India Forces Drug License | March 19, 2012 Issue - Vol. 90 Issue 12 | Chemical & Engineering News
Volume 90 Issue 12 | p. 10 | News of The Week
Issue Date: March 19, 2012

India Forces Drug License

Drug Pricing: Official rules that too few patients can afford a Bayer medication
Department: Business
Keywords: compulsory licensing, Cipla, nexavar, MSF, Natco
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The average Indian citizen’s annual income is far less than the monthly cost of Bayer’s Nexavar.
Credit: Newscom
Street scene from India to illustrate NOTW on access to drugs in the country.
 
The average Indian citizen’s annual income is far less than the monthly cost of Bayer’s Nexavar.
Credit: Newscom

In a rare move with potentially broad implications for Western drugmakers, India’s controller general of patents has authorized a compulsory license for a Bayer cancer drug. The decision allows the Indian drug company Natco Pharma to make and sell a generic version of the drug Nexavar without Bayer’s consent.

The decision marks the first time that an Indian company has successfully petitioned for the compulsory licensing of a patented drug. Under the controller’s ruling, Natco must pay a 6% royalty to Bayer and make the drug available at no cost to 600 needy patients per year.

Bayer may appeal the ruling. “We are disappointed by the decision of the patent controller in India to grant a compulsory license for Nexavar, and we will evaluate our options to further defend our intellectual property rights in India,” spokeswoman Kerstin Crusius says.

The patent controller found that Bayer was pricing Nexavar—a liver and kidney cancer drug known generically as sorafenib tosylate—too high for most Indians and that the company was not distributing it effectively throughout the country. The regulator estimates that 29,000 Indian patients could benefit from Nexavar, but most are unable to afford its $5,600-per-month price.

Compulsory licensing is permitted under international trade rules if certain conditions are met, but only a few countries have resorted to it. In a statement, the health charity Doctors Without Borders saluted the Indian decision and expressed hope that the precedent would lead to the compulsory licensing of other expensive drugs.

“Bayer was not able to do much justice to the product; they priced it like idiots,” says Madineedi Adinarayana, Natco’s general manager of corporate and legal affairs. Natco plans to sell the drug for $175 per month. “We are doing this on humanitarian grounds and in sympathy with people who are facing these types of cancers,” Adinarayana says.

Bayer is currently suing the Indian drug producer Cipla for selling a generic version of Nexavar without permission for about $600 per month.

 
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Comments
FERGUS S. SMITH (Mon Mar 19 10:17:21 EDT 2012)
IF "INTERNATIONAL LAW" REFERS TO A TREATY THAT CONDONES COMPULSORY LICENSING AND ARBITRARY ROYALTIES, THAT TREATY CONDONES THEFT OF INTELLECTUAL PROPERTY. IF THE GOVERNMENT OF INDIA WANTS THEIR CITIZENS TO RECEIVE THE BENEFITS OF THE WORK OF OTHERS, THE GOVERNMENT SHOULD BUY IT, NOT HELP STEAL IT.
ktwop (Tue Mar 20 03:30:19 EDT 2012)
The concept of intellectual property is fundamentally flawed. It relies on creating a monopoly of exploitation with the help of societal "laws" since the "intellect" being protected is insufficiently intelligent to compete without such artificial protection.
Dinesh (Thu Mar 22 15:15:14 EDT 2012)
I am an Indian citizen, i know that many in India cannot afford these high priced medications. Still Indian government officials cannot take such irrational steps. To develop a drug and bring to the market it takes around a billion dollars (considering the failures by many). Who pays for these expenditures? If Bayer has spent $1B for Nexavar development, how can they recover their money if all governments resort to this path? The patent office or the concerned authorities should have made a deal with the parent company for a reasonable pricing, if they agree, give a discount for a poor country, then everything is acceptable.

I am a scientist in the drug discovery industry. Actions like these will discourage scientists and entrepreneurs who invest in this business. Consequently everyone will suffer with lack of medications for life threatening diseases.

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