Analysis of the Socioeconomic Impact of a Voluntary License Granted by a Brand Name Manufacturer to Generic Manufacturers in India

Due to the rapid technological development of medicine, new medicines with extremely high efficacy—but also extremely high prices—are being distributed. An example is Sovaldi (Sofosbuvir), an anti-Hepatitis C medicine. Sovaldi cures the disease (Hepatitis C) almost completely. However, its price is extremely high. In the U.S., the price of Sovaldi is USD 1,000 per tablet. It is clear that ordinary people in developing countries cannot afford this medicine. To solve this problem, Gilead Sciences Inc.—the manufacturer of Sovaldi—concluded a voluntary license agreement with generic medicine manufacturers in India. The voluntary license allows Indian pharmaceutical companies to sell Sovaldi at USD 4.29 per tablet in India and also allows them to export the product to other selected developing countries as well. Gilead's voluntary license scheme was praised by the Indian government, patients in India, and international patient support organizations. However, certain international NGOs—including MSF (Doctors Without Borders)—criticized the scheme. This study focuses on the voluntary licensing scheme and aims to determine appropriate medicine prices.