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India Forces Drug License

Drug Pricing: Official rules that too few patients can afford a Bayer medication

by Jean-François Tremblay
March 19, 2012 | A version of this story appeared in Volume 90, Issue 12

Credit: Newscom
The average Indian citizen’s annual income is far less than the monthly cost of Bayer’s Nexavar.
Street scene from India to illustrate NOTW on access to drugs in the country.
Credit: Newscom
The average Indian citizen’s annual income is far less than the monthly cost of Bayer’s Nexavar.

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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