Sunday, 16 September 2012

Compulsory Licensing, Nexavar, Natco Pharma issue

A 'compulsory license' allows an individual or company seeking to use a patent to do so without seeking the patent-holder's consent, and pays the patent holder a set fee for the license. 1

Section 84 of the Indian Patents Act deals with 'compulsory licenses'. The Act says:
At any time after the expiration of three years from the date of the sealing of a patent, any interested person may apply to the Controller of Patents for use of the patented product by:
- alleging that the reasonable requirements of the public with respect to the patented invention have not been satisfied or 
- that the patented invention is not available to the public at a reasonable price 
And seek the grant of a compulsory licence to work the patented invention. 2

This issue has been in the news because of the grant of India's first-ever compulsory license to produce a generic version of the anti-cancer drug Nexavar. Pharmaceutical major Bayer holds the patent for Nexavar, which is used to treat kidney and liver cancer. It costs Rs. 2.8 lakh for a pack of 120 tablets, equivalent to a month’s dosage.  In March 2012, the Controller of Patents, granted the compulsory licence to Natco Pharma to make a generic version of Bayer’s high-priced anti-cancer drug Nexavar mainly on the grounds that most India's cannot afford the medicine. Natco was told to sell the pack at Rs. 8,800. As per the licence conditions, Natco had to pay a six per cent royalty to Bayer from its net sale and manufacture. Bayer appealed against the Controller’s order before the Intellectual Property Appellate Board (IPAB) which rejected its petition in September 2012. 3

The grant of compulsory licence to Natco created ripples in the pharmaceutical industry across the globe. One group felt that it would press the generic industry to provide more affordable drugs to the needy and another felt that it would affect innovation.


1 comment:

  1. One more related issue is the Novartis' drug Glivec. The patent was rejected by the Indian Patent office as the drug does not classify under the "enhanced efficacy" conditionality of the article 3(d) of the Indian Patent Act.