Analysis of the impact of compulsory patent licensing on technological innovation in health

Abstract

The compulsory licensing of patents, provided for in Brazilian legislation since 1996, is a legal instrument that allows the government to authorize the manufacture of patented medicines in emergency situations or in the public interest, promoting access to health. The case of the antiretroviral efavirenz (2007) in Brazil is emblematic: the measure resulted in savings of more than US$ 100 million for the SUS and expanded treatment from 75,000 to 105,000 patients. On the other hand, for critics of this legal instrument, compulsory licensing would reduce the incentive for innovation, by supposedly reducing the profits made from exclusive patents. Using the methodology of a literature review, the aim of this article is to investigate whether compulsory licensing of patents can be considered an obstacle to technological innovation in health, concluding from the Brazilian experience with efavirenz (EFV) that the instrument of compulsory licensing of patents not only does not harm, but can actually foster innovation, provided it is accompanied by investments in research and development aimed at strengthening the local technological base and reducing dependence on imports.