PHARMA LICENSING
“The beginning is easy; what happens next is much harder”—Anonymous
Against the backdrop of an illusory Indian spring, the Indian patent office bequeathed India’s first compulsory licence to a local generic drug manufacturer: Natco Pharma. In doing so, it placed into practical circulation an untested provision—one it, apparently, considered perfect on paper. Germany’s Bayer, which had been granted the patent in question for its liver/ kidney cancer drug Nexavar, has so far kept its future intention on the matter under wraps. Te decision was issued by PH Kurian on his last day in office as the controller general of patents, designs and trademarks. Having essayed many groundbreaking transformations at the patent office during his tenure, he can be said to have ‘gone out with a bang’ aſter seemingly opening the flood gates with this unprecedented ruling.
Before the conclusive hearings which spawned the order, Bayer fought a pitched battle with its entire arsenal to frustrate Natco’s assault.
Commencing with filing of petitions requesting stay of the compulsory licence proceedings before the patent office, Bayer pressed forward by subsequently filing writ petitions before the High Courts of Bombay and Delhi. Tese writ petitions challenged the controller’s initial order recording a prima facie finding of the matter being an appropriate case for grant of a compulsory licence. Bayer was ultimately given the liberty to raise all pleas against the prima facie finding in the compulsory licence proceedings before the patent office.
Despite Bayer’s strong protestations during several protracted hearings, the patent office granted the compulsory licence to Natco upholding all three grounds taken by it, namely: inadequate supply of the drug; unaffordable pricing; and non-working of the patented drug in India.
Te order stated that Bayer’s supply of Nexavar to merely 2 percent of the patient population of
42 World Intellectual Property Review Annual 2012
India does not meet the “reasonable requirements of the public”. In coming to this conclusion, the patent office mainly relied on the ‘statements of working’ filed by Bayer for three calendar years post grant of its patent. In the opinion of the patent office, these statements showed importation of an inadequate amount of Nexavar vis-à-vis the patient population. Also, the patent office refused to accept Bayer’s contention that sales made by Cipla (an alleged infringer) should be taken into account in deciding this issue.
On the issue of affordability, Bayer’s pricing of the drug at approximately INR 280,000 (US $5,700) for a month’s dose was judged to be extremely high by the patent office, leading it to observe that the “drug was not bought by the public due to the fact that the price was not reasonably affordable to them”. Bayer countered that R&D cost in drug discovery is enormous, that more investments are required for future innovations and that affordability to the public should be construed with respect to different
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