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Compulsory Licensing: Discussion is Ongoing

The issue of compulsory licensing of pharmaceutical products is again on the agenda. And although this April the government considered development of the corresponding project not appropriate, the mechanism of compulsory licensing is on the agenda of the authorities.

It is of note, that the practice of compulsory manufacture of HIV drugs exists in Indonesia, Brazil and India, as well as in Canada, where in 2001 a compulsory license was issued for drugs against anthrax in the face of a threat of terroristic attacks. According to Alexander Nesterenko, President of Corporate Lawyer Association, such practice in the countries of Latin America  led to a several-fold reduction of the cost of treatment of HIV.

So, the case has thereby been established. However, law officers from the pharmaceutical companies object, expressing fear that it will hamper localization of international products in Russia.

On September 6 FAS provided a new text of the draft of law to the legislation community. Sergey Puzirevsky, Deputy Head of FAS, presenting its last edition remarked, that FAS suggests endowing the government with powers to authorize the use of developments without consent of patent owner with payment of a compensation, and stressed that currently that standard works in the military setting.  The mechanism of implementation  implies introduction into the Civil Code of a restricted list of conditions for compulsory licensing – an establishment of monopolistic high price, product withdrawal from circulation or production interruption which should be fixed in FAS. The antimonopoly authority or “a person wishing and willing to use” the intellectual property may take a legal action to the rights holder on suspension of compulsory non-exclusive license  specifying the proposed licensing terms.

The FAS legislation is not limited to the Pharma market. The mechanism of compulsory licensing involves the market of medical equipment as well. It may also be involved in  the“interests of life and health of citizens” (addition to wordings set out in clause 1360 of the Civil Code). In theory the wording may be extended to other spheres: agricultural complex, housing, and related industries. It is suggested to terminate the compulsory license in the court, if it is not used.

No final decision is available. The discussion is to be continued.

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