Compulsory licensing and voluntary licensing are two distinct mechanisms that regulate the production of patented medicines. While compulsory licensing prioritizes public health and affordability, voluntary licensing maintains corporate control and market exclusivity. The proposed India–UK Comprehensive Economic and Trade Agreement (CETA) has raised concerns by promoting voluntary licensing, reducing patent transparency, and encouraging evergreening practices. Experts warn that such changes could limit access to affordable, life-saving medicines for millions in India and across the Global South.
Compulsory licensing is a legal provision under the TRIPS Agreement and the Indian Patents Act that allows the government to authorize the production of a patented product without the patent holder’s consent. It is typically used during public health emergencies or when essential medicines are either unaffordable or unavailable.
Example: In 2012, India issued a compulsory licence to Natco Pharma for Bayer’s patented cancer drug Nexavar, reducing its monthly cost from ₹2.8 lakh to around ₹8,800.
Voluntary licensing occurs when a patent holder (usually a pharmaceutical company) voluntarily grants permission to another manufacturer to produce a generic version of its medicine under specific terms and conditions, such as royalty payments and geographic restrictions.
Example: Gilead Sciences granted voluntary licences for the hepatitis C drug Sofosbuvir to selected Indian firms, but limited distribution to certain low-income countries, excluding several middle-income nations with high disease burdens.
The key differences between the two mechanisms lie in their initiation and purpose:
In short, compulsory licensing advances public interest and equity, whereas voluntary licensing preserves corporate control over pricing and access.
The proposed India–UK Free Trade Agreement (FTA) marks a shift from India’s established public health–oriented patent regime in three major ways:
The FTA promotes voluntary licensing as the preferred approach, discouraging governments from using compulsory licensing—even in serious public health emergencies.
Patent status disclosures, earlier required annually, would now be mandated only once every three years. This reduction in transparency makes it more difficult for public health advocates to demonstrate medicine shortages or unavailability.
The FTA’s call for “harmonization” with international patent systems risks undermining India’s Section 3(d)—a key safeguard that prevents patenting of minor drug modifications. This could allow pharmaceutical companies to extend monopolies without introducing genuine innovations.
The growing preference for voluntary licensing and reduced transparency could severely impact medicine accessibility and affordability. Key concerns include:
Together, these changes threaten to weaken India’s position as the “pharmacy of the Global South” and could hinder global access to affordable, life-saving medicines.
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