/ Chile discusses the use of compulsory licenses for the exploitation of a patent

For the first time and for public health reasons:

Chile discusses the use of compulsory licenses for the exploitation of a pharmaceutical patent.

On March 9, 2018, the outgoing Minister of Health issued the Resolution No. 399, which states that there are reasons of public interest to justify granting one or more compulsory licenses for the exploitation of patents protecting the active ingredient Sofosbuvir, as well as its combinations with other direct-acting retrovirals, useful for the treatment of chronic hepatitis C.

The Resolution states that the Ministry of Health will take the necessary measures to achieve this purpose, which in practice translates into the possibility of filing a compulsory license claim before the National Institute of Industrial Property (INAPI), based on Article 51 of the Chilean IP Law No. 19,039 and against at least two patents already registered for the active ingredient Sofosbuvir: Patents Nº 49,840 and Nº 51,404, owned by GILEAD PHARMASSET LLC.

This Resolution is the first of its kind in Chile and responds to an initiative put forward by patients, parliamentarians and Corporación Innovarte, through a letter addressed to the Ministry of Health on March 17, 2017, exposing the health problems that patients of hepatitis C have been facing in Chile. This letter emphasizes the high cost of medicines available in the local market for their treatment, versus “alternative” drugs of foreign manufacture, which -they allege-could be up to 90% cheaper than those currently paid both the patients in private health centers and the State of Chile,now that hepatitis C is included in the pathologies covered by the so-called national plan of Explicit Health Guarantees (Auge-GES).

However, considering that on March 11, 2018 the elected President and his cabinet assumed office, it is feasible that under the scrutiny of the new authorities, this Resolution would lead to a more detailed analysis on some aspects on which the public debate is centered now, given the significant discussion it brings up regarding the balance between public and private interests:

• Actual/updated proportion of patients affected in Chile by the disease, as well as their prognosis in case of adopting the treatment with Sofosbuvir and its combinations with other direct-acting retrovirals.
• Prevalence or not of the disease in Chile at an endemic level, such as to establish reasons of extreme urgency that demand measures of the same order (for example, granting compulsory licenses for the manufacture, importation, sale and/or distribution of an active ingredient) and/or pharmaceutical combinations protected by one or more patents in the national territory).
• The high out-of-pocket cost implied in access to health in Chile, due to an apparent imbalance between the availability of broader State’s subsidies and the lack of an effective regulation capable of guarantee a significant co-payment between private insurers and the patient, in terms of drugs, services and medical supplies in general, but especially in the case of complex pathologies of high social sensitivity like this one.

For now, there are administrative actions that GILEAD PHARMASSET LLC. and other interested parties could take against such Resolution before the new Ministry of Health to pursue a reconsideration and without discarding alternative solutions to this conflict, that for the first time in Chile, brings to the public discussion the utilization of compulsory licenses of patents due to public health reasons.

Francesca Rodríguez

Senior Associate

Alessandri