Bayer AG (BAYN) plans to appeal a ruling by an Indian regulatory board that allows generic-drug maker Natco Pharma Ltd. (NTCPH) to make a low-priced copy of Bayer’s patented Nexavar cancer medicine.
India’s government last year allowed Natco to produce and sell cheaper copies of Nexavar, a decision that also pressures other brand-name manufacturers to lower prices. Bayer had appealed to the country’s Intellectual Property Appellate Board, and today was told that it had lost, the Leverkusen, Germany- based company said in an e-mailed statement.
“We strongly disagree with the conclusions of the Intellectual Property Appellate Board,” the company said. “Bayer is committed to protecting its patent for Nexavar and will rigorously continue to defend our intellectual property rights within the Indian legal system. We will pursue the case in front of High Court in Mumbai with a writ petition.”
The government’s decision last year marked the first time that India allowed a generic-drug maker to manufacture copies of a medicine that is protected by patents in the country. Under a World Trade Organization agreement known as Trade-related aspects of intellectual property rights or TRIPS, member countries can use these compulsory licenses to ensure access to affordable medicines, according to Doctors Without Borders, which supports the government decision.
The appellate board ruling “weakens the international patent system and endangers pharmaceutical research,” Bayer said. “The limited period of marketing exclusivity made possible by patents ensures that the costs associated with the research and development of innovative medicines can be recovered.”
Since it began selling Nexavar in India in 2008, the company has had a program in place to ensure patients have access to the treatment, Bayer said. The cost of the product is reduced to about 10 percent of the regular price for 73 percent of all Nexavar patients, the company said.
Doctors Without Borders said it hopes today’s ruling means that compulsory licenses will soon be issued for HIV drugs.
“The decision confirms that the Indian patent office is able to use all the means legally at its disposal to check the abuse of patents and open up access to affordable versions of patented medicines,” the group said in an e-mailed statement. “The way has been paved for compulsory licenses to be issued on other drugs, now patented in India and priced out of affordable reach, to be produced by generic companies and sold at a fraction of the price.”
Natco, based in Hyderabad, rose 0.8 percent to close at 426.25 rupees in Mumbai. Bayer rose 0.3 percent to close at 75.57 euros in Frankfurt.
Nexavar is used for the treatment of advanced kidney and liver cancer. The drug had sales of 792 million euros ($1.03 billion) in 2012.
Novartis AG (NOVN) of Basel, Switzerland, has brought a case before India’s Supreme Court over its cancer treatment Gleevec. The drugmaker is challenging laws that say new forms of existing medicines will only be granted a patent if they demonstrate significantly higher effectiveness.
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