India has granted Natco Pharma Ltd. a compulsory license to produce generic sorafenib tosylate – a drug used to treat kidney and liver cancer that is patented by Bayer and sold under the brand name Nexaver. Under the terms of the license, Natco will sell the generic drug for a price not to exceed Rs. 8880 (USD 178) for a one month supply, and will pay a 6% royalty to Bayer.

CLICK HERE FOR THE TEXT OF THE COMPULSORY LICENSE

This is the first compulsory license for a medicine issued by India.  It was granted under Section 84 of the Indian Patents Act, which allows compulsory licenses when an applicant can show “(a) that the reasonable requirements of the public with respect to the patented invention have not been satisfied, or (b) that the patented invention is not available to the public at a reasonably affordable price, or (c) that the patented invention is not worked in the territory of India.”  The controller of patents decided that each of these three conditions applied.

A press statement by Natco said that the company “welcomes this order and opines that this opens up a new avenue of availability of life savings drugs at an affordable price to the suffering masses in India.”

Michele Childs, Director of Policy and Advocacy for the MSF Access Campaign said in a press release: “This decision serves as a warning that when drug companies are price gouging and limiting availability, there is a consequence: the Patent Office can and will end monopoly powers to ensure access to important medicines.”

James Love, Director of Knowledge Ecology International (which filed an affidavit in the compulsory licensing case) said in a statement:

The Bayer price of INR 3,411,898 per year (69 thousand USD) is more than 41 times the projected average per capita income for India in 2012, shattering any measure of affordability. Bayer tried to justify its high price by making claims of high R&D Costs, but refused to provide any details of its actual outlays on the research… The Controller rightly rejected the several Bayer’s defenses, and granted the compulsory license, in an early test of the India requirement that patent monopolies will be limited when products are not ‘reasonably affordable.’ Because the facts in the Bayer case were extreme, the Controller was faced with a stark choice, and had the compulsory license been denied, the India statute on ‘reasonably affordable’ pricing would have seemed like an empty protection for the public.”

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