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    India Grants First Compulsory Licence, For Bayer Cancer Drug

    Published on 12 March 2012 @ 9:02 pm

    By for Intellectual Property Watch

    In a move welcomed by many in the international community, India has granted an application, its first, from a homegrown generic drug maker to manufacture and sell a patented cancer drug under a compulsory licence.

    In an order dated 9 March 2012, the Controller of the Indian Patents Office ruled against the patent owner German pharmaceutical giant Bayer Corporation.

    The link to the decision is here.

    With the ruling, Indian generic drug manufacturer Natco Pharma Ltd. has received a green light to start manufacturing and selling in India Bayer’s patented drug “Sorafenib tosylate.” The compound, used for the treatment of advanced stages of kidney and liver cancer, is sold by Bayer under the brand name Nexavar.

    Natco has already developed a process to manufacture the drug and received a licence to manufacture the drug in bulk and to market it in April 2011. It is expected that Bayer will make an appeal against the decision.

    Bayer launched the drug in 2006. It received a licence to import and market the drug in India on 1 August 2007. The Patent Office found that Bayer did not import the drug at all in 2008 and only started importing in small quantities in 2009 and 2010.

    Seeing that Bayer was not making the drug accessible to more people, Natco applied for a compulsory licence. Compulsory licensing is when a government allows someone else to produce a patented product or process without the consent of the patent owner, but under strict terms. It is one of the flexibilities on patent protection under the World Trade Organization Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).

    “The patentee (Bayer) thus took no adequate or reasonable steps to start the working of the invention in the territory of India on a commercial scale and to an adequate extent,” according to the decision.

    In its defence, Bayer argued that the operation of another pharmaceutical company, Cipla, which is selling a similar drug, is the reason why it could not maximize the distribution of the drug in India. Bayer, in a separate case, has sued Cipla for infringement.

    According to the decision, Natco must pay a quarterly royalty at 6 per cent of the net sales of the drug. This was lower than Bayer’s asking royalty of 15 per cent of net sales.

    “I am satisfied that anything lesser than 6% would not just be just and reasonable given the facts and circumstances of this case,” the decision said.

    A royalty of 6 per cent is aligned with the United Nations Development Programme recommendation of a 4 per cent royalty, which can be adjusted upwards as much as 2 per cent for products of particular therapeutic value or reduced as much as 2 per cent if development of the drug made use of public funds.

    Under the terms of the compulsory licence, Natco shall provide the drug for free to at least 600 needy and deserving patients pear year; sell the drug at no more than 8,880 Indian rupees (about US$178) for a pack of 120 tablets; and is prohibited from outsourcing the manufacturing of the drug.

    Non-governmental groups have welcomed the landmark decision.

    “We hope this will lead to more standardized policies for the grant of compulsory licenses when products are so expensive that access is limited to only the most wealthy patients,” said James Love of the Knowledge Ecology International in a statement posted on his group’s website. The link to the full statement is here.

    Médecins Sans Frontières (MSF, Doctors without Borders) said the ruling ends Bayer’s monopoly in India on the drug and could set precedent for making more expensive patented drugs available for compulsory licensing.

    “But this decision marks a precedent that offers hope: it shows that new drugs under patent can also be produced by generic makers at a fraction of the price, while royalties are paid to the patent holder. This compensates patent holders while at the same time ensuring that competition can bring down prices,” Tido von Schoen-Angerer, director of the MSF Access Campaign, said in a statement.

    Maricel Estavillo, an intern at Intellectual Property Watch, is an LL.M. in Intellectual Property and Competition Law Candidate at the Munich Intellectual Property Law Center (MIPLC). A former business journalist in Manila, Philippines, she is currently working on research on copyright in digital media for her Master’s thesis.

    Maricel Estavillo may be reached at maricelestavillo@gmail.com.

     

    Comments

    1. Novartis’ Indian Patent Law Challenge Postponed Again | Intellectual Property Watch says:

      [...] appeal against India’s grant of a compulsory licence on Bayer anti-cancer drug Nexavar drug (IPW, Public Health, 12 March 2012) is scheduled to be heard on 21 August before the Intellectual Property Appellate Board in Chennai, [...]

    2. Hard Times Ahead For Rights Holders? IPR High On Brussels Agenda Before Recess | Intellectual Property Watch says:

      [...] Office to grant a first compulsory licence on the “Sorafenib tosylate” drug patent by Bayer (IPW, Public Health, 12 March 2012). Parts of that decision had raised “alarm bells” in both the US and the EU administration, [...]

    3. Most-Read IP-Watch Stories Of 2012: India Pharma, Europe, ACTA, WIPO Technical Assistance, Gene Patents | Intellectual Property Watch says:

      [...] India Grants First Compulsory Licence, For Bayer Cancer Drug http://www.ip-watch.org/2012/03/12/india-grants-first-compulsory-licence-for-bayer-cancer-drug/ [...]

    4. Dr Aparna says:

      Please keep me updated on this topic

    5. mirada sustentable » 22º Concurso Internacional de Pintura de Niños sobre el Ambiente says:

      [...] de enfermedades, algo que afortunadamente ya está cobrando luz en la justicia como el caso de esta droga para el cáncer que se transformó en una causa nacional para el gobierno de la India que hizo posible que el [...]


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    We welcome your participation in article and blog comment threads, and other discussion forums, where we encourage you to analyse and react to the content available on the Intellectual Property Watch website. By participating in discussions or reader forums, or by submitting opinion pieces or comments to articles, blogs, reviews or multimedia features, you are consenting to these rules.

    We welcome your participation in article and blog comment threads, and other discussion forums, where we encourage you to analyse and react to the content available on the Intellectual Property Watch website.

    By participating in discussions or reader forums, or by submitting opinion pieces or comments to articles, blogs, reviews or multimedia features, you are consenting to these rules.

    1. You agree that you are fully responsible for the content that you post. You will not knowingly post content that violates the copyright, trademark, patent or other intellectual property right of any third party or which you know is under a confidentiality obligation preventing its publication and that you will request removal of the same should you discover that you have violated this provision. Likewise, you may not post content that is libelous, defamatory, obscene, abusive, that violates a third party's right to privacy, that otherwise violates any applicable local, state, national or international law, that amounts to spamming or that is otherwise inappropriate. You may not post content that degrades others on the basis of gender, race, class, ethnicity, national origin, religion, sexual preference, disability or other classification. Epithets and other language intended to intimidate or to incite violence are also prohibited. Furthermore, you may not impersonate others.

    2. You understand and agree that Intellectual Property Watch is not responsible for any content posted by you or third parties. You further understand that IP Watch does not monitor the content posted. Nevertheless, IP Watch may monitor the any user-generated content as it chooses and reserves the right to remove, edit or otherwise alter content that it deems inappropriate for any reason whatever without consent nor notice. We further reserve the right, in our sole discretion, to remove a user's privilege to post content on our site. IP Watch is not in any manner endorsing the content of the discussion forums and cannot and will not vouch for its reliability or otherwise accept liability for it.

    3. By submitting any contribution to IP Watch, you warrant that your contribution is your own original work and that you have the right to make it available to IP Watch for all purposes and you agree to indemnify IP Watch, its directors, employees and agents against all damages, legal fees and others expenses that may be incurred by IP Watch as a result of your breach of warranty or of these terms.

    4. You further agree not to publish any personal information about yourself or anyone else (for example telephone number or home address). If you add a comment to a blog, be aware that your email address will be apparent.

    5. IP Watch will not be liable for any loss including but not limited to the following (whether such losses are foreseen, known or otherwise): loss of data, loss of revenue or anticipated profit, loss of business, loss of opportunity, loss of goodwill or injury to reputation, losses suffered by third parties, any indirect, consequential or exemplary damages.

    6. You understand and agree that the discussion forums are to be used only for non-commercial purposes. You may not solicit funds, promote commercial entities or otherwise engage in commercial activity in our discussion forums.

    7. You acknowledge and agree that you use and/or rely on any information obtained through the discussion forums at your own risk.

    8. For any content that you post, you hereby grant to IP Watch the royalty-free, irrevocable, perpetual, exclusive and fully sub-licensable license to use, reproduce, modify, adapt, publish, translate, create derivative works from, distribute, perform and display such content in whole or in part, world-wide and to incorporate it in other works, in any form, media or technology now known or later developed.

    9. These terms and your posts and contributions shall be governed and interpreted in accordance with the laws of Switzerland (without giving effect to conflict of laws principles thereof) and any dispute exclusively settled by the Courts of the Canton of Geneva.

     

     
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