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Voluntary licensing and partnerships

We want to play an active role in addressing the healthcare crisis in developing countries. We believe preferential pricing arrangements are the best way to do this, because we are able to ensure delivery of a safe, quality product at an affordable price for as long as it is needed. This is where we focus our efforts. But in some situations voluntary licences may also help to increase the supply of medicines.

Voluntary licences (VL) enable local manufacturers to produce and sell generic versions of our products. In November 2005 we signed a licencing agreement with Universal Corporation of Kenya. In total we have now signed seven licencing agreements for our antiretrovirals (ARVs) in Africa, where HIV/AIDS is having a devastating impact. This includes two VLs in Kenya and five in South Africa, the first of which was granted to Aspen Pharmacare in October 2001. Some cover just parts of Africa and others all of sub-Saharan Africa.

A decision to grant a VL depends on a number of factors including the severity of the HIV/AIDS epidemic in that country, local healthcare provision and the economic and manufacturing environment. VLs are not a universal solution to HIV/AIDS but a specific response to a particular set of circumstances.

We discuss VLs with potential partners on a case-by-case basis. Selecting the most appropriate licensee is key. We need to be sure that the manufacturer will be able to provide a long-term supply of good-quality medicines and will implement safeguards to prevent the diversion of medicines to wealthier markets. (See Preferential pricing).

Voluntary licence holders can combine the active ingredients they have licensed from us with other licensed active ingredients to produce fixed dose combinations. They can also use the US Food and Drug Administration’s fast track approval process for ARVs to accelerate the availability of generic ARVs for PEPFAR (US President’s Emergency Plan for AIDS Relief) program for programmes in Africa.

There has been much discussion about the use of compulsory licences, under which intellectual property rights are taken away from rights holders. Compulsory licenses are one of the flexibilities in the World Trade Organisation’s TRIPs agreement on intellectual property, which can be used for humanitarian purposes. GSK believes that widespread use of compulsory licences will undermine the intellectual property framework and be counter-productive in the long term. R&D into new treatments, especially where commercial markets exist, such as for HIV/AIDS, depends on protection for intellectual property.

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