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June 11, 2012
China's Compulsory Licensing
The Chinese government recently amended its intellectual property law to allow for compulsory licensing. Similar measures are on the books in many other companies, and it's allowed under international patent law (WIPO) in cases of emergency or threats to public health. India recently did this to Bayer's Nexavar. Thailand has used this provision more than once, and other countries (such as Brazil) have threatened it during negotiations with drug companies.
Pharmalot has more on the story, particularly with respect to Gilead and their dealings with the Chinese government over their HIV therapy Viread. As that piece says, China is particularly well suited (as is India) to follow through on such moves, since both countries have robust pharma manufacturing and generic drug business sectors.
I'm actually surprised that the Chinese government didn't have these provisions in place before, though. It's a useful negotiating tool, and I would expect them to avail themselves of everything available, since they are in such a good position to play hardball. Of course, they also have a huge amount of investment from multinational companies on the other side of such considerations - but they also have that huge market that the companies want access to. My guess is that last factor will, in the end, trump everything. There are many drugs, and many drug companies, but there's only one Chinese market. And the only way to that market is through China's one government, which means that companies (and not just drug companies) will continue to smile through gritted teeth and put up with pretty much anything.
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