[Ip-health] Gauri Kamath on "India’s compulsory licence to Natco : First cut," in Apothecurry

Jamie Love james.love at keionline.org
Mon Mar 12 13:35:37 PDT 2012

I thought Gauri Kamath's report on the Bayer/Natco compulsory license
was pretty good.   Jamie


March 12, 2012, Gauri Kamath, India’s compulsory licence to Natco :
First cut, Apothecurry

I quickly read through the Indian Patent Office’s order granting a
compulsory licence to Hyderabad’s Natco to make and sell its generic
of Bayer’s patented liver and kidney cancer drug Nexavar in India.
While I’m no legal expert and I’ve just speed-read the order, some
things just stand out so here goes :

The order as well as most of the arguments made on both sides are
surprisingly straightforward and easy to understand. The Indian patent
office believes that Natco deserves a compulsory licence because Bayer
has not made the drug available to the actual number of people who
need it in the country, that Nexavar is unaffordable to most Indians,
and that the invention is “not worked” in India which it has
interpreted to mean “manufactured to a reasonable extent” in India
(Nexavar is imported).

The numbers quoted in the order (by various parties) are interesting
and revelatory.

According to GLOBOCON data admitted by the Patent Office, 16,000
Indian patients with liver cancer and 7120 patients with kidney cancer
need Nexavar.  Bayer itself has estimated 8842 patients need Nexavar
each year in India.The IPO estimates that in 2011, Bayer would not
have supplied Nexavar to more than 200 patients.

Then, the cost of therapy with Nexavar is Rs 2,80,428 per month and Rs
33,65,146 per year.  Treatment is lifelong.   In the case of liver
cancer, survival is extended by 6 to 8 months and in the case of
kidney cancer by 4 to 5 years.  For context, according to Indian
government norms, a family of five with an income of above Rs 4805 a
month in urban areas and more than Rs 3924 in rural areas is deemed to
be above the poverty line. Natco proposes to sell at Rs 8800 per
month.  The CL requires it to pay Bayer a 6 per cent royalty on net

The order suggests that Natco has not pulled any punches going all out
to make a case for a CL.  Bayer on the other hand seems to have
presented a rather weak defence. For instance, in trying to prove
availability of the drug it has included the sales of generic Nexavar
made by generic company Cipla even as it is fighting a patent
infringement suit case against the same company!The IPO has refused to
take these into account since as it rightly claims Cipla can be
prevented from selling by a court at any time.

Bayer believes that while assessing affordability the patent office
should take into consideration that health insurance to pay for the
drug doesn’t cost as much as the drug itself.  But even a secondary
school student knows that insurance is bought by only 10 per cent of
Indian households.

It has pointed out that Natco’s blanket CL makes the drug cheaper even
for those who can afford it. But that has only led the IPO to wonder
why Bayer did not follow differential pricing for various classes of
society to begin with!

In a nutshell, the Indian patent office has put all innovators on
notice. I quote from the order , “From its very nature a right cannot
be absolute. Whenever conferred upon a patentee the right also carries
accompanying obligations towards the public at large.”

It is these rights and obligations that Bayer has failed to prove
convincingly that it has discharged. These are my initial thoughts.
More later.

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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