[Ip-health] Pharmalot: India Rejects Bayer Appeal On Compulsory License

Thirukumaran Balasubramaniam thiru at keionline.org
Mon Mar 4 23:46:23 PST 2013


India Rejects Bayer Appeal On Compulsory License

By Ed Silverman // March 4th, 2013 // 10:48 am

In a blow to multi-national drugmakers, India’s Intellectual Property Appellate board rejected a closely watched appeal from Bayer, which was fighting a compulsory license that permitted the sale of a generic version of its Nexavar cancer drug. The license was issued last year after Indian authorities determined that Nexavar pricing was deemed too expensive for most people in India. The license was issued to Natco, a large Indian generic drugmaker.

A Bayer spokesman writes us that an appeal is planned. “Bayer is committed to protecting its patents for Nexavar and we will rigorously continue to defend our intellectual property rights within the Indian legal system. We will pursue the case in front of High Court in Mumbai with a writ petition.” The drugmaker argues that 73 percent of Nexavar patients are enrolled in a patient access program created five years ago to increase access.

As noted previously, the initial ruling described was a game changer, because the ruling was the first of its kind and has been expected to prompt other Indian generic drugmakers to seek licenses 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 about $160.

Compulsory licensing, you may recall, has been a heated point of controversy between brand-name and generic drugmakers for several years. And India has become a flashpoint, given its large domestic market. Two months ago, in fact, the government recently took steps to issue licenses for more drugs, including the Herceptin cancer med sold by Roche (RHBBY) and Bristol-Myers Squibb (BMY) (see this).

For their part, global drugmakers argue that pricing reflects the cost of drug development – one reason cited by Bayer in its defense – and that India is discouraging innovation by, effectively, weakening patent protection with such rulings. “The order of the Intellectual Property Appellate Board weakens the international patent system and endangers pharmaceutical research,” the Bayer (BAY) spokesman writes.

“The challenges faced by the Indian healthcare system have little or nothing to do with patents on pharmaceutical products as all products on India’s essential drug list are not patented,” he continues. “The limited period of marketing exclusivity made possible by patents ensures that the costs associated with the research and development of innovative medicines can be recovered.” (Bayer did not walk away entirely empty handed, though. A 6 percent royalty rate that Natco was ordered last year to pay the drugmaker was reportedly increased today to 7 percent).

But consumer advocates and non-governmental organizations have lined up with generic drugmakers to charge that the cost of essential brand-name medicines are often out of reach to most people in poor or developing countries. 

Not surprisingly, several of these organizations were heartened by the latest ruling.

“The decision by the IPAB is an important reaffirmation of the pro-patient provisions in the India patent law, and creates more momentum to address the vast inequality of access to cancer drugs around the world,” writes Jamie Love of Knowledge Ecology International, a non-profit advocacy group that focuses on intellectual property issues that affect access to medications.

“The decision confirms that the Indian patent office is able to use all the means legally at its disposal to check the abuse of patents and open up access to affordable versions of patented medicines,” says Leena Menghaney, the access to medicines campaign manager in India for Medicins Sans Frontierers, also known as Doctors Without Borders. “Most importantly, the decision means that the way has been paved for compulsory licenses to be issued on other drugs now patented in India and priced out of affordable reach.”

In another contentious battle, the Supreme Court in India is expected to decide shortly whether the government had the right to deny a patent to Novartis (NVS) 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 and Novartis statements).


Thiru Balasubramaniam
Geneva Representative
Knowledge Ecology International (KEI)

thiru at keionline.org

Tel: +41 22 791 6727
Mobile: +41 76 508 0997

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