Compulsory Licensing

Indias Controller of Patents has given the first-ever compulsory licence (CL) to make generic versions of a cancer drug patented by Germanys Bayer to Hyderabad-based Natco Pharma. This will bring the price of Nexavar, an anti-cancer drug, down to 3% of its current price. Since March 3, 2008, when it got the Indian patent, Bayer has imported Naxevar, selling its monthly dose at the whopping price of . 2,80,428 or $5,420. Unsurprisingly, only 2% of Indian patients have been able to afford it. In its application for compulsory licence to the Controller General of Patents, Natco offered to sell the monthly dose at . 8,800 ($170), a mere 3% of Bayers price. Kurien obliged the numerous patients suffering from liver and kidney cancer, by ruling in favour of Natco. Almost certainly, it will also bring a bucketful of lawsuits challenging the licensing decision. Indias patent laws are, by and large, in tune with international ones. Indian rules say that overseas companies can export patented drugs into India for three years, during which they should set up production of the drug locally. If they dont, and the drug is an important one, the government will arrange for local companies to break down the walls of intellectual property and copy it for local sales. The interpretation that imports do not constitute working of the patent is not helpful for Indian manufacturers, who often benefit when countries, for example in Africa, issue compulsory licences to foreign drugmakers. While sufficient availability and affordability are robust grounds for considering CL, local manufacture is not: it also militates against economies of scale. Natco will pay Bayer a fee of 6% of net quarterly sales. Bayer will sue: the German company invested lots of money to develop the drug, unlike the Indian company.

Parallel imports and the working of compulsory licensing via imports have hugely benefitted Indian pharma companies, many of which are now waiting to ask the government to slap CL on several other drugs that are nearing the end of the three-year indigenisation deadline. The government should not jump the gun. It should first impose price controls on imported drugs. Only if the original drugmaker stops supplies at the lower price, should it impose CL. People could argue that this is a procedural wrinkle before the inevitable imposition of CLs, but it is an important one. It gives overseas drugmakers a chance to sell their medicines at more reasonable prices to avoid a crackdown. It would also safeguard Indias ability to export drugs made under compulsory licences issued by a third country. Room for negotiation is always better than a blow from a regulatory sledgehammer. ****************************************************** ****************************************************** ****************************************************** ************ The compulsory licensing provision arms the government with the power to ensure that medicines are available to patients at affordable rates and has so far been used in Brazil, Thailand and South Africa. It gives the government the right to allow a generic drugmaker to sell copycat versions of patented drugs under certain conditions, without the consent of the patent owner. Global pharma are greatly worried as a result.. given the wording in the indias patent act that had been amended from reasonably priced to reasonably affordable priced has come into effect now. Global drugmakers see emerging markets such as india as key growth oppurtunities, bit remain concerned over Intellectual property protection.

****************************************************** ****************************************************** ****************************************************** ************ Post Bayer episode, Global pharma major Roche is all set to slash the price of two expensive cancer drugs in India-the arrangement involves Herceptin and Mabthera, the wholesale costs of which are about $ 3,000 to $ 4,500 a month per patient. ****************************************************** ****************************************************** *******************************
Cipla, the No. 2 drugmaker by market share in India, cut the price of its generic version of Bayer's cancer drug Nexavar by 75 per cent, nearly two months after India allowed another drugmaker to make a cut-rate version of the drug over Bayer's objections. Cipla said it would sell Nexavar at Rs.6,840 for a monthly dose. Along with generic Nexavar, Cipla also cut the price of lung cancer drug and brain tumour drug between 60 and 75 per cent.

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The Sankalp Rehabilitation Trust hopes that the absence of a patent barrier would spur generic competition to bring down the price of the much-needed pegylated interferon alfa2a (Pegasys), a medicine used to treat Hepatitis C, bringing relief to people suffering from the disease. The Trust had challenged the award of patent of the drug to F. Hoffmann-La Roche A.G. (Roche) based on which the Intellectual Property Appellate Board (IPAB) in India revoked the patentThe patent, granted to Roche in 2006, was the first product patent on a medicine in India under the new Trips-mandated product patent regime for medicines. Despite Sankalps case that Roches claims did not satisfy the patentability requirements under Indian law, in 2009, the Patent Office rejected the post-grant opposition filed by Sankalp and an Indian company and upheld the validity of Roches patent. Sankalp then filed an appeal before the IPAB challenging this decision.