Voluntary Licensing: Right for Health, Smart for Business – Report

A report by the Medicines Patent Pool (MPP), in partnership with Boston Consulting Group (BCG) released in May 2024, highlights how voluntary licensing advances global health while being commercially viable for biopharmaceutical companies.  The study, co-funded by the World Intellectual Property Organization (WIPO) along with the Government of Canada presents evidence that voluntary licensing is an effective mechanism for addressing global health disparities, especially in low and middle-income countries. Using both qualitative and quantitative analyses, it illustrates how voluntary licensing advances access to medical products across multiple geographies while offering economic benefits for biopharmaceutical companies.

Charles Gore, Executive Director of MPP, said the study provides solid evidence that voluntary licensing “can increase revenues for both innovator and generic companies by up to 17%, enhance access and encourage employee retention leading to significant cost savings, with minimum costs and risks to companies”. MPP seeks to leverage the findings of the study to expand its  cover to non-communicable diseases (NCDs) that account for 74% of global deaths today. A number of innovator companies have invested in the development of new treatments for cancer, heart disease and diabetes. By joining hands with MPP and its global network of generic manufacturers, these innovator drugs can help save lives across several LMICs.

Key findings from the study:

• Opportunity for voluntary licensing on Non-Communicable Diseases (NCDs): A significant opportunity arises in extending voluntary licensing beyond the traditional focus on infectious diseases like HIV and COVID-19 to NCDs, which account for 74% of global deaths. These diseases include diabetes, cancer, and cardiovascular and respiratory diseases.
• Commercial benefits for drug manufacturers: According to the report, expanding voluntary licensing to include NCD medications could not only increase patient reach but also potentially enhance revenue for originators in upper-middle-income countries (UMICs) by 2% to 17%.
• Enhancing patient reach and access: The analysis shows that non-originator products reach approximately four times more patients than originator products in the studied markets, emphasizing the impact of licensing on patient diversity and data collection for Real-World Evidence (RWE) corpus on a licensed product.
• Workforce benefits: Implementing health equity strategies such as voluntary licensing could decrease employee attrition rates by 1%, leading to substantial cost savings estimated between US$ 7 million and US$ 50 million depending on the biopharmaceutical company’s scale and size.