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42. As noted in the September 2007 U.S. Government Accountability Office report, the U.S. Trade Representative has recognized Thailand’s “ability to issue compulsory licenses subject to WTO rules and the country’s domestic laws. However, it expressed concern about what it considered to be the lack of transparency exhibited in Thailand.” See U.S. Government Accountability Office, Intellectual Property: U.S. Trade Policy Guidance on WTO Declaration on Access to Medicines May Need Clarification, GAO-07-1198, September 2007, at 49, available at <http://www.gao.gov/new.items/d071198.pdf> (last visited April 7, 2009). The lack of clarity surrounding whether Thailand did or did not negotiate with the patent holders perfectly exemplifies this concern.+(last+visited+April+7,+2009).+The+lack+of+clarity+surrounding+whether+Thailand+did+or+did+not+negotiate+with+the+patent+holders+perfectly+exemplifies+this+concern.>Google Scholar

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45. This decision is particularly interesting in the context of Articles 31(d) and (e) which specify that compulsory licenses without the authorization of the right holder should be non-exclusive and non-assignable. By refusing to contract with other producers and thus denying them a market, the GPO essentially becomes the only firm able to utilize the licenses.Google Scholar

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49. While the establishment and growth of a domestic generics industry is considered a valid objective for the implementation of a compulsory licensing program, it is worth noting that the U.S. generics industry emerged without compulsory licensing. This may be due to the profitability of the U.S. generics market, the ease of accessing drug patent information, and the regulatory framework conferred by the Hatch-Waxman Act (Drug Price Competition and Patent Term Restoration Act of 1984) designed to promote generics while preserving a financial incentive for research and development.Google Scholar

50. Note that in the context of the objectives described here compulsory licenses could be issued for either domestic production or importation. While the requirements surrounding the phrase “predominantly for the supply of the domestic market” have yet to be resolved, many developing nations have no alternative apart from importation. Scherer and Watal make the point that during the 1970s, even Canada – with its high income and internationally renowned universities – found it necessary to import the majority of the bulk pharmaceuticals supplied under compulsory licenses (see Scherer and Watal, supra note 2, at 925.) If it turns out that patented pharmaceuticals distributed under a compulsory license cannot be exported as ‘parallel goods’ within paragraph 5(d) of the Doha Declaration, then they remain subject to article 31(f ) of the TRIPS Agreement, which literally limits such exports to 49.9 per cent of the total supplies distributed under the compulsory license in the local market. Since only a small number of developing countries can manufacture technically advanced medicines, these legal impediments hamstring the ability of these countries to assist other poor countries that issue compulsory licenses in order to acquire essential medicines without possessing any local manufacturing capacity in this regard. See Reichman, J. H. and Hasenzahl, C., “Non-voluntary Licensing of Patented Inventions: Historical Perspective, Legal Framework under TRIPS, and an Overview of the Practice in Canada and the U.S.A.,” UNCTADICTSD Project on IPRs and Sustainable Development, Issue Paper no. 5, 2003, at 17.Google Scholar

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76. Although the industry claims that compulsory licensing reduces the incentive to conduct R&D in such diseases, as long as there are large emerging markets (i.e., China and India) with similar disease burdens, it is hard to imagine that the actions of Thailand will influence the industry’s decision to research treatments in these disease areas.Google Scholar

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81. This strategy, however, is likely to be most successfully employed by nations with some degree of market power. The Brazilian case is noteworthy in this context. Cohen and Lybecker detail the Brazilian negotiations. See Cohen, J. C. and Lybecker, K. M., “AIDS Policy and Pharmaceutical Patents: Brazil’s Strategy to Safeguard Public Health,” World Economy 28, no. 2 (Spring 2005): 211–230.CrossRefGoogle Scholar

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