Bayer AG isn’t going to take the compulsory licensing verdict lying down. In March, the Indian Patent Office, in a game-changing ruling allowed Natco, an Indian firm to replicate Bayer’s blockbuster cancer drug Nexavar. This replicated drug cost will cost Rs 8,800 per month as opposed to the Bayer version which costs Rs 2.8 lakh. Under the ruling, Natco would only have to pay Bayer a measly six percent royalty on sales of the drug. India’s patents chief ruled in March that the price of the Bayer version was outrageous and gave Natco a compulsory license to replicate it.
Obviously this didn’t go down well with German pharma giants Bayer who felt that since they had spent so much on research and development it was downright wrong to grant another company license to replicate their drug. It also raises several uncomfortable questions about the future of intellectual property rights. ”We will rigorously continue to defend our intellectual property rights which are a prerequisite for bringing innovative medicines to patients,” Bayer spokesperson Aloke Pradhan said. “The patent controller’s order “damages the international patent system and endangers pharmaceutical research”, Pradhan said. It’s uncertain when the appeal will be heard. Drug firms insist they need patent protection for medicines to recoup R &D costs.
Under the World Trade Organization’s TRIPS Agreement, which governs trade and intellectual property rules, compulsory licences are a legally recognised means to overcome barriers in accessing affordable medicines.
The compulsory license ruling was the first of its kind and has vindicated India’s long term stand on the need for generic drugs. India is the leading manufacturer of generic drugs. Till 2005 it didn’t issue any drug patents but were then obligated to adhere to WTO intellectual property regulations. Since this patent law was passed in 2005, medicine prices have skyrocketed.
Experts have said that this ruling could have a major impact on the way pharmaceutical companies operate, not just in India but around the globe as well, allowing people from developing countries access to patented life-saving drugs at a fraction of the cost. The verdict has forced pharmaceutical companies, Indian and foreign to rethink their game plan in India. Recently, Indian giant Cipla announced that it had reduced the price of three cancer drugs by a whopping 80%, making them cheaper than the Natco version. Swiss drug maker Roche Holding has announced that it intends to sell two of its cancer drugs at cut-price rates. However, there are concerns that even at these cut-price rates the drugs will be too costly for most Indians