As Thailand’s new government considers whether to continue with the country’s controversial compulsory licensing policy, which has enabled it to override the patents on a number of branded drugs, an international mission has confirmed that its use of the mechanism has been legal.

Thailand first made use of the World Trade Organization compulsory licence provisions in November 2006 in order to manufacture a generic version of Merck & Co’s HIV/AIDS drug Stocrin (efavirenz), after Public Health Minister Mongkol Na Songkhla declared that the high cost of the imported branded version was preventing patients in Thailand from accessing it.

Since then, the country has issued a further six compulsory licences, but the new government’s Public Health Minister, Chaiya Sasomsab, has said he want to reverse the policy, questioning its legality and warning of the immense potential costs to the country if major trading partners such as the USA and European Union were to use it as a reason to impose trade sanctions.

However, the report of a seven-member trade mission headed by World Health Organisation officials has affirmed that the use of compulsory licences “is one of several cost-containment mechanisms that may be used for patented essential medicines not affordable to the people or to public health insurance schemes.” The report acknowledges that such processes are often complicated, so: “it is therefore important to establish clear decision-making processes, including the determination or designation of the authorities or bodies charged with responsibility for the various stages of decision-making,” it adds.

The report makes no evaluation of Thailand’s particular use of the process, pointing out that this varies in different countries, “with some adopting administrative procedures and others a mixed system, where initial decisions relating to the granting of compulsory licences and compensation are made administratively and appeals are made to the judicial system.”

Supporters of the policy welcomed the backing for the policy’s legal status by the WHO mission, which also included representatives of the WTO, the United Nations Development Programme and legal experts. This month, the team spent a week meeting with government officials, drugmakers, patients and consumer groups to discuss the issue, as the new Samak Sundaravej government’s commerce, foreign affairs and health ministers considered the policy’s future.

Mr Chaiya has suggested that paying for drugs which Thailand is now making under compulsory licence could cost the country far less than if the USA decided to impose sanctions or a boycott. The US Trade Representative placed Thailand on its Priority Watch list for its patent transgressions in 2007, a move which was welcomed by the Pharmaceutical Research and Manufacturers of America. “In refusing to support the R&D of new medicines, countries such as Thailand - which is the world’s 21st largest economy out of more than 200 countries worldwide - are shifting the burden of R&D costs onto patients in America, the same patients who already shoulder an unfair burden of R&D costs,” said PhRMA chief executive Billy Tauzin.

However, Jon Ungphakorn, chairman of the Thai NGO Coordinating Committee on Development, commented this week that while Thailand has so far issued only seven compulsory licences, between 1969 and 1993 Canada “issued 613 licences, enjoyed the lowest prices for drugs in the developed world and had a more vigorous pharmaceutical industry than the US.”