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Natco Gets First Compulsory Licence

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Germany's Bayer has lost a landmark drug ruling in India, forcing it to grant a compulsory licence for its cancer treatment Nexavar to Natco Pharma in a move that could bring down the cost of other pricey medicines.

The Indian Patent Office issued its first ever compulsory licence to Natco, a local generic drug manufacturer, effectively ending the German drugmaker's monopoly in India on the drug for treating kidney and liver cancer.

In his order, Controller of Patents P H Kurian said the move followed Bayer not doing enough to scale up the sale of the drug despite getting patent for it in India in 2008.

Natco has been allowed to sell the drug at a price not exceeding Rs 8,880 for a pack of 120 tablets required for a month's treatment as compared to a whopping Rs 2.80 lakh per month charged by Bayer for its patented Nexavar drug.

Explaining, the order said: "The patentee (Bayer) did not import the drug at all in 2008 and imported in small quantities in 2009 and 2010."

As per WTO agreement, a compulsory license can be invoked by a national government allowing someone else to produce a patented product or process without the consent of the patent owner. It is done for the cause of public health.

Kurian said: "I do not also see any prompt action in the part of the patentee to start the working of the invention in the territory of India on a commercial scale and to an adequate extent."

Natco's chief financial officer said on Monday it won the right to make the drug under a provision of the Indian Patents Act allowing a compulsory licence after three years of the grant of patent on drugs that are not available at affordable prices.

Medecins Sans Frontieres (MSF), which campaigns for access to drugs in poor countries, welcomed the move, which it said would bring the price of the drug in India down from over $5,500 a month to close to $175.

"This decision serves as a warning that when drug companies are price gouging and limiting availability, there is a consequence," said Michelle Childs, director of policy at the Geneva-based charity.

MSF believes the move means that new medicines in India that are still under patent, including some of the latest treatments for HIV/AIDS, could potentially have generic versions produced for a fraction of the cost.

The move, however, will unnerve international pharmaceutical companies. They are eyeing emerging markets like India as a major growth opportunity but remain worried about intellectual property protection in such countries.

In the current case, Natco will be able to make and sell a low-cost version of Nexavar in India at a price fixed by the Controller General of Patents, Designs and Trademarks. Natco will pay Bayer a small royalty on its sales.

Bayer said in a statement it was evaluating its legal options.

Natco's finance chief Baskara Narayana told Reuters that sales of the generic version of Nexavar, whose generic name is sorafenib, were expected to be about 250 million to 300 million rupees every year once it is launched.


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