Patent body rules against Bayer

The Intellectual Property Appellate Board (Ipab) has dismissed an appeal by Bayer AG to quash an earlier order by the Controller General of Patents granting compulsory licence to Hyderabad-based Natco to manufacture a generic version of the cancer-fighting drug Nexavar.

This may come as a big jolt to several multinational drug majors.

Although Ipab has upheld the Patent Controller’s order, it has also allowed a hike in the royalty payable to Bayer to 7% from 6%.

Nexavar (the generic formulation is called Sorafenib) is used to treat primary kidney cancer and advanced and primary liver cancer.

So, two key issues – affordability and product access to the drug – came under the scrutiny of the appellate board, said a source who witnessed the protracted session of Ipab pronouncement on Monday.

Ipab, he said, had also questioned measures taken by Bayer in the last three years to make the drug more affordable.

While Bayer’s Nexavar has been priced at about `2.8 lakh a month, Natco has agreed to sell the drug at about `8,800 a month.

Natco, which had developed the generic version, was seeking a compulsory licence to manufacture and sell the drug in India. Compulsory licence is granted by countries -- without the consent of the innovator or the patentee — when a drug is said to be beyond the affordability of its people.

In March 2012, the Patent Controller granted compulsory licence to Natco under Section 84 of the Indian Patents Act, 1970. It was allowed to make and sell the drug in India at `8,800 for a month’s dose of 120 tablets, and pay a royalty to Bayer on its sales, and also supply the drug free to at least 600 patients.

The compulsory licence is valid till the expiry of Bayer’s patent in 2021.

The compulsory licence opportunity is being keenly watched by other generic makers in the country.

Section 84 (1) (a, b and c) of the Patents Act deals with accessibility, affordability and issue of works carried out on patented innovation in India.

Several drugs that are administered in critical care, including those categorised as orphan drugs in the US and Europe, are expected to come up before the Patents Controller now in the wake of Monday’s Ipab decision favouring Natco.

But those tracking the pharma industry believe the agreements several pharma majors have with multinational drug companies would come in the way of utilisation of the compulsory licence opportunity.

@ramanakv