Tracking Global Compulsory Licensing Trends in Biopharmaceuticals

The Politics of CLs and the Costs to Innovation

Despite their foundational role, patents protecting biopharmaceutical innovations can come under stress during public health emergencies, when governments face pressure to deploy new medicines and vaccines to patients quickly and at scale. A recent case in point was the wave of actions unleashed during the Covid-19 pandemic to rush access to vaccines. Compulsory licensing—which allows a government or legal authority to grant a third-party permission to use a patented invention or copyrighted work without the owner’s consent—were seen by some public authorities as a necessary stance to deliver a strong response to the multiyear health emergency.

Yet, as the experience of the pandemic reaffirmed, real-world access to vaccines and therapeutics depends less on legal authority and more on sustained innovation capacity, production readiness, and sustained investments in public health delivery infrastructure. This is in addition to the local transportation, infrastructure, and political issues that delayed and blocked access in many nations that sought CLs.

Pre-Covid Experience with CLs

Before the pandemic, CLs were often used as a bargaining tool to pressure patent holders during pricing disputes. In most cases, however, these efforts yielded limited or temporary results and did not expand domestic production or innovation capacity. In early 2000s, Brazil’s repeated threats to issue CLs on HIV antiretrovirals prompted some short-term price reductions but failed to build local manufacturing capability or reduce long-term dependence on imports. Thailand’s use of compulsory licensing between 2006 and 2008 similarly generated uncertainty among other countries and drew scrutiny from trading partners concerned about regulatory predictability.

The H5N1 avian influenza crisis of 2005 also illustrated the limitations of compulsory licensing as a rapid-access strategy. As fears of a pandemic escalated, several governments signaled their intent to issue compulsory licensing for Roche’s antiviral drug Tamiflu, arguing that the company’s production capacity would not meet global demand. Yet, no country that threatened a CL succeeded in producing or securing additional supply. The drug’s manufacturing process was technically complex, dependent on specialized facilities and precursor materials, which most local manufacturers in developing nations lacked the capability to replicate. Instead, access improved only after Roche voluntarily entered into sub-licensing agreements with qualified producers in China and India. These partnerships expanded supply under regulated conditions while maintaining quality control and safeguarding technology transfer. Hence, the legal authority to override patents does little when the industrial and scientific capacity to manufacture is absent.

Between 2020 and 2022, several governments invoked or enabled a CL to address shortages of key therapeutics, yet few achieved meaningful production outcomes. Israel was the first mover in March 2020, issuing a CL to import generic versions of lopinavir/ritonavir, being tested at that time as a Covid treatment. Some governments including Brazil, Canada, Chile, Ecuador, and Germany streamlined legal pathways for compulsory licensing for the public health crisis. Hungary and Russia not only adopted new rules but also issued a CL for remdesivir. Further, countries such as India and South Africa co-led the push for a TRIPS waiver at the World Trade Organization, citing a broader demand for IP flexibilities during crises.

However, the pandemic also highlighted how voluntary licensing frameworks can achieve results that compulsory measures could not. In 2020, Gilead Sciences entered into a voluntary licensing agreements with seven Indian manufacturers to produce its antiviral remdesivir for distribution across LMICs. India later became a critical export hub, supplying over 298 million Covid-19 vaccine doses to nearly 100 countries through its Vaccine Maitri initiative. Further, Merck signed voluntary licensing deals through the Medicines Patent Pool in 2021, allowing 27 generic manufacturers in India and 10 other LMICs to produce molnupiravir, an oral antiviral for Covid-19. Ultimately, the pandemic once again showed that real access depends not on legal authority, but on a country’s ability to innovate, produce, and scale critical technologies with sustained development.

The benefits of this model extend beyond Covid. The rollout of direct-acting antivirals for hepatitis C provides another example of how voluntary licensing can expand access at scale. Beginning in 2014, Gilead Sciences issued nonexclusive VLs to trusted generic manufacturers, including Ferozsons Laboratories, combining patent rights with technology transfer and local manufacturing. This enabled authorized generic versions of Sovaldi to be produced at substantially lower prices while maintaining quality standards and expanding access across LMICs. A 2019 difference-in-differences analysis found that countries covered by these voluntary licenses experienced significantly higher hepatitis C treatment uptake than comparable countries without such agreements, demonstrating that voluntary licensing is most effective when IP is paired with manufacturing capacity, technical know-how, and trusted production partnerships.

The contrast is instructive. Countries that relied on compulsory licensing generally struggled to translate legal authority into production, whereas voluntary licensing combined patent access with manufacturing know-how, quality control, regulatory support, and trusted commercial relationships. Voluntary licensing enables participation across the full innovation value chain—from intellectual property and technology transfer to manufacturing, regulatory approval, and commercial distribution—whereas compulsory licensing is largely limited to the first step: legal access to the patent.

Difficulty in CL Implementation

The United States, Japan, and much of the European Union are home to many of the world’s major multinational biopharmaceutical firms and have criticized compulsory licensing, arguing that it creates market uncertainty. Unlike VL, CL reduces innovators’ ability to control how proprietary technologies are deployed and commercialized. Even when patent holders receive royalties, the possibility that governments may override patents during future crises increases uncertainty surrounding the expected returns on high-risk R&D investments. For biopharmaceutical firms, whose products often require billions of dollars and more than a decade to develop, this uncertainty can influence decisions about where to invest, which technologies to pursue, and whether to engage in technology transfer partnerships in emerging markets. Moreover, for complex therapies such as biologics and mRNA vaccines, patents are only a part of what is needed. Producing these therapies also requires specialized know-how and manufacturing expertise, which CLs cannot provide. This makes compulsory licensing less effective for advanced medicines.

While proponents cited clear legal grounds for issuing CLs, their implementation exposed deep structural challenges. Even with patent rights waived or licensed, countries lacking biomanufacturing infrastructure could not readily produce equivalent medicines.

Implementing compulsory licensing is therefore far more complex than legal frameworks suggest. Mexico, for example, despite reforming its Federal Law for Protection of Industrial Property in 2020 to strengthen provision for compulsory licensing during health emergencies, has yet to issue a single license. Limited domestic production capacity, strong ties to multinational firms, and trade commitments under the United States-Mexico-Canada Agreement have made Mexico hesitant to use the mechanism. Moreover, the country’s pharmaceutical sector is heavily shaped by the presence of multinational companies that invest in local clinical trials, supply chains, and technology partnerships. As Mexico seeks to expand its innovation footprint, with the government targeting roughly $2 billion annually in pharmaceutical and biotech research and development by 2030, issuing or even threatening CLs risks signaling policy instability, deterring foreign investment and slowing the cutting-edge technology essential to building long-term innovation capacity.

As the immediate urgency of the pandemic has faded, momentum for issuing new CLs has slowed, even as efforts to formalize them within legal frameworks have accelerated.

Codifying a CL is seen as a symbol of health equity, even where the mechanism has rarely delivered tangible outcomes. In practice, expanding these provisions risks creating uncertainty for investors and innovators, particularly in sectors that depend on predictable IP protections and technology partnerships. South Africa’s recent extension of compulsory licensing principles into the copyright domain, now being tested in a 2025 tribunal case, further illustrates how the concept is diffusing beyond its original intent.

Even so, in May 2025, the European Union reached a political agreement to establish a bloc-wide compulsory licensing regime for defined cross-border emergencies—a move intended to demonstrate preparedness rather than to address an operational gap. Similar discussions in Turkey, Latin America, and Southeast Asia reflect the same trend. The political desire for a national government to shift blame to an often-foreign company for its own inability to deliver access, rather than focus on building capacity or highlighting the successes of domestic licensees, runs the risk of remaining part of the politics after the crisis has ended.

While compulsory licensing has gained new political appeal as a preparedness measure, its practical and innovation value remains constrained. Without a supporting ecosystem of sustained investments in manufacturing capacity, incentives for technology transfer, and mechanisms that protect proprietary know-how while enabling access, compulsory licensing risks becoming a legal gesture than a practical tool.

Alexander Kersten is deputy director and fellow in Renewing American Innovation at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Shruti Sharma is a program manager and research associate in Renewing American Innovation at CSIS.