Study urges compensation-based approach to drug patent compulsory licensing

In the USA, a Penn State researcher has argued that ambiguous international rules,which outline when and how governments may "break" pharmaceutical patents may end up significantly reducing the incentives for innovation while, at the same time, failing to increase access to medicines.

In a new paper, titled Confronting Myths and Myopia on the Road to Doha, Daniel Cahoy, associate professor of business law at Penn State's Smeal College of Business, argues that the problem is a lack of clarity in compensation for patent owners. He suggests that a three-tiered approach to compulsory license remuneration in this sector, based on a country's individual ability to pay, would do much to resolve the predicament.

Current international law "has few limitations on which countries can 'break' patents simply to control costs, what circumstances create a necessary condition, or even what level of remuneration is required," Dr Cahoy writes. As a result, he says, relatively wealthy nations may receive unintended windfalls while least developed countries may continue to struggle for access to medicines.