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Patents: Do companies license products on terms that facilitate access?

How companies manage their intellectual property (IP) impacts the availability and affordability of medicines, most significantly when they facilitate generic medicine manufacturers in bringing cheaper versions into new markets.

This impact has been demonstrated most clearly in the global market for HIV/AIDS medicines. Pharmaceutical companies have an obligation to manage their IP rights responsibly, to ensure they do not limit access to medicine for poor and vulnerable populations.

What the Index assesses
  1. Patent transparency: Do companies publish the patent status of products in all countries in scope of the Index? 
  2. Responsible patenting policies: Do companies publicly pledge to waive or not enforce patent rights in low- and middle- income countries, including for products that have not yet reached the market?
  3. Voluntary licensing: Do companies issue licences on terms that promote access, for example by granting licensees permission to source active ingredients from any supplier?
  4. Trade policy: Are company approaches to internationally agreed flexibilities for intellectual property (IP) intended to safeguard public health?


    Striking shift in patent transparency

    Today, almost all companies evaluated (17 out of 20; all except Bayer, Boehringer Ingelheim and Sanofi) disclose at least some information about their patents. This is a marked improvement. Only four companies went this far in 2016 (AstraZeneca, Gilead, Merck KGaA and Novo Nordisk).

    Figure: No. of companies that share patent info

    Of these 17 companies, 15 disclose patent information through the Pat-INFORMED online database, an initiative of the World Intellectual Property Organization (WIPO).

    Such transparency supports the entry of generic medicines into markets, allowing procurers greater confidence in selecting generic alternatives to patented products. This in turn leads to a larger, more secure supply and more affordable prices.

    New companies pledge not to enforce patents in poorer countries

    15 companies (up from 13) now publicly pledge neither to file for or enforce patent rights in Least Developed Countries. These companies apply their pledges to all products for at least the diseases, conditions and pathogens covered by the Index. Four companies go further than others, extending their commitments to some lower-middle income countries (AstraZeneca, Boehringer Ingelheim, Daiichi Sankyoand Merck KGaA). 

    Daiichi Sankyo and Takeda are the most recent companies to make public pledges, leaving only AbbVie, Bayer, Gilead, Pfizer and Sanofi to yet publish such pledges.

    Two more compounds covered by voluntary licences

    Voluntary licences and non-assert declarations give generic manufacturers permission to develop and manufacture versions of on-patent products under transparent and access-friendly terms, which can support affordability. 

    The Index has identified 18 compounds that are covered by voluntary licences issued by six companies (AbbVie, Bristol-Myers Squibb, Gilead, GSK, Johnson & Johnson and Merck & Co., Inc.), while a further two compounds are covered by non-assert declarations via Boehringer Ingelheim and Johnson & Johnson. As in 2016, such licences and declarations are used only for HIV/AIDS (15 compounds) and hepatitis C medicines (5 compounds).

    Figure: No. of new compounds covered by voluntary licences

    Compared to 2016, two more compounds have been added*: Gilead’s bictegravir for HIV/AIDS and voxilaprevir, which forms part of a new fixed-dose combination for hepatitis C (sofosbuvir/velpatasvir/voxilaprevir [Vosevi®]). Gilead’s bictegravir was licensed before market approval, making it available to manufacture by third parties. This combination is pangenotypic, with the associated benefit of removing the need for genotyping, a constraint particularly felt in low-income settings. 

    *In November of 2018 AbbVie announced the application of a non-exclusive voluntary licence to support extended access to two additional compounds, glecaprevir and pibrentasvir (Mavyret™) through the Medicines Patent Pool.

    Two companies expand licences to cover MICs

    The Medicines Patent Pool (MPP), a key body driving access-oriented licensing, continues to be the central independent driver of access-oriented licensing in the pharmaceutical industry. Licences agreed via the MPP include the majority of the access-oriented terms and conditions looked for by the Index. Non-exclusive licences agreed outside of the MPP include an average of five out of eight of such access-oriented terms. They most commonly do not include waivers on data exclusivity. Out of the 20 licensed compounds captured by the Index, 13 were negotiated via the MPP.

    Middle-income countries (MICs) with large populations in need are often excluded from licence scopes. Since 2016, two companies have expanded the geographic scope of their licences to include such MICs. Bristol-Myers Squibb’s licence for atazanavir (Reyataz.), indicated for HIV/AIDS, now includes 12 new countries, eight of which are MICs: Egypt, Equatorial Guinea, Indonesia, Morocco, Philippines, Tunisia, Ukraine and Vietnam. Gilead has announced the expansion of both its HIV/AIDS licences negotiated via the MPP and its bilaterally agreed HCV licences to include two additional MICs in scope: the Philippines and Ukraine.

    Limited support for the flexibilities in the international IP system

    The pharmaceutical industry remains hesitant to endorse the rights of national governments to deploy IP systems flexibly when there is a need to do so. This is shown in companies’ limited public support for the flexibilities in the international IP system (as set out in the WTO's 2001 Doha Declaration on the TRIPS Agreement and Public Health). The TRIPS agreement includes flexibilities for WTO member states to (amongst other things) set aside patent rights to protect public health.

    AstraZeneca sets itself apart from the pack, acknowledging that countries are free to determine what constitutes a ‘public health emergency’. Merck KGaA also adopts a more constructive stance, acknowledging that it is the right of countries – provided criteria are fulfilled such as engagement with the rights-holder – to determine the grounds for issuing compulsory licences. All 20 companies are members of trade associations that have taken positions not fully aligned with the international consensus on IP and public health.


    Learn more

    View our detailed overview of each company’s performance in the Index, including breakdowns of their product portfolios and R&D pipelines.