[Ip-health] Pharmalot: Game Changer: India Issues 1st Compulsory License

Jamie Love james.love at keionline.org
Mon Mar 12 11:03:19 PDT 2012

I have links to several news stories about the Bayer/NATCO case here:

This is the blog by Ed Silverman, from this morning. Jamie


Game Changer: India Issues 1st Compulsory License
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By Ed Silverman // March 12th, 2012 // 7:26 am

In a landmark ruling, India’s Patent Office has for the first time
granted a generic drugmaker a compulsory license to make a copycat
version of a patented medicine. The license was awarded to Natco,
which can now make a generic of a Bayer kidney and liver cancer
medication called Nexavar, although only for domestic distribution.
The ruling also calls for Natco to pay 6 percent royalties to Bayer.
The move was described as a game changer, because the ruling could
open the door for other Indian generic drugmakers to override patents
for all sorts of medicines. Natco had argued that the cost of Nexavar
is unaffordable for the average Indian and could be sold for a
fraction of what Bayer charges. The decision is expected to lower the
price from $5,500 per person each month to $175, a drop of nearly 97

The drug generated $934 million in global sales in 2010, according to
Indian Patent Office, which also noted, however, that the product was
barely sold in India and called this “neglectful.” “The mandate of the
law is not just supply the drug in the market, but to make it
available in a manner such that substantial portion of the public is
able to reap the benefits of the invention. If the terms are
unreasonable, such as high cost, availability is meaningless,” the
Patent Office wrote (here is the ruling).

Patient advocacy groups and non-governmental organizations hailed the
decision. “This decision marks a precedent that offers hope: it shows
that new drugs under patent can also be produced by generic makers at
a fraction of the price, while royalties are paid to the patent
holder,” says Tido von Schoen-Angerer, who heads the Medecins Sans
Frontieres Access to Essential Medicines campaign. “More generic
companies should now come forward to apply for compulsory licences,
including on HIV medicines, if they can’t get appropriate voluntary

Compulsory licensing, you may recall, has been a flashpoint between
brand-name and generic drugmakers for several years. Consumer
advocates and non-governmental organizations have lined up with
generic drugmakers to charge that the cost of essential brand-name
meds are often out of reach to most people in poor or developing

“The Indian 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,” says Jamie Love of Knowledge Ecology International,
a non-profit advocacy group that focuses on intellectual property
issues that affect access to medications.

For their part, brand-name drugmakers say overriding patents with
compulsory licenses robs them of incentives and rewards for investing
in innovative research. The issue has caused high-profile disputes in
such countries as Thailand, Brazil and South Africa, predominantly
involving HIV medicines (some background here). Indian law, by the
way, allows a drugmaker to apply for a compulsory license only after
the innovator company rejects the voluntary request.

Bayer tried to justify its price by making claims of high R&D costs,
although the Indian patent office noted in its ruling that the
drugmaker did not provide specific figures to bolster its argument.
Bayer also noted argued that discounts were offered to lower income
patients, but another generic maker, CIPLA, was selling an infringing
product at a lower price. Bayer has filed suit against CIPLA.
Nonetheless, Bayer is reportedly expected to appeal the decision to
the Indian Supreme Court. We have asked the drugmaker for a comment
and will update you accordingly. [UPDATE: A Bayer spokeswoman calls us
to say this: "We're disappointed and currently evaluating our legal
options to cotinue to defend our intellectual property."]

In another contentious battle, the Supreme Court in India later this
month will hear arguments over whether the government had the right to
deny a patent to Novartis for the Gleevec cancer med. That dispute
involves a patent based on a new form of the drug, which would offer a
20-year extension. A previous government ruling denied the request
after deciding the new form did not meet a standard for enhanced
efficacy (back story here).
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

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