Crunch time: compulsory licensing in India

Pharmaceutical giant Bayer filed an appeal against the granting of a compulsory licence for Nexavar to Indian generic manufacturer Natco, but in March the IPAB dismissed the appeal, as R. Muralidharan and Ashima Katara report.

In a landmark ruling in one of the world’s fastest growing pharmaceutical markets, the Intellectual Property Appellate Board (IPAB) of India upheld the compulsory licence granted to Natco Pharma Limited, an Indian drug manufacturer, for Bayer AG’s Nexavar (sorafenib tosylate), an oncology palliative drug.

Natco approached Bayer for a voluntary licence which was refused. Natco then went ahead to file a compulsory licence application before the Controller of Patents on the grounds that the patentee had not worked the patent in India and the drug in question was being imported by the patentee even three years after the grant of patent; that the cost of Bayer’s patented drug was Rs280,000 ($5,000) per month and because of the high cost, only about 2 percent of the patients needing the medicines were actually buying it. Natco contended that the requirements of the Indian public were not met in a reasonable way, and that the patented invention was not available to the public at a reasonable cost.

Bayer resisted the grant of the compulsory licence, arguing that an import from other territories is very much ‘working of the patent’ in India. Bayer argued that it could only sell limited quantities, essentially because the generic competitor had a cheaper substitute which made it difficult for the patentee to get a market for the higher priced product.