Controversial licence granted over patented cancer drug

In September last year we reported that the Indian pharmaceutical company Natco had applied for a compulsory licence to manufacture and sell (in India) a generic version of Bayer’s patented anti-cancer drug sorafenib (Nexavar).  Last week the Indian Controller of Patents published a decision granting this licence.  The Controller’s decision is significant because it is the first time a compulsory licence has been granted for a patented drug in India and it opens the door for other companies to make similar applications.

The terms of the licence allow Natco to supply its generic sorafenib product to patients for ~US$180/month (vastly less than the ~US$5,600/month charged by Bayer).  In return, Natco is required to pay a 6% royalty on its sales.  The licence also requires that Natco supply its generic sorafenib product to at least 600 “needy and deserving patients” each year free of charge.

The decision tackles the vexing issue, faced by developing countries in particular, of wanting to ensure public access to medicines at affordable prices but at the same time wanting to protect the companies bringing these medicines to market.  In this case, the Controller decided to grant the licence having found that Nexavar was being supplied to only 2% of patients in need of treatment (thereby not fulfilling the reasonable requirements of the public) and that the price charged by Bayer was excessive (thereby not fulfilling the requirement to make the medicine available to the public at a reasonably affordable price).

While Bayer is considering its options (including an appeal), the Controller’s decision will no doubt tempt other Indian generic companies looking to market patented drugs to make similar applications.

A copy of the decision can be found here.

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About the Author

James EllsmoreJames is a solicitor with King & Wood Mallesons' Intellectual Property team in Sydney. James advises on intellectual property disputes, with a particular focus on patents. He has acted for a variety of clients in matters concerning patent infringement and revocation proceedings in the Federal Court of Australia, patent opposition proceedings before the Commissioner of Patents, and matters arising from patent licence and technology agreements. James also has experience in the preparation of commercial, R&D and IP agreements for leading universities, research organisations and pharmaceutical companies. He also advises clients on regulatory issues affecting clients in the industrials, consumer and health sectors.View all posts by James Ellsmore

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