Indian Pharmaceutical Company Takes Compulsory Patent License From Bayer

Los Angeles – India-based Natco Pharma Ltd has licensed a generic version of Bayer’s cancer drug Nexavar, effectively ending Bayer’s so-called monopoly on the drug. Under the licensing agreement, Natco will be required to pay a six percent royalty fee to Bayer.

This case of compulsory licensing, where the government allows another entity to produce a patented product without consent from the patent owner, came out of necessity for public emergency since Bayer’s patented Nexavar was priced out of reach. The Pittsburgh, Pennsylvania-based subsidiary of the German pharma giant markets Nexavar for about $5,600 per month to the Indian market under a patent that will expire in 2020.

Determining that Bayer was not making the drug available to the public at a ‘reasonably affordable price,” the patent office approved Natco Pharma’s application to manufacture the kidney and liver cancer treatment snorefinib. The drug will reportedly be available to Indian patients for $175 per month.

“We are disappointed about this decision,” stated Bayer spokeswoman Sabina Cusimano, adding, “We will see if we can further defend our intellectual property rights in India.”

The ruling from the patent office will likely upset other Western pharmaceutical companies as well. Over the past several years, Western companies have been pushing for stronger patent protections and rules in response to a $26 billion Indian generics industry they claim is infringing on their intellectual property rights. They also argue that the 2005 Patent Act that allows for the compulsory licensing fails to guarantee investors’ rights. Human rights groups insist that the Indian generics are a vital resource for saving lives in poor and underdeveloped countries, where patients cannot afford to pay the high prices for the Western drugs to treat deadly diseases like cancer, HIV, and malaria.

“This is a victory for Indian patients and for India’s generic manufacturers, which are under attack,” said Natco’s general manager, Madineedi Adinarayana. He added that Bayer’s patent “was not working as a patent in India,” and predicted that “many more such cases will follow.”

The 2005 Patent Act requires that a patent be at least three years old before a generics company can apply for a compulsory license. Regardless of the recent law, many Indian pharmaceutical companies are reluctant to apply for the licenses out of fear it may jeopardize future opportunities to manufacture other drugs for Western companies.