India board rules against Bayer in cancer drug patent case

An Indian patent appeals board upheld on Monday a decision to allow a domestic company to sell a generic version of Bayer AG's cancer drug Nexavar, in a blow for global drugmakers' efforts to hold on to monopolies on high-price medicines. The ruling paves the way for the issue of more so-called compulsory licences as governments, particularly in emerging markets such as China and Thailand, battle to bring down healthcare costs and provide access to affordable drugs to treat diseases such as cancer, HIV-AIDS and hepatitis.
Bayer, Germany's largest drugmaker, said it would continue to fight to overturn the decision, which it said weakened the international patent system and endangered pharmaceutical research. Under a global Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, countries can issue compulsory licences on certain drugs that are deemed unaffordable to a large section of their populations.
India's $13 billion drug market is seen by drugmakers as a huge opportunity, but there are concerns about the level of protection for intellectual property in the country - where generic medicines account for more than 90 percent of drug sales - after a series of judicial setbacks for "big pharma". Last year, the Indian patents office allowed Natco Pharma to sell generic Nexavar at 8,800 rupees ($160) for a month's dose - a fraction of Bayer's price of 280,000 rupees.
Bayer challenged this decision to grant Natco a compulsory licence at the Intellectual Property Appellate Board (IPAB) in the southern city of Chennai. On Monday the board dismissed the petition, although it did order Natco Pharma to pay a royalty of 7 percent on sales of generic Nexavar to Bayer, an increase from the 6 percent royalty that had earlier been set.
Also, the board fined Natco Pharma 50,000 rupees for presenting incorrect facts during the legal proceedings. The amount would be donated to a cancer treatment hospital, the board ordered. Announcing the decision, Justice Prabha Sridevan said the kidney and liver cancer drug should be available at an affordable price to everybody. Bayer said in a statement it "strongly disagreed" with the conclusions of the board, adding that it would seek to challenge it at the High Court in Mumbai. "The challenges faced by the Indian healthcare system have little or nothing to do with patents on pharmaceutical products as all products on India's essential drug list are not patented," the company said.