Natco Pharmaceutical vs. Bayer Corporation

Synopsis

Natco Pharmaceutical vs. Bayer Corporation

2012 (50) PTC 244 (PO, Mum)

By Ritu Priya Singh and Yukti Choudhary

This globally watched case related to an Indian pharmaceutical company’s request to the country’s patent office for a compulsory license to make a generic version of Bayer’s patented drug to treat liver and kidney cancer. This was finally settled by Indian Patent Office on March 13, 2012. In a first-of-its-kind ruling in one of the world’s fastest growing pharmaceutical markets, the Indian Patent Office has granted permission to pharmaceutical company NATCO to make anti-cancer drug Sorafenib for the Indian market.

The Indian Patent Office’s ruling is subject to certain conditions, such as maintaining account of sales, and payment of royalty at six percent of the net sales on a quarterly basis to Bayer. The order also makes it obligatory for NATCO to supply the drug free-of-cost to at least 600 needy and deserving patients per year. Immediate beneficiaries will be the 29,000 patients suffering from liver and kidney cancer who could not afford treatment with Nexavar, which was patented by Bayer in India in 2008. Bayer sold the drug for Rs 2,80,428 for a month’s dosage of 120 tablets  or Rs 33,65,136 per year. Under the compulsory license, NATCO will make a generic version of the drug in India and has been directed to sell it at Rs 8800 for a month’s dosage, a cost which is 32 times less than that of the original drug. Hailing this order, NATCO opined that this opens up a new avenue of availability of life-saving drugs at an affordable price to the suffering masses in India.

Bayer had contested the Indian company’s application for compulsory licensing. NATCO Pharma, based in Hyderabad, insisted that Bayer was not providing the benefits of its patented medicine by making it unavailable to the needy Indian patients at a reasonable cost. The Indian Patent Office then invoked the provisions of the Trade Related aspects of Intellectual Property Rights (TRIPS) of the World Trade Organization (WTO) and granted compulsory licensing as a requirement for public health. The decision is likely to open up the field for the generics industry or force innovative companies to make drugs more affordable.

The discussion will primarily focus on:

·         TRIPS and patentability of drugs

·         Meaning, Evolution and Effects of Compulsory License

·         Previous international instances of issuance of Compulsory Licenses

     ·         Compulsory License as a social policy tool to provide access to essential medicines.