Author: Sharon Adedapo, Research Assistant, ERC funded PatentsInHumans Project, School of Law & Criminology, ALL Institute, Maynooth University
Licensing agreements play a key role in the life sciences and pharmaceutical industries. A license is a legal permission which the holder of an Intellectual Property (IP) right, i.e., patents, copyrights, or trademarks, (the licensor) can give to another party to grant that other party (licensee) the right to use their IP over a specific product or technology under agreed terms. A licence can for example be provided to allow them to use, produce, or sell it. Both parties must agree the terms of use, and any conditions or restrictions on use under the license. Licensing allows the IP owner to keep ownership of the IP, while granting others the right to use, produce etc the IP protected technology. They can choose to grant IP rights to one licensee under an exclusive license, or to several licensees at once under a non-exclusive license. There are several reasons why a rightsholder such as a company that holds IP would choose to license their IP. For instance, Licensing allows companies to expand their research and development capacity, increase revenue without directly producing the product, increase their market share and allow them to enter into new geographic markets, and maximise their revenue streams through multiple licensees.
Licensing agreements can also be used by a rightholders in ways which alleviate access to health issues, for example whereby, the rightsholder agrees to license a third party to produce a generic version of their patented technology typically in a low income country, where there is no access to the branded product. Typically, the generic company would sell their generic version of the medicine at a reduced price. For example, in the early 2000s, largely due to the pressure from HIV/AIDS activists and threat of governmental compulsory licenses, several pharmaceutical companies began offering voluntary licenses to a small number of generic manufacturers “to promote limited competition and greater access to more affordable medicines”. These were offered to a small number of manufacturers in limited territories and with specific terms. In 2010, the Medicines Patent Pool (MPP) was founded by Unitaid, and its mission is to “[i]ncrease access to, and facilitate the development of, life-saving medicines for low- and middle-income countries (LMICs) through voluntary licensing and patent pooling”. It initially focused on HIV, hepatitis C and tuberculosis, but it later expanded its activities to cover all essential medicines in 2018.
More than 70% of the world’s poorest population live in middle-income countries (MICs), such as Brazil and Venezuela. However, despite this, many MICs are categorised as too wealthy to be eligible for many of the voluntary licensing agreements for health-technologies, including, many of the MPP licensing agreements, due to their national average income levels. Thus, MICs may be ineligible for tiered pharmaceutical pricing programs and health official development assistance. The Lancet Commission notes that this is a new shift, and in the past, just over 20 years ago, more than 90% of the world’s poorest lived-in low-income countries (LICs). This means that many of these countries have increased their national average income level, making them “too rich” to receive aid and lower pharmaceutical pricing, but they often do not have sufficient funds to pay the same rates as high-income countries (HICs) for essential medicines, such as medicines for HIV/AIDS. Thus, patients in such MICs may not have access to such medicines. In 2015, the UN set the goal of ending “the epidemics of AIDS, tuberculosis, malaria…” by 2030, and a 90% reduction in new HIV infections and deaths To do this, tackling high prices, including by facilitating more voluntary licensing for states, including MICs not able to access HIV medicines currently, is needed.
Lenacapavir – Voluntary Licensing Agreements – The Middle Income Country Gap?
In 2024, the revolutionary HIV drug, lenacapavir, was introduced by Gilead Sciences, and has been described by many researchers as the closest thing to a vaccine against HIV to date, with many hopeful that it will significantly lower HIV infections worldwide. The WHO has recommended that lenacapavir should be offered twice a year as an additional prevention choice for those at risk of HIV. It is an injectable Pre Exposure Prophylaxis (PrEP) product, which “offers effective, long-acting alternative to daily oral pills and other short-acting options”. PrEP is a medication taken by HIV-negative people that reduces the likelihood of contracting HIV. The price of lenacapavir will play a key role in determining who can afford it and whether it will lower the global HIV rates. The price set by Gilead for the branded lenacapavir product was initially reported in 2024 to be around $44 000, but it has now been reported in 2025 that the list price for lenacapavir for PrEP, in the US will be US$28,218. Th price is unaffordable for many countries. According to a July 2024 study by Fortunak et al., the price for lenacapavir’s PrEP can be as low as $35 to $40 per patient per year if made on a large scale. Scientists have concluded that the “mass-production of generic lenacapavir, under voluntary licensing, is required to achieve this.” For example, a recent study has suggested the price for a generic lenacapavir could be reduced to $25 once economies of scale are achieved.
For LMICs, patents have often kept the prices for pharmaceuticals high and restricted access until generic production of the medicine is possible. For essential medicines that are still under patent, voluntary licensing has been crucial for increasing access and providing them at affordable prices. Through voluntary licensing programs, more than 25 million people globally have access to generic antiretrovirals, including for HIV/AIDs. For lenacapavir, voluntary licensing will likely determine whether the drug is limited to wealthier countries or becomes a worldwide preventative tool.
When the first PURPOSE-2 trial results were announced, Gilead promised to “provide a public statement regarding its planned access approach for high incidence, resource limited countries, which are primarily low and lower middle income countries”. After the PURPOSE-2 trial results, in October 2024, Gilead negotiated bilateral voluntary licensing agreements with six generic manufacturers to prepare cheaper versions of lenacapavir. This appeared to be an “unusual” move by some because pharmaceutical companies often “fiercely guard new medicines under patents for 20 years, during which time they alone can make and sell the drugs – and only countries that can afford the list price get access”. Gilead opted out of working with the Medicines Patent Pool (MPP) for lenacapavir, which historically provided for the broadest worldwide access to generic HIV medicines. Instead, Gilead negotiated voluntary licenses with patent holders and generic manufacturers. An advantage of Gilead’s licensing agreement with the 6 generic manufacturers is that it allows 120 LMICs to have increased access to generic lenacapavir once production begins. Additionally, due to the length of time that it would take for the 6 generic manufacturers to set up production for lenacapavir, Gilead has promised to supply its own version of lenacapavir to the low and middle income countries until generic versions are available.
However, a drawback of this voluntary license arrangement is that many upper middle income countries (UMICs), such as Brazil, Colombia, Mexico, and Argentina, are left out of this voluntary licensing agreement, and thus, their ability to access affordable prices for lenacapavir is compromised. This is because these countries fall into the ‘grey zone’ where they are “too rich for cheap generics” and “too poor to afford Gilead’s [high] prices”. This raises concerns from a public health perspective because many of these excluded UMICs account for 41% of new HIV infections. The 12 Latin American countries that are excluded from this voluntary licensing agreement have on estimate over 2 million people living with HIV, representing 7% of the worldwide HIV infections. Gilead has also included an anti-diversion clause in the licensing agreement which prohibits generics from being sold to the MICs that are not part of the approved 120 under its licensing agreement.
This fact that such UMICs are not included in the licensing agreement means many people within these UMICs will not have access to lenacapavir which arguably raises additional broader bioethical concerns because some of these countries had participated in lenacapavir’s clinical trials. These countries that contributed to the development of the drug are thus prevented from accessing affordable generic version of the drug. It raises questions regarding global health equity, fairness, and access to medicine.
Lenacapavir serves as an example of the stark gap between scientific advancement and equitable access to healthcare, and the broader impacts that patents and other IPRs can have on access to health-technologies. While the medication has great potential to be used for treatment and prevention of HIV, the current voluntary licensing approach adopted by Gilead reinforces the ‘middle-income trap’, leaving many people living in UMICs with no access to affordable alternatives.
Part of our mission at the ALL Institute is to ensure that everyone, not just those who can afford it, have equitable access to health. This principle is also central to the PatentsInHumans project, where we examine how patent grant and licensing systems shape who ultimately has access to life-saving health technologies and medicines.
This research was conducted as part of the ERC funded PatentsInHumans Project. You can find out more about the PatentsInHumans project on our website: www.patentsinhumans.eu and by watching this short video.
The PatentsInHumans project is funded by the European Union (ERC, PatentsInHumans, Project No. 101042147). Views and opinions expressed are however those of the authors only and do not necessarily reflect those of the European Union or the European Research Council Executive Agency. Neither the European Union nor the granting authority can be held responsible for them.
