Out-licensing: a practical approach for improvement of access to medicines in poor countries.

VIEWPOINT There is much disagreement between the pharmaceutical industry and advocacy groups about how to provide patented medicines in poor countries. While everyone agrees that access to medicines in developing countries should be improved, too often this shared sensibility is submerged by an excess of timid incrementalism by industry, and demagoguery by activists. Neither contribution is constructive, as evidenced by the rancour of the debate (with phrases such as " murder by patent " 1), which has distracted everyone from the only focus that matters from a humanitarian perspective—the urgent needs of the patients. Here, we propose a practical, consensus approach, which we advocate as authors based in a brand-name pharmaceutical company (MAF), a non-profit generics company (HdB), and public health and legal academia (AA). Specifically, we propose that, in appropriate instances, pharmaceutical patent holders should award out-licences (or voluntary licences) to generic manufacturers who agree to manufacture and supply medicines to poor, developing countries. Under the legally binding terms of these licence agreements, several generic manufacturers could compete against one another on price in poor countries, but would not be allowed to compete against the patent holder in rich countries, where revenues and the incentives for inventing new medicines would be undiminished. Use of out-licensing in this way separates these fundamentally different markets, promoting access to affordable medicines for the world's poor, while reaffirming patents as indispensable for successful pharmaceutical research. Contrary to conventional wisdom, pharmaceutical patents only rarely impede access to medicines in poor countries. Most pharmaceutical companies infrequently seek patents in poverty-stricken countries, because to do so is rarely profitable. 2 Thus, to allege that " patents [are]. .. a barrier in many places to accessing affordable medicines " 3 overstates the case. Nevertheless, the fact that patents could impede treatment access in developing nations, if only sometimes, is sufficient reason to resolve that problem. Doing so need not financially damage pharmaceutical companies, since Africa, the Indian subcontinent, and the poorer countries of Asia total only 1·2%, 1·3%, and 2·6% of the global pharmaceutical market, respectively, and the proportions are even smaller for the sales of patented medicines (calculations based on data from http://www.imshealth. com). Accordingly, most companies agree that provision of certain patented medicines at a discount or for free in poor countries is a humanitarian imperative, the value of which exceeds the minor revenues that are forfeited. However, these donations or discounts offer only limited, …