Never say NATCO to Bayer
Generic pharmaceutical company NATCO has been granted a compulsory licence to pharmaceutical giant Bayer’s patent for kidney cancer drug Nexavar in India.
India’s Controller of Patents PH Kurian granted NATCO’s compulsory licence application on March 9.
NATCO filed its application for the Nexavar patent in July 2011 under Section 84 of the Patents Act, 1970, on three grounds.
It argued that Bayer did not supply sufficient Nexavar to meet demand for the drug in India. It also argued that Bayer did not sell Nexavar at a reasonable, affordable price in India and that it did not ‘work’ the patented invention as required under the act.
After 18 hours of hearings, Kurian concluded that NATCO’s application for a compulsory licence could be granted on all three grounds.
He found that Bayer supplied enough Nexavar for only 2 percent of Indian patients who needed it. He also found that Bayer prices the drug at approximately $5700 in India for a month’s course, which is too expensive “beyond doubt”.
Finally, he said that importing Nexavar did not amount to working the drug in India, adding that Bayer failed to grant a voluntary licence on reasonable terms to anyone, including NATCO, who could work the drug in the country.
Remfry & Sagar managing partner Ashwin Julka commented: “Importations not qualifying as ‘working’ in India is likely to raise serious concerns amongst the patent holders. We are of the opinion that it is unlikely that an application for compulsory licence on this ground alone would find favour with the decision-makers. Perhaps, it is time for this issue to be tested before a court of law so that the rules of the game can be settled.”
Kurian imposed several obligations on NATCO and its use of the compulsory licence to Nexavar.
These include a royalty rate of 6 percent on net sales of NATCO’s generic version of Nexavar, which must be paid to Bayer per financial quarter, and that NATCO’s generic version must cost no more than $180 for a month’s course.
In a statement, NATCO said it “welcomes” the decision. It added: “This opens up a new avenue of availability of life-saving drugs at an affordable price to the suffering masses in India.”
Pharmaceutical Research and Manufacturers of America president and chief executive officer John Castellani commented: “If countries begin to routinely use compulsory licences, we could see a ‘race to the bottom’ in which governments in the developing world walk away from their responsibility to support research and innovation in public health.
"In the absence of the investment made by our members, and the resulting research and development, there would be no generic medicines for the world’s patients.”
Julka added: “There is no denying the fact that this decision is likely to have far-reaching ramifications and would embolden the Indian generic companies to take this route more often. It has yet to be seen what strategies the innovator companies adopt to counter this onslaught by the generics.”
Bayer can lodge an appeal against Kurian’s decision to grant NATCO’s application for a compulsory licence to the Nexavar patent with the IP office’s Intellectual Property Appellate Board.
