Executive Summary
The India–U.K. Comprehensive Economic and Trade Agreement (CETA) reorients India’s intellectual property (IP) policy by elevating voluntary licensing over compulsory licensing.
This shift, enshrined in Chapter 13, Article 13.6, risks undermining India’s hard-won safeguards for affordable medicines and weakens its leverage on technology transfer—both vital for public health and sustainable development.
Context
CETA’s Chapter 13 governs IP rights and includes Article 13.6: “The Parties recognise the preferable and optimal route to promote and ensure access to medicines is through voluntary mechanisms, such as voluntary licensing which may include technology transfer on mutually agreed terms.” India’s acquiescence marks a departure from its historical advocacy for compulsory licensing to curb high drug prices and enforce patent “working” requirements.
Dilution of Compulsory Licensing
- India once led the push for compulsory licenses under TRIPS, allowing production of patented drugs without patent-holder consent to protect public health.
- The Natco Pharma case (2012) saw a compulsory license for Bayer’s sorafenib tosylate slash treatment costs from ₹280,428 to under ₹8,800 per month, vastly improving
patient access. - By endorsing voluntary licensing as “optimal,” India de facto abandons its stance as a compulsory-licensing champion.
Erosion of Policy Safeguards
- India’s Patents Act originally required periodic “working” (local commercialisation) reports to ensure patented inventions served public need.
- A prior free-trade agreement already extended reporting intervals from annual to once every three years, diluting transparency.
- CETA reinforces this change, making it harder to monitor “working” and to trigger compulsory licenses when patents remain unexploited.
Problems with Voluntary Licensing
- Voluntary licenses depend on patent-holder consent and often impose restrictive terms—geographic limits, supply quotas, and royalty ceilings—favouring
multinational firms. - During COVID-19, Gilead’s voluntary license to Cipla for remdesivir resulted in Indian prices higher than those charged in the U.S., demonstrating that voluntary agreements
cannot reliably guarantee affordability.
Broader Implications: Technology Transfer
- India has long called for technology transfer on “favourable terms” to support industrialisation and climate action, drawing on the 1974 NIEO mandate and UNFCCC
commitments. - Its 2024 Biennial Update Report cites slow technology transfer and IP barriers as key obstacles to scaling climate-friendly solutions.
- By downplaying compulsory licensing and weakening its bargaining position on technology transfer, India risks losing clout in global climate and development
negotiations.
Recommendations
Stakeholder Action Item
Ministry of Commerce & Industry Reaffirm compulsory licensing as a primary tool for
public health safeguards.
Department of Pharmaceuticals Maintain annual patent working reports to preserve
transparency and trigger mechanisms.
Ministry of External Affairs Renegotiate Article 13.6 to balance voluntary licenses
with compulsory licensing rights.
Ministry of Environment, Forest &
Climate Change
Leverage CETA negotiations to safeguard demands for
technology transfer on favourable terms.
- Issue a public statement underscoring India’s ongoing commitment to compulsory
licensing under TRIPS flexibilities. - Form an inter-ministerial committee to monitor CETA implementation and propose
amendments within 12 months.
Conclusion
CETA’s tilt toward voluntary licensing and relaxed IP reporting undermines India’s capacity to secure affordable medicines and essential technology. Safeguarding compulsory licensing and robust patent “working” requirements is imperative to protect public health, uphold India’s leadership among developing nations, and maintain leverage in climate and technology
negotiations.
