Bayer's plea dismissed by the Intellectual Property Appellate Board

The Intellectual Property Appellate Board (IPAB) on Monday upheld the grant of compulsory licence (CL) to the Hyderabad-based Natco Pharma Limited, a generic drug maker, to produce and market Nexavar, a patented cancer drug of multinational pharma major Bayer Corporation. The order will pave the way for reduction in the prices of costly life saving drugs.

Disposing an appeal filed by Bayer Corporation, the Board comprising its Chairman Justice Prabha Sridevan and member D.P.S. Parmar held that various international conventions and Indian laws allowed the member countries to grant such compulsory licence in order to make medicine cheaply available to the public.

Declining to interfere with the order of compulsory licence, the Board said, “We are not inclined to interfere with the order of Controller General in the interest of the public. The invention must be available to the public at reasonable and affordable price if not compulsory licence is given.”

“We must bear in the mind of public interest but neither the investor nor the compulsory licence applicant. Patents are granted to benefit the inventions to the public.”

As per the licence conditions imposed by Controller, Natco had to pay a six per cent royalty to Bayer from the sales of generic drug Nexavar. Modifying this, the IPAB directed Natco to pay seven percent royalty. The IPAB also imposed Rs.50,000 cost on Natco for some “misinformation” in its affidavit.

Bayer obtained a patent in India in 2008 for Nexavar which cost Rs. 2.8 lakh for a pack of 120 tablets, equivalent to a month’s dosage. On March 9, last year, the Controller of Patents, Mumbai, granted the first-ever compulsory licence to Natco to make ‘sorofenib tosylate’, a generic version of Bayer’s high-priced anti-cancer drug Nexavar. Natco was told to sell the pack at Rs. 8,800.

Bayer appealed against the Controller’s order before the IPAB. Among other reasons, it contended that Cipla had started selling its generic version at a lower price, rendering the compulsory licence unnecessary as the drug was available at a reasonable price.

Pronouncing the order on Monday, Justice Prabha Sridevan dealt elaborately with the appeal.

Upholding the compulsory licence, the IPAB pointed out that even after obtaining patent, Bayer had not made the drug available on a large scale and at an affordable price within the stipulated time.

Going into various submissions and affidavits filed by Bayer, the Board also came to conclusion that its pricing of Rs.2.8 lakh was not affordable.

Reuters reports:

In a separate case, Bayer has accused another Indian drugmaker, Cipla, of infringing its patent on Nexavar.

Cipla had launched its generic version of Nexavar before Natco won the compulsory licence. Cipla undercut Natco’s price in May last year and now sells the drug at Rs.6,840 for a month’s dose.

Among other setbacks for Western drug companies, India has revoked patents granted to Pfizer Inc’s cancer drug Sutent, Roche Holding AG’s hepatitis C drug Pegasys and Merck & Co’s asthma treatment aerosol suspension formulation. Another case involving drug patents is now in front of the Supreme Court, with Novartis battling against an earlier decision refusing it a patent on cancer drug Glivec.

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