Bayer keeps cheap Nexavar copy from being exported from India

Chalk up a win for Germany's Bayer in its running battle in India over a compulsory license granted to Natco to produce a cheap knock-off of its cancer drug Nexavar. The drug is being sold in India but a high court there says that is as far as the Indian drugmaker can go with it for now.

It is a ruling that gets at the heart of why Western drugmakers so deeply oppose compulsory licensing laws. Proponents argue they are needed to make life saving drugs available to its poorest people. But once technology has been turned over, there is no guarantee the cheap versions won't then be exported to countries where drug developers can still expect to get full price for their products.

The Delhi High Court sided with Bayer this week which had sought to have custom officials seize Natco's copy if it were headed for export, The Financial Express reports. Bayer argued the compulsory license did not give Natco the right to sell outside of India. The Indian drugmaker responded by saying it can't help it if distributors it sells to choose to export the kidney cancer drug. The court said that Natco could seek permission from the Drug Controlling Authority for export privileges and then set an August date for further arguments.

India's government in 2012 granted Natco a compulsory license, forcing Bayer to hand over the technology for marking the drug. Natco soon after hit the market with a pill that it priced at $170 a month, compared with Bayer's $5,500 a month cost. India's Cipla then jumped into the fray saying it would offer a version for $130 a month. Bayer continued to fight the ruling, but a year ago an appeals court turned back its effort, although it did order Natco to increase its royalty payments to Bayer to 7% from 6%.

Bayer, Roche ($RHHBY), Merck ($MRK) and others have had bitter legal fights over patents in 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. But it is such a hot-button issue for Big Pharma that the U.S. Chamber of Commerce has asked the U.S. to tag India a Priority Foreign Country. That is the designation given to the most egregious violators of intellectual property rights, and one that can lead to U.S. trade sanctions.

- read the Financial Express story