[Ip-health] KEI Statement on India grant of compulsory license to patents on cancer drug sorafenib (NATCO Vs. BAYER)

Jamie Love james.love at keionline.org
Mon Mar 12 03:29:57 PDT 2012


KEI Statement on India grant of compulsory license to patents on
cancer drug sorafenib (NATCO Vs. BAYER)

The India Controller General Controller General of Patents, Designs &
Trade Marks has just (March 12, 2012) issued an order granting a
compulsory license to patents on the cancer drug sorafenib/Nexavar, in
the matter of NATCO Vs. BAYER. A copy of the decision is attached
below, and is also available from the government's web site here:
http://ipindia.nic.in/ [2]

KEI filed an affidavit in the case, which is available here.
http://keionline.org/node/1359 [3]. The Bayer price in India for
sorafenib was 69 thousand USD per year. A survey of prices on
sorafenib is available here: http://keionline.org/prices/nexavar [4].
Bayer's main defense of the pricing was its program of discounts to
lower income patients, and the fact that CIPLA was selling an
infringing product at a lower price (Bayer is suing CIPLA, and asking
for damages and injunctions).

NATCO, an Indian generic firm, had sought a compulsory license under
the following three grounds of Section 84 of the Patent Act:

(a) that the reasonable requirements of the public with respect to the
patented invention have not been satisfied, or
(b) that the patented invention is not available to the public at a
reasonably affordable price, or
(c) that the patented invention is not worked in the territory of India.

All three grounds were upheld in the decision signed by P.H. Kurian.

The 62 page decision grants the CL for the life of the patent, and
grants a 6 percent royalty, which was at the high end of the UNDP 2001
royalty guidelines. The KEI statement on the decision follows:

Statement of James Love, Knowledge Ecology International

Today India granted a compulsory license on patents held by Bayer on
the cancer drug sorafenib. The Bayer price of INR 3,411,898 per year
(69 thousand USD) is more than 41 times the projected average per
capita income for India in 2012, shattering any measure of
affordability. Bayer tried to justify its high price by making claims
of high R&D Costs, but refused to provide any details of its actual
outlays on the research for sorafenib, a cancer drug that was partly
subsidized by the US Orphan Drug tax credit, and jointly developed
with Onyx Pharmaceuticals. Onyx told the SEC that the cost of R&D,
pre-Orphan Drug tax credit, was $275 million though the 2005 FDA
approval of sorafenib, including outlays on other compounds,
indications that were not approved for marketing, and for expanded
access trials in the United States that had limited value as
scientific experiments. Bayer has made billions from sorafenib, and
made little effort to sell the product in India, where its price is
far beyond the means of all but a few persons.

The Controller rightly rejected the several Bayer's defenses, and
granted the compulsory license, in an early test of the India
requirement that patent monopolies will be limited when products are
not "reasonably affordable." Because the facts in the Bayer case were
extreme, the Controller was faced with a stark choice, and had the
compulsory license been denied, the India statute on "reasonably
affordable" pricing would have seemed like an empty protection for the

The decision granting the license was limited in important ways. Only
NATCO can manufacture under the compulsory license. CIPLA still faces
infringement charges, and would have to seek a separate license. NATCO
cannot import the drug to satisfy the Indian market -- a restriction
that is not that important in India, but which would be very difficult
if imposed outside of India, where the capacity to manufacture with
efficient economies of scale and scope are limited. We were
disappointed that the Controller did not make explicit reference to
the 2001 Doha Declaration on TRIPS and Public Health, that obligates
WTO members to take measures to promote access to medicine for all. It
would have been nice for the decision to acknowledge the several
compulsory licenses on drugs and medical devices that were issued in
Italy and the United States in recent years. [For the US, see:
http://keionline.org/node/862 [5], http://keionline.org/node/1219 [6].
For the four Italian CL cases on drugs, see:
http://keionline.org/content/view/41/1 [7]]

We were pleased that the Controller cited the plain evidence of
inadequate access as a test of the affordability of the product.

Bayer is expected to appeal the decision, and the case may reach the
India Supreme Court. Today the India government took a first step
toward protecting its public from high prices on patented drugs. We
hope this will lead to more standardized policies for the grant of
compulsory licenses when products are so expensive that access is
limited to only the most wealthy patients.

sorafenib_nexavar_compulsory_License_12032012.pdf [8]	2.06 MB
sec84.doc [9]	34.5 KB

Source URL: http://keionline.org/node/1384
[1] http://keionline.org/user/4
[2] http://ipindia.nic.in/
[3] http://keionline.org/node/1359
[4] http://keionline.org/keionline.org/prices/nexavar
[5] http://keionline.org/node/862
[6] http://keionline.org/node/1219
[7] http://keionline.org/content/view/41/1
[8] http://keionline.org/sites/default/files/sorafenib_nexavar_compulsory_License_12032012.pdf
[9] http://keionline.org/sites/default/files/sec84.doc

James Love.  Knowledge Ecology International
http://www.keionline.org, +1.202.332.2670, US Mobile: +1.202.361.3040,
Geneva Mobile: +41.76.413.6584, efax: +1.888.245.3140.  Sometimes I am
using my MaxRoam number: +447937390810

More information about the Ip-health mailing list