"Bayer is committed to protecting its patents for Nexavar and will rigorously continue to defend our intellectual property rights within the Indian legal system," Bayer added in an e-mail response to Business Standard.
On Monday, the Appellate Board upheld the compulsory licence granted to domestic firm Natco Pharma last year, against Bayer's patented anti-cancer drug Nexavar. The move, which allowed the Hyderabad-based company to manufacture and sell the low priced generic version of the drug, is also expected to pave way for many other generic drug makers to seek compulsory licence for other essential but expensive patented drugs in the country.
With a compulsory licence being granted on Nexavar, the price of the drug is set to come down remarkably. While Bayer's Nexavar was priced at Rs 2.8 lakh a month, the compulsory licence is allowed to Natco Pharma on conditions that it will sell the medicine at Rs 8,800 for a month's therapy, and pay seven per cent royalty to Bayer on the total sales.
The ruling has created a stir in the drug manufacturing industry worldwide. While patient groups and health activists, along with generic developers, have applauded the decision towards making essential medicines affordable, it is seen as a blow to interest and profitability of multinational companies.
Bayer said the IPAB order "weakens the international patent system and endangers pharmaceutical research".
Supporting Bayer's argument, Novartis India's Vice-Chairman and Managing Director Ranjit Shahani, also president of Organisation of Pharmaceutical Producers of India, which represents multinational drug makers, said: "There are two markets in India, but everything here is being directed towards just one of them �" the lowest common denominator." He said there are 10 such licences issued across the world.
"The grounds on which this compulsory licence has been granted is a clear signal that other generic drug makers can also apply for other expensive patent drugs," said K M Gopakumar of Third World Network.
A compulsory licence is a provision under the Indian Patent Act, which allows generic penetration in public interest even as a patent on an innovator product is valid. The provision provides a rare flexibility on patent protection included in the WTO's TRIPS Agreement.
Natco has gained compulsory licence for Nexavar mainly on three grounds under section 84 of Indian Patent Act. The first ground is that the patented drug is allegedly not available at a reasonably affordable price. Secondly, the reasonable requirement of public with respect to the patented invention has allegedly not been satisfied. Besides, the patent on the product has allegedly not worked in India as Bayer is importing the medicine and not manufacturing here, Gopakumar explained.
However, Bayer argues that the challenges faced by the Indian health care system have little or nothing to do with patents on pharmaceutical products as all products on India's essential drug list are not patented.
"One of the main barriers to access to medicines in developing countries such as India is the lack of adequate healthcare services and infrastructure ensuring that drugs will effectively bring treatment to those who most need it," said Bayer.
COMPULSORY LICENCE PROVISIONS UNDER INDIAN PATENT ACT
SECTION 84: Says the generic drug maker has to apply for a voluntary licence to the patent holder company. If the innovator refuses, the generic manufacturer can apply after 3 years from the date of grant of patent to the patent controller for compulsory licence.
SECTION 92: Special provison for compulsory licence on central govt notification says if the government is satisfied, in relation to a patent, that a compulsory licence be granted in circumstances such as urgency or public non-commercial use, it can grant the licence. Then the generic drug maker can apply for it without the patent holder’s nod
SECTION 92A: Compulsory Licence for export of patented products in exceptional circumstances: Govt allows compulsory licence to a company for manufacture and export of patented products to a country having low-manufacturing capacity
SECTION 100: Power for Centre to use invention for purposes of govt: Allows govt to use compulsory licence through PSUs or private sector for own programmes