Monday, March 12, 2012

India and pharma compulsory licensing

IP Komodo has been following the Indian compulsory licensing sagas because of its possible impact in other countries in Asia. The decision in Natco and Bayer came out on 9th March.

The court granted Natco a compulsory license, the first of its kind in India, (and the second in Asia after Thailand). It focused on 4 areas in deciding whether or not Bayer had made the drug reasonably available:

a. Availability. The court sided with Natco, that sales by Bayer were insufficient to supply the Indian market.
b. The price Bayer supplied at was too high for the market.
c.  Bayer failed to work their patent through their small imports and Bayer should be manufacturing its Nexavar in India.
d.  No adjournment was justified to enable Bayer to make more efforts to supply the market.

The court accepted nearly all Natco’s arguments unsurprisingly, given India’s tendency to take a political perspective on access to medicine over patent monopolies. The court pretty much asserted it knew better than Bayer how to make and sell pharma products!

As the Bayer product was not reasonably available a compulsory license was granted. It was priced at 8880 Rps (NATCO’s price was accepted, a fraction of Bayer’s 280,000 Rps sale price), with a 6% royalty.

What are the consequences of this decision outside India ? Other countries are watching this, esp. in SE Asia such as Thailand and Philippines. The requirement to manufacture potentially renders many drugs subject to compulsory licensing. The assertion that the court understands pharma manufacturing and pricing best is of some concern. No-one really expected Bayer to win, but the court made little attempt to be balanced. A position somewhere between Natco and Bayer would probably still have resulted in the grant of the license based on my reading.  

1 comment:

  1. STOP PRESS IP Komodo has been advised of two other SE Asia compulsory licenses granted:

    On October 5 2004, the Indonesian Government issued a compulsory licence for the manufacture of generic versions of lamivudine and nevirapine, until the end of the patent term in 2011 and 2012 respectively. The licence is for government use, and includes a royalty rate of 0.5% of the net selling value.

    On September 29 2004, the Malaysian Minister of Domestic Trade and Consumer Affairs issued a two year Goverment use compulsory licence to import from India didanosine (ddI), zidovudine (AZT) and Lamivudine & zidovidine (Combivir).