MSD leaves Netherlands R&D Facility, Compulsory License an Option?

MSD recently announced it will close down the Organon research & development facilities in Oss, near the Netherlands university of Nijmegen. This came as a shock to many in the Netherlands. The departure of Organon is ‘a totally missed chance,’ said Michel Dutrée, head of the Dutch pharmaceutical organization Nefarma. ‘Now you see what happens if the government does not have a proper strategy for innovation.’ Dutrée told the Volkskrant, a major Dutch newspaper, he was concerned other pharmaceutical firms will also now leave. For example, it is still unclear what will happen to the R&D department of Solvay since the company was taken over by Abbott Laboratories, he told the paper.

Dutch government has indicated in its innovation policies that pharma research is key to innovation and to Netherland’s knowledge based economy.  So what use is it to formulate those policies if we seem to have no legal or other means to keep knowledge (R&D) facilities open in the Netherlands once foreign companies decide to close down and outsource their activities to lower costs countries or repatriate?  Valuable jobs are lost, leaving thousands of highly qualified and educated researchers unemployed and our knowledge on pharma lost.  Lip service has been paid to attempts to keep the Netherlands as a Knowledge Science Centre, offering corporate, legal, financial incentives to companies to establish R&D business in Netherlands.

Now MSD announced  to leave Netherlands, lethargy is the predominant reaction among politicians and industry watchers. The question is: does the Dutch government have a weapon against MSD to force them to be actively and financially involved to keep research knowledge in The Netherlands (that is:to actively contribute to the success of a newly to be set up “Science and Research Centre” in Oss?

The answer is, yes we do have a legal instrument, compulsory license (“dwanglicentie”) . Under the Netherlands’ Rijksoctrooiwet (Dutch Patent Act) the Minister of Economic Affairs can force MSD to grant a license under all patents on research methods that are applied by Organon in Oss for reasons “general interest”.

As MSD received major grant backs when it took over Organon from Shering Plough in 2008, the Dutch government should not allow MSD to withdraw from its R&D centre in Oss without major compensation to facilitate the restart of a Pharma Research and Science Centre. To enable this the government has a unique chance to put pressure on MSD to grant a license to this newly to be set up centre to enable the researchers to continue to do the R&D activities on major drug developments.

It would signal a clear message: you cannot just withdraw major R&D activities in Netherlands leaving the country empty handed.  A compulsory license, or at least the threat thereof will give the government a major role in negotiations on the terms under which those pharma companies can withdraw their R&D activities.

For further reading: het Financiële Dagblad and the full article (in Dutch).

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