In a decision that could lead to cheaper drugs, the Indian Patent Office has invoked a provision in the WTO’s TRIPS agreement to allow Hyderabad-based Natco Pharma Ltd to manufacture and sell a generic version of multinational drug maker Bayer’s patented cancer treatment drug Nexavar.
While the immediate benefit for the company is minimal in view of a mere Rs25 crore market for the drug in India, the order will have wider implications for the pharma industry as it opens a route for the Indian pharma companies to manufacture patented drugs.
Under the TRIPS agreement, India had introduced product patents for pharmaceuticals in 1999, which disallowed Indian companies from manufacturing patented drugs.
Reacting to the development, Mr Sarabjit Nangra, a pharma analyst with Angel Broking, said, “It appears that they are trying to strike a fair balance between branded and generic pharma products. This is basically positive for Indian companies as it opens space for them to enter those segments, which were earlier protected by patent regime.”
According to the WTO, the government can issue compulsory licensing to someone to produce the patented product or pro-cess without the consent of the patent owner.
Under Indian patent law, compulsory licensing of a patented drug is granted if it is established that the patent holder can’t meet the market requirement adequately even after three years of the grant of the patent.
Bayer’s patented cancer treatment drug Nexavar costs around Rs2.8 lakh a month for the patient. Natco in its application for the license had claimed that only one per cent of 1,00,000 patients have access to the drug and it could produce and sell the drug at a fraction of this cost at Rs8,880 for a month.
Under Indian patent law, the license winner, however, has to sell low-cost drug only in the domestic market, through a pact with the patent holder, at a price fixed by the Controller General of Patents, Designs and Trademarks.
The license winner also has to pay royalties to the patent holder. In this case, Natco is required to pay eight per cent of its revenue as royalty to Bayer.
“This development is the first of its kind in India, which will not be liked by many multi national companies,” said a pharma consultant who did not wish to be named.
However, Mr P. Bhaskar Narayana, the director of Natco Pharma, claims that the decision would benefit patients, who could not afford the drugs until now.
“This order ends the monopoly of multinational companies. But other companies to could compete with us. Things are changing for the better,” Mr Narayana said.