A new prescription

Indian co to manufacture and market generic version of a patented drug. Heres what that means to the patient:

What is the order?

Issued by Controller of Patents P H Kurian on March 9,it grants Hyderabad-based Natco Pharma a compulsory licence under Section 84 of the Indian Patents Act,1970,for Sorafenib tosylate (brandname Nexavar,owned by Bayer Corporation). The order says multinational pharma firm Bayer was not doing enough to scale up the sale of the drug despite getting a patent for it in India in 2008. The Indian Patents Act empowers the government to issue compulsory licences to drug makers after three years of the grant of a patent on products not available at affordable prices.

Whats the drug for?

For treatment of kidney and liver cancer.

What are the orders benefits?

Affordability and availability. The compulsory licence,the first of its kind,enables Natco to sell the drug at a price not exceeding Rs 8,880 for a pack of 120 tablets (one months therapy),rather than the Rs 2,84,428 charged for Bayers Nexavar. The order makes it obligatory for Natco to supply the drug free to at least 600 needy patients per year. The licence is valid till the expiry of the patent in 2021. The judgment is likely to open doors in other areas where drugs are unaffordable or inaccessible.

What is the impact on Bayer and others?

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The order is subject to conditions such as payment of royalty,quarterly,at 6 per cent of the net sales to Bayer. This compensates patent holders while ensuring that competition can reduce prices.

Where did the order go against Bayer?

According to the Patents Controller,Bayer failed not only to price the drug so that it was accessible and affordable in India,but also to ensure it was available in sufficient and sustainable quantities here. Bayer launched the drug in 2006 in many countries outside of India and obtained necessary approvals to launch it in India in January 2008. It said Bayers decision not to import it till 2008 and import only very small quantities thereafter was beyond explanation.

Will it be smooth sailing for Natco?

As Natco launched its drug and sought a compulsory licence,Bayer has imposed half a dozen cases against it including a criminal one. The cost of legal defence is huge,considering that the volume of drugs Natco can retail is constrained by a limited market size.

Whats the law here and there?

In many countries such as Brazil and Thailand,it is the government that decides the portfolio of drugs for which compulsory licences should be granted on the basis of the therapys affordability and accessibility. It is different in India where,under Section 84 of the Patent Act,the compulsory licence mechanism kicks in only when a generic company requests it.

What does Nalco say?

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This opens up a new avenue of availability of lifesavings drugs at an affordable price to the suffering masses in India.