India has authorized a domestic pharmaceutical company to manufacture an expensive anti-cancer drug developed by Bayer Corporation. The move undermines Bayer’s patent on the drug, but has been praised by activists because it will make the drug cheaper and more widely available.
Under the ruling by the controller of patents in Mumbai, the Indian drug company, Natco Pharma, can make a generic copy of Nexavar and sell it for a fraction of the price charged by Bayer.
The patented drug is used to treat liver and kidney cancer. The Indian company will sell it for about $175 for 120 tablets compared to approximately $5,500 charged by Bayer. It will pay a royalty to Bayer of six percent.
The move effectively ends Bayer’s monopoly on the drug. Authorities used a rule under which they can grant a “compulsory license” if a drug is not available at a “reasonably affordable price.” This is the first time India has applied the rule.
The Indian patent controller says the drug was clearly unaffordable to most of the country because very few patients had used it.
Bayer had argued that the price should reflect the development cost and not just the public’s buying power. The company has said it is disappointed with the decision and will evaluate its options to defend its intellectual property rights in India.
The decision has been welcomed by Doctors Without Borders, which campaigns for affordable drugs in poor countries. Leena Menghaney, the group’s manager in New Delhi, says there has to be a balance between intellectual property rights and the right of patients to have access to new and expensive medicines.
“What it shows with the Indian system that it has an independent mechanism," Menghaney. "If there is a problem with the pricing of a patented medicine, there is a redressal in the system. We have not seen this kind of mechanism work in other developing countries and would encourage South Africa and other countries like Thailand to adopt the system where a competitor can come forward to supply a more affordable generic version.”
Pharmaceutical analysts say the ruling could set a precedent for other expensive medicines to be licensed to local companies.
They say that it will be a setback for the multinational drug industry in India. The world’s big drug companies argue that they rely on intellectual property protection to fund the high cost of research. The industry has been pushing for stronger patent protections and rules to clamp down on the Indian generics industry.
In the past decade, India has been providing cheap, life-saving medicines for patients in poor countries who cannot afford drugs at Western prices to treat diseases like HIV and malaria. Most of these are generic copies of drugs protected by patents in the United States and Europe.