Nexavar: Compulsory license will severely impact global pharma companies

In what can be described as a major concern for the global pharma companies, Hyderabad-based Natco Pharma has triggered statutory compulsory licensing provision under S. 84 of the Patents Act, 1970 to manufacture and sell a generic version of Bayer’s patented anti-cancer drug Nexavar, generically sorafenib tosylate. This development came after Bayer refused Natco’s plea to grant voluntary license in December 2010. In its application for compulsory license, Natco mainly relied upon on the issue of pricing. Natco is reported to have said that it can sell generic version at INR 8900 for a month dosage compared to INR 285000 charged by Bayer. The Controller will now review the application of its merit and proceed as per procedures laid down in the Act but a favourable decision for Natco will certainly open the floodgates for other drug manufacturers to apply for compulsory licenses for most of the patented drugs in India.

Nexavar Patent

Sorafenib, active ingredient of anticancer drug Nexavar belonging to the class of tyrosine kinase inhibitors and has been granted Indian Patent No. 215758. There had been no pre-grant oppositions filed against Nexavar patent application and grant of patent was published on March 28, 2008 whereas one year window period for post-grant opposition ended on March 28, 2009. Sorafenib received marketing approval in India on July 31, 2007 and for additional hepatocellular carenoma indication on January 01, 2008.

Compulsory License

In India, a third party can apply for compulsory license with respect to a patented invention on either of the grounds:

1. reasonable requirements of public remain unmet/unsatisfied
2. not available at reasonable price
3. not worked within the territory of India

However, compulsory license can only be triggered after the expiration of three (3) years from the date of grant of patent. Natco’s application mainly relied upon on the issue of reasonable pricing.

Ongoing Litigation/Opposition

In 2008, Bayer filed an appeal in the Delhi High Court to restrain Drug Controller General of India (DCGI) from marketing approval to Cipla’s generic version of Nexavar. Cipla subsequently filed a post-grant opposition against the grant of Nexavar patent which is currently pending. The appeal was rejected by the High Court¹ which allowed Cipla to receive marketing approval and launch its generic version at risk. In March 2010, Bayer filed another lawsuit in the Delhi High Court for infringement of Nexavar patent against Cipla² which is currently pending. In May 2011, Bayer also filed an infringement lawsuit against Natco³ though Natco has not yet launched its generic version in market and has instead triggered compulsory license option.

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¹ Bayer Corporation & Anr vs. Union of India & Ors, LPA-443/2009 (link)

² Bayer Corporation & Anr. Vs. Cipla Ltd., CS (OS) 523/2010 (link)

³ Bayer Corporation & Anr vs. Natco Pharma Limited, CS (OS) 1090/2011 (link)