The Justification for Compulsory Licenses

The third article of the Universal Declaration of Human Rights holds that everyone has the right to life, liberty, and security of person. These rights are assigned upon birth and so it should then hold that this right is to be protected by the government. However, countless individuals in less developed countries are denied these rights. Instead of being granted the right to life, they are dying from diseases due to poor health care and the inability to access essential medicines. Members of affluent nations must consider how we can help the global poor in advancing their access to medicine. Compulsory licensing, which allows someone else to produce the patented product without the consent of the patent owner,[i] “…can fix the problem generated from the indiscriminate enforcement of property rules through patent laws.”[ii] In this post, I will argue that compulsory licensing is justifiable when it is used to counteract the imbalance of benefits and costs that are inflicted on the poor when pharmaceutical companies choose to maximize profits by selling medicines at exorbitant rates.

Studies show that a “…pharmaceutical firm with unconstrained pricing power will maximize profits by selling a greater quantity at a relatively affordable price in economies with a fairly equitable income distribution, but will maximize revenues in less equitable economies by selling a smaller quantity at a higher price.”[iii] Evidently, essential medicines for the global poor, even if they are available, are rarely obtainable when pharmaceutical companies are focused on maximizing profit. When this is the case, compulsory licensing should be justifiable on the grounds that it provides an equal opportunity for the poor to gain access to essential drugs that could save their lives. Without compulsory licenses, which promote competition amongst generic medicine producers, the poor would not be able to get medicine at the lowest prices in developing nations. Thus, it should hold that compulsory licensing is justifiable in nations where the poor suffer from the imbalance of benefits and expensive costs inflicted by pharmaceutical companies.

References:

1. [i] "WORLD TRADE ORGANIZATION." WTO. Web. 15 Feb. 2015.
2. [ii] Flynn, Sean, Aidan Hollis, and Mike Palmedo. "An Economic Justification for Open Access to Essential Medicine Patents in Developing Countries." The Journal of Law, Medicine & Ethics: 184-208. Print.
3. [iii] Flynn, Sean, Aidan Hollis, and Mike Palmedo. "An Economic Justification for Open Access to Essential Medicine Patents in Developing Countries." The Journal of Law, Medicine & Ethics: 184-208. Print.