India’s Trade Pact with the UK: Dilution of Compulsory Licensing and High Prices of Patented Medicines

• India’s support for compulsory licensing to address high prices of patented medicines has been dilutionated by the India-United Kingdom Comprehensive Economic and Trade Agreement (CETA).

• The agreement’s intellectual property chapter, Article 13.6, acknowledges the preferable route to promote and ensure access to medicines is through voluntary mechanisms, such as voluntary licensing.

• India’s agreement to this provision would result in a dilution of its position on two critical issues: the use of compulsory licensing to address high prices of patented medicines and the need for advanced countries to transfer technologies to developing countries on “favourable terms” for industrialisation and carbon footprint reduction.

• The high prices of patented medicines are a serious anomaly of the patent system, due to excessive rent-seeking by patentees. Compulsory licensing can improve the affordability of high-priced medicines by facilitating the production of such medicines.

• India’s TRIPS-consistent Patents Act allows for the grant of compulsory license to anyone interested in producing a patented product in India, three years after the grant of a patent.

• However, voluntary licenses cannot ensure access to affordable medicines due to the weak bargaining position of domestic companies in developing countries vis-à-vis dominant pharmaceutical corporations.

• The CETA undermines India’s demand for technology transfer “on favourable terms” in several multilateral forums, which was first made through the United Nations General Assembly Resolution on the New International Economic Order (NIEO) in 1974.