India sinks Bayer's hopes on Nexavar patent

It is a not-so-happy anniversary for Germany's Bayer AG. A year after the company became the first to have a drug targeted by India's compulsory licensing law, an appeals board has said there will be no going back on Nexavar.

The board rejected Bayer's appeal against India, ordering it to turn over the know-how for the cancer drug to India's Natco on the grounds that Nexavar was essential but priced beyond the reach of most Indians, the Economic Times reports. Natco, followed by India's Cipla, have since been churning out generics of the product priced at $130 to $175 a month, compared to the $5,500-per-month cost of Bayer's branded version. One of the judges in the case noted that Bayer had made no effort in three years to make Nexavar more affordable in India. In one small consolation, the patent authority ordered Natco to boost to 7% from 6% the royalty it is paying Bayer after the drugmaker pointed out that the original amount was less than Natco paid to distributors to deliver the drug.

Bayer responded in a statement Monday that it would continue to fight to reverse the decision, which it said undermined an international system that makes such drugs possible, Reuters reports.

Bayer, Roche ($RHHBY), Merck ($MRK) and others have been fighting over patents with India, which has taken an activist position on many of their best-selling drugs. The annual income of many Indians is less than what it costs to buy a month's supply of a cancer treatment. Companies are trying different approaches to find their way through this intellectual-property maze. Roche has partnered with a local manufacturer to try to bring down the price of drugs like its cancer treatment Herceptin, but that has not kept India from moving forward with plans to grant a compulsory license for it.

There was an indication recently that one part of India's government is seeking to clear a path for compromise. India is extending price controls to more drugs, also a practice drugmakers are unhappy about. The Department of Pharmaceuticals has issued draft guidance that says once patented drugs come under price controls, their cost should be considered reasonable and it should not be possible to issue a compulsory license based on affordability, the Economic Times reported. 

- read the Economic Times story 
- here's more from Reuters

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