India's Patent office has issued the first compulsory license to allow a generic manufacturer, Natco, to sell Bayer's cancer medication Nexavar in India. The potentially revolutionary move can be expected to stimulate more such requests from other generic manufacturers.
Natco was awarded the right to sell its version of Nexavar in India only, and will pay Bayer a 6% royalty. Natco plans to drop the price of Nexavar in India from $5500 per person to only $175! -- a 97% price reduction. WOW!
The India Patent office explained its move in following India's law to "make drugs available in a manner that a substantial portion of the public is able to reap the benefits..." Nexavar is barely sold in India, presumably due to its price, and the Patent Office called the situation "neglectful".
The dynamics that will now emerge will be interesting. India Law allows the grant of a compulsory license only after the brand name innovator rejects a suitor's request to receive a license. Given the government's decision in this case, it will be very interesting to see how company's react in the future when approached for a license. My guess is that they will try to cut the best deal they can on their own rather than risk a compulsory grant.
Bayer will appeal the decision to the Indian Supreme Court. You can bet innovators will be watching and may chip in for appeal costs......
Posted by Bruce Lehr Mar 12th 2012