More details have emerged about Ecuador’s declaration that it will allow local firms to manufacture patented medicines under compulsory licence, in order to reduce their prices.

Last week, it was widely reported that President Rafael Correa had signed a decree, under which the 2,214 pharmaceutical patents currently held in the country would be overridden. An estimated 40% of Ecuador’s population currently has no access to medicines, but this is their human right, said Pres Correa. “All these pharmaceutical products we can produce and copy, we will elaborate in Ecuador,” he stated.

However, since these initial reports, Ecuador’s intellectual property institute, the IEPI, has forecast that only around 200 patented medicines are likely to be targeted for compulsory licensing, and stresses that international royalties will be paid to the patent-holders based on the retail prices of locally-produced medicines. The issue of licenses, which will permit local production or importation of generic versions of the products, will be considered on a case-by-case basis, and the licenses will not remove the right of patent-holders to sell their products in Ecuador, the IEPI adds.

“High costs, insufficient production and a lack of research have contributed to the fact that millions of people do not enjoy equitable access to medicines in developing countries such as Ecuador,” said IEPI president Andres Ycaza.

Essential Action, a nongovernmental organisation (NGO) which has been an active player in the global access to medicines campaign over the last decade, points out that, under Andean Community law, Pres Correa’s declaration in support of access to priority medicines does not by itself issue a compulsory license, but opens the door to competition between generic and patented brand-name drugs through compulsory licensing, and could lead to government policies that expand access to medicines.

The declaration charges the IEPI with establishing royalties and the terms of licenses, in compliance with all applicable national legislation and international rules, says Peter Maybarduk, an attorney with Essential Action.

IFI, the representative association of 14 multinational drugmakers in Ecuador, said last week that it accepted the “democratic” decision by the government “to legally implement this extraordinary measure.”

“No legal right is superior to the requirements of public health, especially in such serious circumstances,” said the IFI in a statement, but it added that its members were disappointed at not having been asked to participate in the process.

243 pharmaceutical companies are currently operating in Ecuador, of which 177 are foreign-owned, and between them this latter group controls 82% of the market. Local industry sources believe that the process of replacing patents on the drugs involved with production licenses could take between six months and a year.