* Bayer's appeal against licence for generic Nexavar
* Royalty payment to Bayer raised to 7 pct on Nexavar sales
* Natco Pharma fined for presenting incorrect data
By Anupama Chandrasekaran
CHENNAI, March 4 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
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".
COMPULSORY LICENCE CHALLENGED
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
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.
Natco Pharma Company Secretary M. Adinarayana told reporters
the board had delivered a "reasoned, detailed" decision that
could be "sustained in any court of law".
In a separate case, Bayer has accused another Indian
drugmaker, Cipla, of infringing its patent on Nexavar.
Cipla had launched its generic version of Nexavar before Natco
won the compulsory licence.
Cipla undercut Natco's price in May last year and now sells
the drug at 6,840 rupees for a month's dose.
Among other setbacks for Western drug companies, India has
revoked patents granted to Pfizer Inc's cancer drug
Sutent, Roche Holding AG's hepatitis C drug Pegasys and
Merck & Co's asthma treatment aerosol suspension
Another case involving drug patents is currently in front of
the Supreme Court, with Novartis battling against an
earlier decision refusing it a patent on cancer drug Glivec.
New Delhi has also taken other measures, such as controlling
the prices of generic medicines and providing free medicines at
government-run hospitals that cater to the country's poor.
Last week a government panel recommended a formula to curb
prices of patented drugs to make them affordable for the world's
second-most populous country.