative tenofovir patent in Indonesia.
Fortunately, the Indonesia compulsory license overcomes even that weak patent bar and thus allows any non-patent blocked generic supplier to produce and/or to import the ARV to Indonesia. This flexibility extends to the MPP sublicensees who renounced the tenofovir license but who benefit from the CL-TRIPS flexibility clause in the Gilead/MPP license – they too retain freedom to supply Indonesia’s CL without threat of legal retaliation from Gilead. Because the Indonesian compulsory licenses extend to emtricitabine and efavirenz as well, those sub-licenses can now supply tenofovir + emtricitabine and tenofovir + emtricitabine + efavirenz as well.
This example shows the importance of negotiating voluntary license terms that allow rejection of license rights on certain medicines while retaining rights to others. It shows even more the importance of assuring that voluntary licensees remain free to serve as licensees of compulsory licenses – in other words, that the terms of a voluntary license do not interfere with countries’ lawful rights to use TRIPS flexibilities and to select generic suppliers of their choice. Indeed, being able to choose licenses who already have access to significant markets means that the country issuing the CL can benefit from lower prices associated with generics having already achieved economies of scale.