The Impact of India-UK CETA Agreement on Access to Medicines

SYNOPSIS

Compulsory and voluntary licensing are two distinct mechanisms for authorizing the production of patented medicines. While compulsory licensing prioritizes public health and affordability, voluntary licensing protects corporate control and market exclusivity. The proposed India–UK Comprehensive Economic and Trade Agreement (CETA) raises concerns by favoring voluntary licensing, diluting patent transparency, and enabling evergreening practices. Experts warn that this shift could restrict access to affordable, life-saving drugs for millions in India and across the Global South.

FAQs

1. What is Compulsory Licensing?

Compulsory licensing is a legal provision under the TRIPS Agreement and the Indian Patents Act that allows the government to permit the production of a patented product without the consent of the patent holder. It is typically used during public health emergencies or when essential drugs are unaffordable or unavailable.

Example: In 2012, India issued a compulsory licence to Natco Pharma for Bayer’s patented cancer drug Nexavar, reducing the monthly cost from ₹2.8 lakh to around ₹8,800.

2. What is Voluntary Licensing?

Voluntary licensing occurs when the patent holder (usually a pharmaceutical company) grants permission to a manufacturer to produce a generic version of its medicine under specific terms and conditions, such as royalty payments and geographic limitations.

Example: Gilead Sciences granted voluntary licences for the hepatitis C drug Sofosbuvir to a few Indian firms but restricted sales to certain low-income countries, excluding many middle-income nations with high disease burdens.

3. How Do Compulsory and Voluntary Licensing Differ?

The two systems differ mainly in who initiates them and their public objectives:

• Compulsory Licensing: Initiated by the government without the patent holder’s consent, ensuring access to affordable medicines during crises or when monopolies restrict supply.
• Voluntary Licensing: Initiated by the patent holder, often involving selective permissions with royalties and geographic limits.

In essence, compulsory licensing supports public interest and equity, while voluntary licensing preserves corporate control over pricing and access.

4. How Does the India–UK FTA Depart from Existing Safeguards?

The proposed India–UK Free Trade Agreement (FTA) diverges from India’s current pro-public-health patent framework in three major ways:

i) Preference for Voluntary Licensing over Compulsory Licensing

The FTA promotes voluntary licensing as the default mechanism, discouraging governments from invoking compulsory licensing—even during serious public health emergencies.

ii) Reduced Transparency Obligations

Patent status disclosures, which were previously required annually, would now be mandated only once every three years. This weakens transparency and makes it harder for public health advocates to demonstrate drug unavailability.

iii) Weakening of Anti-Evergreening Provisions

The FTA’s emphasis on “harmonization” with global patent systems risks diluting India’s Section 3(d)—a safeguard that prevents patenting of trivial modifications. This could enable companies to extend monopolies without genuine innovation.

5. Why Is This Shift a Concern for Medicine Access?

The growing preference for voluntary licensing and reduced transparency poses serious risks to public health. Key concerns include:

• Limited geographic access under voluntary licences
• Retention of corporate control over drug pricing
• Diminished oversight due to weaker patent transparency
• Facilitation of patent evergreening through weakened Section 3(d)
• Reduced government ability to ensure affordable medicine access

These combined factors could significantly undermine India’s role as the “pharmacy of the Global South” and jeopardize access to affordable medicines for millions worldwide.