Voluntary licensing News report for biopharmaceutical companies

A 2024 report from the Medicines Patent Pool (MPP), in partnership with Boston Consulting Group (BCG), showcases how voluntary licensing advances global health while offering significant commercial advantages for biopharmaceutical companies. Co-funded by the World Intellectual Property Organization (WIPO) and the Government of Canada, the report emphasises voluntary licensing’s role in bridging global health disparities, especially in low- and middle-income countries (LMICs).

What is a Voluntary Licence?

Voluntary licences are contracts entered freely into by IP holders and by generic manufacturers, in which the former authorise the latter to manufacture patented products and sell them in specified low- and middle-income countries. Voluntary licensing is one of several approaches that has been proven to help expand access to medicines.

If done in the right conditions, use of voluntary licensing for medicines and vaccines could increase patient reach for biopharmaceutical companies and could contribute to reducing global health inequalities, while being economically viable.

Expanding Voluntary Licensing to NCDs

Charles Gore, Executive Director of MPP, highlights the potential of extending voluntary licensing to non-communicable diseases (NCDs) such as cancer, diabetes, and heart disease, which account for 74% of global deaths. The report underscores the importance of licensing these treatments, helping pharmaceutical companies increase patient access and revenue, particularly in upper-middle-income countries (UMICs). Voluntary licensing traditionally focused on infectious diseases like HIV and COVID-19, but expanding this to NCDs provides significant opportunities for both health and business.

Key findings from the study:

The study highlights the significant potential in expanding voluntary licensing beyond infectious diseases like HIV and COVID-19 to NCDs such as diabetes, cancer, and heart disease, which cause 74% of global deaths.

Commercial Benefits for Biopharmaceuticals in LMICs

The report presents strong evidence of the financial incentives for companies engaging in voluntary licensing:

  • Revenue Growth: Licensing NCD treatments have the potential to increase revenue by 2% to 17% in UMICs.
  • Market Expansion: Licensed products have been shown to reach four times more patients than originator products, emphasising the ability to expand market reach across geographies.

Workforce and Cost Benefits

Implementing voluntary licensing also impacts companies internally:

  • Cost Savings: Employee retention improvements through health equity initiatives could decrease attrition rates by 1%, resulting in cost savings between US$ 7 million and US$ 50 million, depending on company scale.

These findings illustrate that voluntary licensing not only supports global health but also delivers tangible commercial benefits, making it a strategic approach for companies.

Access the report
Access the 4-pager
Access the report (Japanese)