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Indian Court Upholds Breaking Of Bayer Patent

Intellectual Property: Supreme Court decision is likely to increase Western pressure on India to tighten patent laws

by Jean-François Tremblay
December 18, 2014 | APPEARED IN VOLUME 92, ISSUE 51

The Supreme Court of India has dismissed Bayer’s appeal of a decision by the Indian patent office authorizing forced licensing of the cancer drug Nexavar. The ruling will likely increase Western pressure on India to tighten its patent rules.

In 2012, India’s controller general for patents issued a compulsory license of Nexavar, a liver and kidney cancer treatment known generically as sorafenib tosylate. The license allows the Indian drugmaker Natco Pharma to sell generic Nexavar in India after paying a 6% sales royalty to Bayer. The firm’s price for the drug is about $175 a month, 3% of Bayer’s price.

The Supreme Court ruling appears to be the final word on the case. But Bayer is not conceding defeat. “We are analyzing the order and will determine any future course of action afterward,” the firm says.

The charity Doctors Without Borders, which relies on India as a source of cheap generic drugs, applauded the ruling. The group contends that Bayer recovered all the drug’s R&D expenses in the first year after it was launched globally. It further argues that India is in compliance with world trade rules. “The Indian government used legal flexibilities allowed in international law to jump-start generic production,” the group said.

India has been under pressure from Western countries to adopt a stricter patent regime for pharmaceuticals. During a U.S. visit in September, recently elected Prime Minister Narendra Modi agreed to the formation of a panel staffed by senior officials from both countries who will meet annually to discuss intellectual property protection in India.

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