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India's Natco Pharma Ltd. has been granted a compulsory license to sell a generic version of Bayer's cancer drug Nexavar, in what is being seen as a landmark judgment over intellectual property rights for pharmaceutical products in developing countries. This is the first time that an Indian company has been granted a compulsory license, a legally recognized means to force patent holders to grant licenses to generic drug makers, thus ensuring that the poor can afford life-saving medicines.
More information: Defend affordable drug treatment in India

India Ends Bayer Monopoly, Helps Slash Prices for Life-Saving Drugs

CorpWatch, March 12th -- The decision by PH Kurian, the controller general of patents, designs and trademarks in India, to allow a local company to manufacture Sorafenib, a drug used to treat advanced kidney cancer and liver cancer, is a welcome move that supports the access of poor people to cheap life-saving drugs.

Bayer, a German multinational, has been selling Sorafenib, under the brand name of Nexavar, for $5,600 a month. (The average per capita income in India is a little under $100 ie two percent of the price of the drug) Natco Pharma, an Indian company which applied for permission to manufacture and sell the drug, will now be able to sell the drug for $176 a month.

Kurian’s decision is based on an Indian law which is aimed at keeping prices from skyrocketing beyond patients' reach and World Trade Organization rules that allow compulsory licenses for drugs for public health reasons. Few countries do this, however, for fear of the legal challenges that the companies can bring against them. To reinforce his decision, Kurian also noted that Nexavar was often hard to buy in major Indian cities even at the inflated price.

“Bayer has made billions from Sorafenib, and made little effort to sell the product in India, where its price is far beyond the means of all but a few persons,” says James Love of Knowledge Ecology International, an activist group in Washington DC. “The controller rightly rejected the several Bayer's defenses, and granted the compulsory license.”

This is the first time that the Indian law has been used since 2005, when India ended three decades of refusing to recognize international patents on essential drugs in order to keep prices affordable. Another key decision on this matter is expected soon when the Indian Supreme Court hears a case brought by Novartis, a Swiss company, to force Indian companies to stop selling generic versions of Gleevec which is used to treat a deadly form of leukemia. Novartis sells Gleevec for $70,000 a year in the U.S. versus the Indian version which retails for roughly $2,500 a year.

India is not the first country to act on this matter. Between November 2006 and January 2007, Thailand issued compulsory licenses for two AIDS drugs (efavirnz and the combination of lopinavir+ritonavir) and one antihypertension drug (clopidegrel). Several other countries - Ethiopia, the Congo, Tanzania and Uganda – are also considering similar action.

Indian activists have long lobbied the government to take action in support of cheap generic drugs. Amit Sen Gupta from the Indian Peoples Health Movement was one of three groups that put out a press release in 2009 to underscore the importance of the Sorafenib case: “The Bayer case has implications for drug access, not just for patients in India, but for poor people in large parts of the world. It would mean giving sanctity to higher standards of patent protection than what is required even by the TRIPS agreement. Bayer not only seeks to safeguard its own monopoly right, the company also wants to set a precedent that other corporations can benefit from. In essence it would mean that the entry of generic versions of life saving drugs would be delayed.”

Philipp Mimkes from the Coalition against Bayer Dangers, an international network based in Germany, added: “The interest of patients is at risk if marketing approvals are linked with patents. Countries like India must have the possibility to issue compulsory licenses to generic companies or to impose price controls in order to make available affordable drugs. We demand that Bayer quits this suit! Safeguarding public health must take precedence over patents and monopoly profits of drug companies!”

Others have noted that such precedents may also help AIDs patients. “As the HIV crisis continues to escalate, patients cannot continue to be denied access to life-saving drugs,” wrote Priti Radhakrishnan, the co-director of the Initiative for Medicines, Access & Knowledge (I-MAK). “The burden on people living with HIV and on the Indian government’s own health resources will be unbearable if prices escalate.”

Ironically many major pharmaceutical companies take advantage of cheap labor in India to help them boost their profits. “India took (China’s) place as the world’s pharmacy, and in recent decades has been the largest provider of cheap, lifesaving medicines in poor countries across the globe,” write Vikas Bajaj and Andrew Pollack in the New York Times. Doctors Without Borders estimates that 80 percent of the generic AIDS drugs that it distributes to 170,000 patients in Africa are made in India. By Pratap Chatterjee

=> Patent office decision: http://www.ipindia.nic.in/ipoNew/compulsory_License_12032012.pdf

Knowledge Ecology International, 14. February 2012

KEI files affidavit in India compulsory licensing case involving Bayer patents on cancer drug Sorafenib (Nexavar)

KEI has provided an affidavit in an India compulsory licensing dispute involving Natco and Bayer, for patents on the cancer drug sorafenib (sold by Bayer under the brand name Nexavar).

The Bayer price for sorafenib/Nexavar in India is $47 per 200 milligram tablet. At a daily dose of 4 tablets, this comes to $5,637 per month, or more than $68 thousand per year. In 2010, per capita income in India was $1,330.

The Natco case will test the new Section 84 of the India patent act, and in particular, set a precedent for a reasonably affordable price. KEI has some background information on soafenib on the web at http://keionline.org/drugs, including data on research and development, orphan drug designations and global pricing.

The KEI affidavit covers three topics: the standards for determining if a price is reasonably affordable, the research and development that contributed to the development of sorafenib, and the calculations of a reasonable royalty for sorafenib.

A pdf of the filing is available here.

DNA, March 9, 2012

Copies of patented cancer drugs ahead?

Hope floats for liver and kidney cancer patients who find the available patented medication unaffordable, out of reach.

The Mumbai Patent Office will shortly decide whether or not to allow production of the generic version of Nexavar, or sorafenib tosylate.
The drug is sold by German drugmaker Bayer at a whopping Rs280,428 a month. Granted a patent in 2008, it is the only brand of sorafenib legally allowed for sale in the country.
However, two years ago, Mumbai-based Cipla launched at-risk generic sorafenib for Rs28,000 for a month’s treatment, following which Bayer filed an infringement suit against it.
An at-risk launch is when a generic manufacturer challenges the validity of an existing patent.
Meanwhile, Hyderabad-based Natco Pharma requested Bayer for a licence to manufacture the generic version and sell at a more affordable Rs8,880 per month.
But the German firm turned down the request, and Natco applied for a compulsory licence last August in the Patent Office.
With the hearing getting concluded at the Patent Office last week, a decision is expected shortly.
If granted, the compulsory licence would allow Natco to legally sell the generic (it already has manufacturing and marketing approval from the drugs controller), while paying royalties on sale to Bayer.
According to experts, compulsory licensing is a flexibility provided in the Trips (Trade Related aspects of Intellectual Property Rights) agreement of the World Trade Organisation, of which India is a signatory, and can be applied when the patented drug is unaffordable or unavailable.
“Rs280,428 per month is an incredible amount for most Indians. And the medication has to be taken lifelong. This makes it a clear case for compulsory licensing, as the drug is unaffordable,” said a healthcare and patent law expert.
Estimates suggest liver and kidney cancers affect around 30,000 Indians every year, with 24,000 succumbing to them every year. Over 1 lakh Indians are suffering from the two cancers.
The patent expert said that since 2005, when the product patent regime rolled out, several important drugs with stupendous prices have been granted patents (see table). “Generic versions are needed to bring prices down,” he said.
According to the expert, compulsory licensing has been granted in the past by not just poor countries like Cameroon, Mozambique, Zimbabwe and Ghana, but also by several developed and developing countries (see table).
However, the Organization of Pharmaceutical Producers of India, the lobby of MNC drugmakers, feels that for innovator companies, the ability to recoup the value of their products through patents is vital if they have to continue research and development.
The Trips agreement says as much. According to it, granting a compulsory licence does not tear apart the patent, as the patent owner still has rights and gets royalties on sale. By Priyanka Golikeri

Techdirt, March 12th 2012

Putting Lives Before Patents:

India Says Pricey Patented Cancer Drug Can Be Copied

India has an interesting relationship with pharmaceutical patents. In 1970, India did away with drug patents entirely, believing it would help create a domestic drug industry. And it worked. As we discussed in the past:
2,237 licensed drug manufacturers in 1969-1970 grew to 16,000 by 1991-1993, production of drugs grew at an average rate of 14.4% per year from 1980 to 1993, India became a net exporter of pharmaceutical products, and the market share of foreign multinational corporations (MNCs) dropped from 80-90% to 40% (Fink 2005). In 1995, six of the top ten pharmaceutical firms in India were domestic, and employment in the sector had reached half a million people

Now, remember how people say that without intellectual property, industries protected by those monopolies collapse? Yeah, the opposite happened in India. And yes, many were producing generic versions, but not all of them were. Either way, despite all of this success, the international community, pressured by the big pharmaceutical firms, cracked down on such practices, and demanded that if anyone wanted to join the WTO -- an important organization for large countries to be a part of -- they had to recognize pharmaceutical patents as per the TRIPS agreement. India finally did so in 2005.

However, one key point in TRIPS that developing countries such as India and Brazil have paid close attention to is the fact that they can force a compulsory license on a drug patent holder in the interest of public health.

For the first time since re-instating patents on pharmaceuticals, India has granted just such a compulsory license, covering a kidney and liver cancer drug marketed under the name Nexavar. Indian generic drug company Natco requested a license, noting that Nexavar was in short supply in India and exceptionally expensive. A typical dosage costs around $70,000 per year in India -- something Bayer says is necessary to recoup the drug's R&D costs. However, reports show that it cost less than $300 million to develop this drug (not to mention that the US government subsidized the process) and Bayer has already made billions selling the drug around the world. In a detailed ruling (pdf and embedded below), India's Controller of Patents (nice title) granted Natco the right to make the same drug, requiring it to sell it at a significantly lower price than Bayer sells Nexavar for, and then pay back to Bayer a 6% royalty rate (which is actually at the high end of what the UN recommends). Natco has to make the drug itself and can't name it Nexavar, make it look the same or even state that it's the same as Nexavar -- but it can make its own version of the drug and sell it, and the license lasts the life of the patent. Bayer can and almost certainly will appeal, but this is going to be interesting to watch for a few reasons.

The real question here is how the US will react to this. The Obama administration has been trying to exempt drugs that treat non-communicable diseases (such as cancer medication!) from such compulsory license rights. In the meantime, the big (non-Indian) drug companies have been working hard to lock up the Indian drug market with patents. Not surprisingly, the Obama administration and the big drug companies have a cozy relationship when it comes to dealing with patents in India.

It's likely that you'll start to hear some rumblings from the US government about how this kind of ruling is a "problem" and how India isn't "respecting" international patent law. Expect to see diplomatic pressure placed on India to put limits on its compulsory licensing program, and potentially even noises about how India has to change its patent laws to "update" them and "harmonize" them with the world. Also don't be surprised if stuff like this leads India to jump up the charts on next year's Special 301 reports from the USTR, which list "naughty" countries. It's probably too late to make it into this year's list for this particular move. Is it really any wonder that India is so worried about ACTA? It knows that ACTA is entirely about ratcheting up enforcement, without any exceptions for things like this where something as important as saving lives comes into play. by Mike Masnick

LiveMint, Feb 21 2012

Bayer case may set cost precedent

Germany’s Bayer HealthCare AG will be forced to disclose cost data for cancer drug Nexavar next week when India’s patent office holds the second hearing for compulsory licensing of the drug, sought by local drug maker Natco Pharma Ltd, likely setting a precedent for similar revelations to be extracted from other foreign drug makers.
Compulsory licensing amounts to government permission for a drug maker to manufacture a copy of a patented drug if the patentee fails to ensure that market requirement is adequately met in terms of access and affordability within three years of the original patent grant.
Bayer India was granted a patent for Nexavar in 2008 and imports the drug from its parent’s facility abroad. The January hearing was the first on such a matter in India. Both Bayer and Natco declined to comment as the matter is sub judice.
The liver and kidney cancer drug costs about Rs.2.8 lakh for a month’s treatment. Natco said in the application that only 1% of 100,000 patients had access to sorafenib, sold by Bayer as Nexavar, because of the cost, and said it could sell the drug at Rs.8,880 for a month’s treatment.
While adjourning the matter to the last week of February, the Controller General of Patents had asked the patentee—Bayer HealthCare—to submit cost data, including research and development (R&D) expenditure on Nexavar, to justify the price. The German firm had argued it would be difficult to sell the drug at a lower price because of the amount invested in its development.
Experts said the disclosure may result in other overseas companies being forced to reveal the pricing strategy for drugs sold in the country.
“Foreign drug makers, while launching patented drugs in the local market, typically price it high, though no questions are asked about the actual cost and margin. They don’t even disclose it,” said a marketing consultant who has advised multinational drug makers in India. He did not want to be named.
Natco’s application to the patent office was made in August.
“Since affordability was at the centre of the matter in this case, a balanced view on the price of the drug is important to a take decision on it,” said Gopakumar Nair, director of Gopakumar Nair Associates, a Mumbai-based patent law and services firm. “So the patent office’s decision to look at the cost of Bayer as well as the claim of Natco is quite appropriate in this matter.”
Bayer’s disclosure will be critical in the light of Natco’s lawyer alleging in the first hearing that Nexavar was developed as an orphan drug. Such drugs normally receive government grants and other concessions, lowering R&D costs.
An orphan drug is one that addresses a tiny patient population that’s normally ignored by researchers and manufacturers as it doesn’t make commercial sense for them.
“The cost disclosure by Bayer will expose the pricing of many other patented drugs launched by both multinational and local companies in the market,” said a lawyer familiar with the case.
Natco had earlier unsuccessfully approached Bayer for a voluntary licence to allow it to manufacture and sell a generic version.
Bayer’s lawyer said his client refused the voluntary licence as Natco’s “approach was not appropriate” and the correspondence in this regard implied “a tone of a threat” that it may seek a compulsory licence.
According to Natco’s lawyer, Bayer imported only 200 bottles of the drug, which was insufficient to meet market demand. A compulsory licence applicant has to prove that it’s capable of selling the product at a lower cost to meet demand.
Bayer’s working status filing to the patent office for fiscal 2010 showed that it posted sales of Rs.16 crore for the drug. by C.H. Unnikrishnan

more information
=> India: Supreme Court rejects Bayer's appeal for patent linkage

=> Bayer beaten in Indian court over patent law

=> Health groups: Defend affordable drug treatment in India

=> Open letter to BAYER: Trial-related deaths in India