UK Opposition Party Proposes Compulsory Licensing to Develop Cheaper Drugs

The Labour party, the United Kingdom’s official opposition party, revealed during a conference that it plans to reduce the cost of drugs by setting up a government-owned generic drug manufacturer that would supply medicine to the National Health Service (NHS) and by employing compulsory licensing to use drug makers’ intellectual property to develop generics.

Speaking during the Labour conference, party leader Jeremy Corbyn announced the policy proposal by invoking the headline-generating case of the cystic fibrosis (CF) drug lumacaftor/ivacaftor (Orkambi), which has been the focal point of a long-running battle over price between the National Institute for Health, the UK drug pricing watchdog, and drug company Vertex. To date, England and the drug maker have not been able to reach an agreement on the price of the drug, although the Scottish government has reached a deal that will provide about 400 patients with CF access to the product.

Under the Labour proposal, said Corbyn, compulsory licenses would be used to grant a state-owned entity the right to use a drug maker’s intellectual property so that a generic version of a high-cost drug like Orkambi could be produced cheaply, and so that England could join Wales in making all prescriptions free to patients.

The party has released a paper, titled “Medicines for the Many,” that outlines its plans in more detail, and explains that the government would use Crown use licenses, provided for in the Agreement on Trade-Related Aspects of Intellectual Property Rights, or TRIPs Agreement, which allow the government to issue licenses. (These provisions are similar to Bayh-Dole march-in rights in the United States.)

The Labour paper also explains that Bolar provisions could also be used to allow the government to run clinical trials for its products without infringing patents on innovator drugs.

The paper also states that AbbVie’s brand-name adalimumab, Humira, was developed in part by a government-funded lab in the United Kingdom, and while the government receives a royalty on adalimumab’s sales, “This case highlights that while we have been successful in generating great new science, current lab-to-market structures often fail to fully capture the economic and social benefits of those inventions, or the returns to UK government investments in medical research.”

In the case of drugs like Humira, the public should receive a share of the financial returns from successful innovations in which public funding played a major role, according to the paper. Other strategies discussed include open licensing of intellectual property rights and a requirement that drug developers provide transparency on their incurred costs.

The paper does not address whether biologics like Humira would be subject to government-sponsored biosimilar development attempts.

The pharmaceutical industry was quick to respond to the proposed plan; Richard Torbett, PhD, the executive director of commercial policy at the Association of the British Pharmaceutical Industry, said in a statement that while the Orkambi negotiations represent a “clearly unacceptable” situation, “‘compulsory licensing’—the seizure of new research—is not the answer. It would completely undermine the system for developing new medicines. It would send a hugely negative signal to British scientists and would discourage research in a country that wants to be a leader in innovation.”

Warwick Smith, director general of the British Generic Manufacturers Association and the British Biosimilars Association, in a letter addressed to Corbyn, said that his group agrees that generics are the most sustainable way to keep drug prices down, but noted that the United Kingdom’s market has allowed for some of the lowest generic drug prices in Europe. Substantial savings have also been achieved through biosimilars, he notes, and the current UK system “works extremely well.”

Smith added that “we do not understand how a state-owned generics manufacturer—operating to the same requirements as others in the marketplace—would be able to have a positive impact.”