Technical note: the one and only compulsory licence for export

Only used once: the only time the system has been used was when Canada exported under compulsory licence to Rwanda

This technical note is a case study.
It accompanies blog posts on
the WTO’s deadlock over an intellectual property waiver for COVID-19
Bolivia’s bid to import a COVID-19 vaccine from Canada under compulsory licence


The 2003 waiver and 2005 amendment of Article 31 of the WTO intellectual property agreement — known as the TRIPS Agreement — has only ever been used once. Arguments continue over whether the conditions are too tough or whether the solution lies elsewhere, not in intellectual property. (Then on May 11, 2021, news broke of a possible second use, again involving Canada, for exporting a COVID-19 vaccine to Bolivia.)

The waiver and amendment suspend a rule which says medicines made under compulsory licensing must predominantly be for the domestic market. Without them, the rule would hinder exports of generics from richer countries to poorer ones. It’s often called the “paragraph 6” solution, from the 2001 Doha Ministerial Declaration on intellectual property and health.

The case study comes from a joint publication of the WTO, WHO and WIPO. It is reproduced from the extract on this page. ARVs are antiretroviral medicines. (See also this paper by Holger Hestermeyer.)

Case study on supply of ARVs to Rwanda

In 2004, Médecins Sans Frontières (MSF) approached a Canadian company to produce a triplecombination ARV (zidovudine, lamivudine and nevirapine). MSF initiated this move in the absence of any specific request from an importing country. The company obtained marketing approval in Canada in 2006, less than six months after the date of its application. Canada’s Access to Medicines Regime (CAMR), which implements the Paragraph 6 system, had to be amended to cover the product because Canada limits the scope of its law to a specified list of products. The three medicines combined in the product were each covered by a separate patent owned by a separate company. In July 2007, the company sought, without success, voluntary licences from the three patent holders.

In July 2007, Rwanda sent the WTO a brief notification of its intention to import 260,000 packs of the triple-combination ARV, reserving the right to modify the estimated quantity. It said it would not allow patent holders to enforce any patents on the product that may have been granted in its territory. As a least-developed country, Rwanda was not obliged to state anything else, nor did it need to notify its intention to use the system. In September 2007, the company applied for a compulsory licence in Canada which, under the system, would allow it to export 15,600,000 tablets (the equivalent of 260,000 packs) over a two-year period. The compulsory licence was granted two weeks later. The Canadian government notified the WTO in October that it was using the system as an exporting country. Canada reported that in October 2007 the Rwandan government issued a public tender for this triple-combination ARV. The Canadian company had originally offered its ARV at the no-profit price of US$0.39 per tablet. There were indications that at least four Indian generic manufacturers could supply the product at a lower price.

Canada reported that if Rwanda had procured the ARVs from these manufacturers, it would not have needed to use the system at all, since the products were not patented in India. However, during the tender process, the Canadian company halved its price to US$ 0.195 per tablet. In May 2008, the company announced that it had won the tender.

In line with the terms of the CAMR and the system itself, the tablets shipped to Rwanda were distinguished from the version manufactured for the domestic market by the mark “XCL” and white colouring, instead of the standard blue. The packaging bore an export tracking number issued by the Canadian government. Details of the product and its distinguishing characteristics, as well as details of the shipment, were posted on the web. A royalty was payable by the Canadian company for the right to use the patent, but the patent holders waived payment. A total of 6,785,000 tablets were shipped to Rwanda in September 2008, and an additional 7,628,000 tablets were shipped in September 2009, i.e. within the two-year validity period of the compulsory licence.

Source: 2013 WHO-WIPO-WTO study: Promoting Access to Medical Technologies and Innovation: Intersections between Public Health, Intellectual Property and Trade — extract, or full publication.

Picture credit: Kigali by “Portraitor” via Pixabay CC0

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