William Fry: Compulsory licences on the horizon for drugs and equipment?

William Fry: Compulsory licences on the horizon for drugs and equipment?

Laura Scott,
Colette Brady
and Sophie Delaney

William Fry partner Laura Scott, senior associate Colette Brady and trainee solicitor Sophie Delaney consider whether growing concerns about the availability of certain drugs and equipment in the midst of the COVID-19 pandemic will we see governments start to issue compulsory licences.

Concerns around the globe about the availability of certain drugs and equipment that may help in the treatment of the fast spreading COVID-19 (coronavirus) pandemic has led many governments to start issuing compulsory licenses or enacting legislation to make it easier to do so quickly if necessary.

The pandemic has given rise to unprecedented circumstances around the world leading to a major shortage of personal protective equipment (PPE) and ventilators, diagnostic kits, stock piling of drugs by certain countries, bans on certain exports and price gouging.

Compulsory licensing is an option that may be available for governments to ensure that generic versions of patented medicines and equipment are made available to its citizens. This right derives from a section of the World Trade Organization (WTO) agreement known as the Trade-Related Aspects of Intellectual Property Rights or “TRIPS”.

Developments across the globe


  • Canadian lawmakers this week passed a Bill that would make it easier to issue compulsory licences for COVID-19 products. Canadian law already permitted the government to issue compulsory licences but this Bill would speed up the process by allowing Canada to act faster to secure a licence in the face of a public health crisis. The Canadian Government can simply issue a licence to use immediately and negotiate terms and compensation with the company who holds the patent later.


  • Chile’s lower House of Congress passed a resolution that would allow its government to issue compulsory licences for any medicines, vaccines, or diagnostics to combat the pandemic. The resolution is not binding and whether the Chilean Government adopts the provisions remains to be seen.


  • The Israeli Government last week approved the licensing of a generic version of the anti-retrovirus drug “KALETRA” to treat patients infected with the coronavirus. The Government also issued a permit for the use of three Israeli patents covering KALETRA in order to import quantities of a generic version of the drug. The drug which is usually used to treat HIV, is being used to treat patients with Coronavirus, and its effectiveness is being studied in clinical trials, including one by the World Health Organization (WHO).
  • Israeli Patent Law permits the exploitation of a patent by, or for, the government in situations where the government finds that it is necessary in the interests of national security or the maintenance of essential supplies and services. The scale of the Coronavirus pandemic, coupled with information that AbbVie was not able to supply Israel with adequate quantities of the drug, were deemed sufficient grounds to justify the issuing of the permit. The compulsory licence was issued without consultation with AbbVie or the option of direct judicial review.
  • While AbbVie’s Patent for KALETRA in Israel ends in 2024, its patent rights had already expired in many other countries throughout the world or had not secured protection. Therefore, generic versions of the drug were already available but due to the scale of the pandemic were in increasingly short supply. Accordingly, the Israeli Government was of the view that it needed to act quickly to secure adequate supplies for its citizens.
  • The permit is narrowly defined and the exploitation of the KALETRA patents is confined to the importation of the generic KALETRA, for the sole purpose of treating patients infected with Coronavirus. The permit does not allow for the use of the generic version in the treatment of HIV but it is unclear how the Israeli government will stop such off-label use.
  • It has been reported that this is the first time in over 20 years these compulsory licensing powers have been used. While under the law the affected patentee, AbbVie, will be entitled to compensation, such terms will be determined at a later date.

Waiving rights

It has now been reported that AbbVie has since announced that it will not enforce its patent rights throughout the world over the KALETRA drug. AbbVie has become the first big drug maker to waive its rights to profit from a drug that might be used to treat the Coronavirus.

In contrast, Gilead Sciences was criticized this week by a number of media outlets for claiming ‘orphan status’ in the US for an experimental drug that is seen as a potential treatment for Coronavirus. Gilead has since rescinded that request.

In order to qualify for orphan designation from the European Medicines Agency (EMA) a medicine must meet a number of criteria including:

  • that it is intended for the treatment, prevention or diagnosis of a disease that is life threatening or chronically debilitating; and
  • the prevalence of the drug in the EU must not be more than 5 in 10,000; or
  • it must be unlikely that marketing of the medicine would generate sufficient returns to justify the investment need for its deployment.

Once a drug achieves orphan drug status from the EMA, the pharmaceutical company obtains a number of incentives (designed to encourage the development of such drugs for rare diseases). These incentives include 10-year market exclusivity once the medicine is on the market.

The legislation in Ireland

The Patents Act 1992 provides for a process to obtain a compulsory licence, however certain conditions must be satisfied. The patent must have been in existence for three years and one of the other key applicable conditions in the current climate is that the demand in the State for the subject matter of the patent must not be being met or is not being met on reasonable terms. Any licence granted shall be non-exclusive and predominantly for the supply of the market in the State. The Controller and ultimately the Court has the power to decide the terms of any licence.

Ordinarily an applicant for a compulsory licence needs to evidence that applicant sought to obtain a licence from the patent proprietor but has been unable to obtain one on reasonable terms and within reasonable time. However where there exists a natural emergency or other circumstances of extreme urgency, the requirement for such evidence can be dispensed with.

The Act also provides for a number of wide-ranging provisions as regards the use of inventions for the service of the State. These include the right to use the invention for any purpose which appears to the Minister to be necessary or expedient for, inter alia, the maintenance of supplies and services essential to the life of the community or for securing a sufficiency of supplies and services essential to the well being of the community.

Another legislative provision which may be particularly relevant given the number of pharmaceutical companies manufacturing in Ireland is Statutory Instrument 408/2008 under which a compulsory licence can be sought to permit the manufacture of pharmaceutical products in Ireland for exports to other countries with public health problems.

What next?

It is essential for all pharmaceutical and medtech companies who may have patent protected medicines and equipment which may be deemed essential or effective in the treatment of this pandemic to consider the ability of different governments to compulsory licence such drugs and equipment, the terms of such licence and the impact.

If you have any specific queries in relation to the COVID-19 virus, please get in touch with your regular William Fry contact.

William Fry: Compulsory licences on the horizon for drugs and equipment?

  • Laura Scott is a partner at William Fry, Colette Brady is a senior associate and Sophie Delaney is a trainee solicitor.
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