Pharma major contested grant of licence to Hyderabad firm for making a drug to treat liver and kidney cancer

In a major relief to generic medicine makers and needy patients, the Intellectual Property Appellate Board on Friday rejected a petition of pharma major Bayer Corporation, seeking a stay on an order of the Controller of Patents, granting compulsory licence to the Hyderabad-based Natco Pharma Limited, a generic drugmaker, for a drug used to treat liver and kidney cancer.

On March 9, 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. Indian patent law allows grant of a compulsory licence to an applicant if the patented drug is not available to the public at a reasonable price.

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. Natco was told to sell the pack at Rs. 8,800. As per the licence conditions, Natco had to pay a six per cent royalty to Bayer from its net sale and manufacture.

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

Dismissing the petition, the Board said: “If [a] stay is granted, it will jeopardise the interests of the public who are in need of the drug. The appellant has not made out any case…”

The grant of compulsory licence to Natco created ripples in the pharmaceutical industry across the globe. One group felt that it would press the generic industry to provide more affordable drugs to the needy and another felt that it would affect innovation. In its petition, Bayer said Cipla was selling its product Soranib, at a maximum retail price of Rs.6,840 for one month’s treatment — a much lesser price, in fact, than Natco’s — thereby creating an overall anti-competitive environment. Bayer also argued that its drug was made available at Rs. 30,000 to patients on the recommendation of the oncologist.

The Board said: “The appellant cannot ride piggy-back on, or take shelter under, the sale by Cipla. It is the duty of patentee that its own supply be made available at [a] reasonable price to the requirement of the public.” Dismissing another miscellaneous petition of Bayer, the Bench declined to go into the merits of its charge that Natco was exporting the drug to Pakistan and China, noting that the allegation was denied by Natco.