[Ip-health] Natco’s compulsory licence for selling generic copies of Bayer’s cancer drug Nexavar upheld by Ipab

Gopa Kumar kumargopakm at gmail.com
Mon Mar 4 23:01:06 PST 2013

Natco’s compulsory licence for selling generic copies of Bayer’s cancer
drug Nexavar upheld by Ipab
  CHENNAI/MUMBAI An independent authority has ruled in favour of the
government's decision to allow a domestic pharmaceutical company to make
inexpensive copies of German multinational Bayer's anticancer drug priced
at Rs 2.8 lakh a month.

By saying that Natco
5.11 %<http://economictimes.indiatimes.com/natco-pharma-ltd/stocks/companyid-8305.cms>
produce Nexavar, a patented medicine used to treat liver and kidney
cancers, the Intellectual Property Appellate
in effect endorsed the so-called compulsory licensing regime under which
Indian companies can make cheap versions of expensive life-saving drugs.
"The court does not decide for, or against, a company. It takes a decision
based solely on public interest," Justice Prabha
, chairman <http://economictimes.indiatimes.com/topic/chairman> of IPAB,
who pronounced the ruling at a marathon sixhour sitting. "The price of a
drug should be seen from the point of view of the public affordability and
not based on R&D expenses."

In March last year, India granted its first ever compulsory licence, by
ordering Natco<http://economictimes.indiatimes.com/natco-pharma-ltd/stocks/companyid-8305.cms>BSE
5.11 %<http://economictimes.indiatimes.com/natco-pharma-ltd/stocks/companyid-8305.cms>
to sell the cancer <http://economictimes.indiatimes.com/topic/cancer> drug
at Rs 8,800 for a month's therapy, and pay 6% royalty to
-0.80 %<http://economictimes.indiatimes.com/bayer-cropscience-ltd/stocks/companyid-13975.cms>
the total sales, which was disputed by Bayer. "In three years, Bayer has
not taken any steps in revising the marketing strategy and cut the price of
the product," said Justice Sridevan on Monday. The
judge<http://economictimes.indiatimes.com/topic/judge> also
noted that since 2010, Bayer has only been importing the drug for its
philanthropic activities in India and not a single import was made for
commercial use. Natco, which has been asked to increase the royalty it pays
to Bayer to 7% from 6%, welcomed the decision while Bayer was dismayed.

"We strongly disagree with the conclusions of the IPAB. Bayer is committed
to protecting its patents for Nexavar and will rigorously continue to
defend ourIntellectual
within the Indian legal system. We will pursue the case in front of High
Court in Mumbai with a writ petition," Bayer told ET in an emailed response
after the verdict. "The order of the Intellectual Property Appellate Board
(IPAB) weakens the international patent system and endangers pharma
research." The Ipab order is the latest setback to multinational
pharmaceutical companies which have been delivered a string of defeats in a
country where it is becoming established that affordability of medicines
trumps the privileges of patent-holders.

"It is great news as the prices of drugs have dropped by 97%. This
provision in Indian law, which allows generic competitors to apply for
compulsory licensing is very important to check the abuse of patent system
in terms of prices, availability, meeting the needs of the public," said
Leena Menghaney, campaign coordinator at Medecins Sans Frontieres, an
international, independent organisation for medical humanitarian aid.

The most high-profile patent case is the one being fought by Novartis in
the Supreme Court over its cancer drug Glivec. The Swiss company sought and
failed to receive patent protection from IPAB, which said that the
innovation was only incremental. While the Natco-Bayer dispute is regarded
as a test case for the compulsory licensing regime, India's patent law
amended in 2005 does not recognise incremental innovation for patenting.
This has led to a number of disputes in which the global pharmaceutical
companies have ended on the losing side. By disallowing patents for
incremental innovation, India has fostered a thriving generics industry
which is able to supply affordable drugs to hundreds of millions of poor
people around the world. In March, the patent controller issued a
'compulsory licence' for the first time allowing generics company Natco to
make Nexavar.

"Though this ruling has set a precedent for future compulsory licensing
applications, large Indian drugmakers will be reluctant to apply for a
compulsory licence due to their partnerships with multinational drugmakers.
However, rulings like these sow a seeds of doubt in the minds of
multinational drugmakers about the reliability of the intellectual property
regime in India," said Sujay Shetty, head of the life sciences practice at


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