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Kevin Outterson and Aaron S. Kesselheim Market-Based Licensing For HPV Vaccines In Developing Countries Health Affairs, January/February 2008; 27(1): 130-139. [Abstract] [Full Text] [PDF] [Reprints & Permissions]

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Feasibility of GO (Generic Open) License

Manthan D. Janodia, Dharmagadda Sreedhar, Virendra S.Ligade, Nayanabhirama Udupa   ( 16 January 2008 )

Feasibility of GO (Generic Open) License 16 January 2008
Manthan D. Janodia, Lecturer, Department of Pharmacy Management Manipal College of Pharmaceutical Sciences, Manipal University, Manipal 576 104, Karnataka, India, Dharmagadda Sreedhar, Virendra S.Ligade, Nayanabhirama Udupa Send comment to journal: Re: Feasibility of GO (Generic Open) License manthan.j{at}manipal.edu Manthan D. Janodia, et al.	The authors have proposed a mechanism of GO (Generic Open) license, an alternative mechanism, that would compensate for lost R&D of MNCs and at the same time would ensure that the products are available at low price in low- and middle-income countries. Despite this good alternative, the authors have not highlighted whether the mechanism of GO licenses should be “exclusive” or “non-exclusive” to the interested manufacturers in the low- and middle-income countries. If an “exclusive” GO license is provided to the manufacturer, the chances of a price difference for the same medicine in low- and middle-income countries may be different and may lead to a “grey market” where products intended for low-income countries would be imported in middle-income countries. Though regulations are required to stop spillover of products from low-income countries to high-income countries, in totality this cannot be negated. In the case of “exclusive” GO licenses, the licensee may not be able to provide a substantial royalty to the patent owner that would compensate for lost R&D. In the other case, if there are “non-exclusive” GO licenses given, the royalty by several manufacturers of the same product may be more than the actual loss of the cost of R&D. In that case, the patent owner would be willing to give a “non-exclusive” GO license to earn more royalty than actual loss of the cost of R&D. In certain cases, the patent owner may not be willing to give a GO license and retain the monopoly power where the mechanism becomes irrelevant. We have seen the cases of Thailand and Brazil, where MNC pharmaceutical companies were not willing to reduce the price of a product below a certain price limit and there was an insignificant indifference between the price charged in high-income and middle-income countries for the products. As mentioned by the authors, the commitment of MNC pharmaceutical companies is required for the success of the GO license mechanism. Nonetheless, the GO license does seem to provide a significant relief to the people of the developing world in terms of access to essential medicines. The evidence need to be collected about to what extent the GO license is practicable and can be extended to other categories of pharmaceutical products than HPV vaccine.