Slides discussing the ethical issues surrounding the practice of compulsory licensing of drugs.

1. Ethical Issues in Compulsory
Licensing of Drugs
Soraj Hongladarom
Department of Philosophy and Center for
Ethics of Science and Technology
Chulalongkorn University

2. Background
Last year the Ministry of Public Health
announced ‘compulsory licensing’ of three
drugs—one for heart disease and two for
HIV/AIDS. The announcement created a
worldwide reaction.
Early this year the Ministry announced CL of
another drug for cancer, just a few days
before the minister went out of office.

3. What is Compulsory
Licensing?
When an inventor invents something, he can
apply for protection for his invention so that
he gets benefits from the invention for a
period of time. The protection is called
‘patent.’
Having a patent means that the inventor is
the sole beneficiary of the proceeds accrued
from the invention. Anybody else who would
like to use the patented invention has to pay
royalties to the patent owner. This is called
‘licensing.’

4. Compulsory Licensing
However, in an emergency, national
governments have the right to
announce a ‘compulsory licensing’ (CL)
of certain patented product to relieve
the emergency.
This is allowed under the Trade Related
Intellectual Properties under the World
Trade Organization.

5. Compulsory Licensing (2)
In announcing the CL, governments have to
do the following before the announcement:
Notify the patent owner of the reasons for the
announcement and negotiate for a deal that is
agreeable to both sides (‘Voluntary licensing’).
Pay the patent owner a reasonable amount of
compensation after the announcement of CL.
The WTO rules say that it is the national
government’s judgment whether the situation
in their country was an ‘emergency’ or not.

6. Arguments in Favor
The announcement of CL was
necessary because the prices of the
drugs were much too high for the
government to afford according to the
universal health insurance scheme.

7. Counter-argument
Thailand should pay more to protect the
health of their own citizens. Drug prices
can be negotiated with the
manufacturers and patent holders.
If the health of their population is vital,
then the government should invest
more and more importantly invest more
in prevention schemes.

8. Argument in Favor
Announcing compulsory licensing is
completely in accordance with the WTO
rules.

9. Counter-argument
On the other hand, the issue is not
whether it complies with the WTO rules,
but whether it is ‘appropriate.’

10. Argument in Favor
The situation in Thailand regarding
HIV/AIDS, heart disease and cancer is
really an emergency and poses
significant threats to the public health
of the country.

11. Counter-argument
Heart disease is not an emergency,
because it is not communicable and
those who have it are likely to be in the
middle class and thus can afford the
patented drug.

12. Argument Against
In announcing CL, the Thai government
shows that it does not respect intellectual
property rights. This is made more serious by
the government’s apparent lax enforcement
of copyright laws.
Microsoft (Thailand) announced that around
80 percent of Microsoft software used in this
country is pirated. The company plans to
reduce the number to 70% within three
years.

13. Counter-argument
Thai government does respect IP’s, as
can be seen from the Copyright Act,
establishment of the Department of
Intellectual Property Rights and other
measures. (The issue is not with the
law or the government, but the
mentality of the people.)

14. Argument Against
By doing this, the government is
sending a signal that it prefers to be the
net consumer of pharmaceutical
products and does not want to become
a producer.

15. Counter-argument
To become a producer of new drug is very
arduous. The technology required is very
high, so the playing field is not level at the
beginning. If the international organizations
really want Thailand to become producers
and thus respect IP’s more, they should
encourage more technology transfer from the
big international pharma companies.