India has invoked its compulsory licensing rules for the first time, allowing the domestic drugmaker Natco Pharma to make and sell a version of Bayer's cancer drug Nexavar--despite the fact that Nexavar is still on patent. Natco will pay a 6% royalty, but given the fact that it's going to be selling Nexavar at a substantial discount, that payment probably won't be very significant.
It's the patent board's ruling that's significant. Now that the Indian government has granted one license, more generic drugmakers are expected to petition for their own.
Compulsory licensing is a contentious affair; globally, it's uncommonly used. The idea is that, in a public health crisis, generic drugmakers should be able to sell lower-cost versions of branded drugs, so that more patients can get access to treatment. Some multinational companies have granted their own licenses to low-cost drugmakers for public health (and public relations) reasons, particularly on AIDS drugs for sale in Africa. Government compulsion is a different story; branded drugmakers view that approach as an assault on their intellectual property rights.
Bayer has been fighting Natco's petition for a compulsory license for years, but government officials finally ruled in the domestic company's favor. Under the license, Natco can sell its version of the drug until 2021 at a price no higher than 8,880 rupees, or about $178, per month, Dow Jones reports. Natco says that Bayer sells the branded version for 284,428 rupees a months, or $5,690.
Now, the German drugmaker tells Dow Jones that it is disappointed in the government ruling and plans to "evaluate our options to further defend our intellectual property rights in India." For its part, Natco "opines that this opens up [a] new avenue of availability of life-saving drugs at an affordable price to the suffering masses." Natco expects to reap annual sales of up to $6 million from its Nexavar version, CFO Bhaskar Naranaya told India's CNBC-TV18.
- see the Natco announcement
- read the Dow Jones story
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