German drugmaker Bayer AG has demanded the withdrawal of the country's first compulsory licence given to Natco Pharma, arguing that a three-fourth reduction in the price of the anti-cancer drug by another Indian firm has made the permit redundant and its patent itself is vulnerable to being revoked.
In March, India allowed Natco Pharma to legally make and sell a low-cost version of cancer drug Nexavar at 3% of the original medicine's price on the grounds that the Rs 2.8 lakh charged by the German drugmaker for a month's dosage was too high for patients in India.
But earlier this month, Cipla Ltd, which has challenged Bayer's patent, slashed the monthly price of sorafenib, the generic version of Nexavar, by 75% to Rs 6,840. Natco has permission to sell its version of sorafenib for Rs 8,800 or less.
In its 37-page appeal, the German company has said Cipla's new price will render Natco's price unreasonable and defeat the purpose of compulsory licensing. It has also challenged the order on other grounds.
"In view of the fact that Cipla... is now selling at Rs 6,840 (with discount, at a price of Rs 5,400) for a month's treatment, i.e. at much lesser price as that of Natco, the very objective of grant of compulsory licence has been defeated, thereby making the grant thereof as infructuous," Bayer said in its appeal to the Intellectual Property Appellate Board (IPAB).
It also argued that because of Cipla's new price, Natco's drug will not 'be able to meet the reasonable requirements of public' as desired by the government order. Therefore, the patent for Nexavar itself can be revoked after two years of compulsory licensing, causing proprietary loss to the patent holder for no fault on its part, Bayer said.
Section 85 of the Indian Patent Act states that a patent can be revoked two years after the grant of compulsory licence if 'reasonable requirement of the public' has not been satisfied or that patented invention is not available at an affordable price to the public.
Bayer said the presence of Cipla's medicine has undercut its market share and is one of the reasons why it is not making full use of its drug.
LEGAL EXPERTS QUESTION BAYER'S ARGUMENT
The drugmaker has also faulted the Controller of Patents for not defining the term 'reasonably affordable price', resulting in a price war between generic companies. Cipla has challenged Bayer's patent for Nexavar and the case is pending in court. It has been allowed to market the drug in the interim and will have to pay a penalty to Bayer should it lose the case.
Legal experts question the German drugmaker's argument. "Bayer is challenging the very legality of Cipla's sales. So it cannot rely on Cipla's sales to ward off a compulsory licensing order," said Shamnad Basheer, professor of IP Law at National University of Juridical Sciences, Kolkata.
Basheer said it was up to Bayer to ensure its patent was not revoked and that it undertook significant price reduction if the number of patients who could afford the drug did not increase. "If anything, Cipla's continued sales will help Bayer ward off the revocation order, since by its own admission, Cipla's sales are ensuring that the reasonable requirements of the public are being met," he said.
IPAB is expected to hear Bayer's appeal on August 21. A Natco Pharma spokesman said the firm will appropriately answer the claims made by Bayer in its reply.
The legal dispute over the grant of compulsory licence to Natco is being closely watched in India and abroad. While foreign drugmakers are keen that the licence be quashed, an order in favour of Natco will embolden other Indian drugmakers to demand compulsory licences from patent holders.
The Patent Controller's office had forced Bayer to grant licence to Natco Pharma as its drug was not reasonably priced, was not adequately available, and was also not manufactured in the country. Under Indian laws, failure to meet any of the three conditions could result in grant of a compulsory licence.
The German firm has said in a country like India where monthly incomes are so less, no price will appear reasonable. It claimed that Cipla's Rs 30,000 price (before price cut) would be unreasonable to many who cannot afford it.
But it is willing to reduce its price to Cipla's earlier level of Rs 30,000, under a company programme, for those patients who cannot afford the original drug. It said along with Cipla, it adequately meets the market requirement, collectively catering to about 44% of the patient pool.