Introduction

• The term patent usually refers to the right granted to anyone who invents any new, useful, and non-obvious process, machine, article of manufacture, or composition of matter. Some other types of intellectual property rights are also called patents in some jurisdictions

Patients win Patent War

Life-saving medicines to become affordable as two landmark rulings favour cheaper versions of patented drugs

NOVARITS PLEA

• It's double trouble for global pharma companies in India. On April 1, a Supreme Court bench comprising Judges Aftab Alam and Ranjana Desai dismissed Swiss drug major Novartis AG's seven-year-old plea seeking patent protection for its blood cancer drug sold as Glivec.

• The court held that Glivec was not the outcome of an invention but a known substance as laid down in the Indian Patents Act, 1970.

WHY SC DISMISSED NOVRATIS PLEA.

• Abuse of the patent system must be checked to ensure affordable pricing.

• Availability of the medicines to the poor patients must get priority.

• Slightly modification of the old and existing drugs do not warrant patents.

NATCO v/s BAYER

CASE INTRODUCTION

• Natco v/s Bayer was the first case of compulsory licensing being obtained in India in pharmaceutical field of discipline

• International drug manufacturing firm Bayer Corporation and Indian pharmaceutical company Natco Pharma Limited

• Bayer obtained a patent on Nexavar.

FACTS

• The players of this case are:Bayer Corp – The PatenteeNATCO - The ApplicantNEXAVAR

BAYER CORP

• Ms Bayer Corp is an innovative drug multinational giant based at Germany.

• Invented a drug named ‘SORAFENIB‘.• Life extending drug to be used in liver and

kidney cancer treatment• Brand name 'NEXAVAR'

NATCO

• Indian generic pharmaceutical company• Natco filed an application with the Bayer

Corporation for the Voluntary license of the drug Nexavar (Sorafenib) with reasonable commercial terms and conditions.

• Received a license from the Drug Controller General of India for manufacturing the drug in bulk and marketing in form of tablets in April 2011.

NEXAVAR

• The drug Nexavar (Sorafenib) is the patented product of Bayer Corporation.

• Life extending drug to be used in liver and kidney cancer treatment

CASE

• Natco, a generic drug manufacturing company requested Bayer for giving it a voluntary license.

• The request was denied and so Natco filed an application in the Controller of Patents Court for grant of a compulsory license.

• In accordance with the provision of Indian Law’s Section 84 of the Patent Act, the Indian Controller of Patents started with competing claims of both the patentee (Bayer) and the compulsory license applicant (Natco).

NATCO VS BAYERSISSUE

• The Intellectual Property Appellate Board (IPAB) endorsed the Government's decision to allow India's Natco Pharma to make inexpensive copies of German multinational Bayer's anti-cancer drug Nexavar under a Compulsory Licence (CL)-the first to be issued in India.

• But the issue is far from conclusively settled yet. Bayer is to challenge the IPAB order in the Bombay High Court to defend its Intellectual Property (IP) rights. Its contention is that the order weakens the international patent system and endangers research.

• Consequently, more legal battles on patents were on the cards apart from the ongoing ones such as that of US drug firm Pfizer against Cipla over the alleged infringement of its patent on anti-cancer drug Sutent in India; that of Bayer against Natco over its patent on anticancer drug Nexavar; and of Bristol-Myers Squibb against Natco over its patent on another anti-cancer drug.

THE LAWS• The legal battle in which Novartis was pitted against several Indian

generic drug makers such as Cipla, Hetero, Ranbaxy and Natco began in 2005 when the Mumbai-based Cancer Patients Aid Association (CPAA) challenged the Swiss firm's application for patenting Glivec, made in July 1998. CPAA contended that Novartis was trying to patent a variation of an existing drug, not allowed under Indian patent laws.

• Section 3(d) of the Indian Patents Act, 1970, prohibits the grant of patents to new forms of known substances. "The purpose of the section is to ensure that patent monopolies are not extended and generic versions delayed, unless the new form results in enhanced efficacy,"

• Under World Trade Organization's Trade Related Aspects of Intellectual Property Rights (TRIPS), to which India is a signatory, patents allow companies 20-year exclusivity on manufacture and distribution. Without competition, an exclusive marketer could price a medicine beyond the reach of patients.

• So, companies are allowed to make affordable copies without compensating the innovator after the 20-year period. The point of contention for global majors is the amendment India made to safeguard against frivolous patents and 'evergreening'.

VERDICT OF THE CASE

• Bayer had disputed the Government's decision to grant a CL by ordering Natco to sell the cancer drug at Rs.8,800 for a month's therapy (Bayer's drug cost Rs.2.80 lakh for the same dosage) and pay 6 per cent royalty to Bayer on total sales. "In three years, Bayer has not taken any steps to revise the marketing strategy and cut the price of the product," IPAB directed Natco to increase the royalty to 7 per cent.

• The applicant Natco has very limited rights to manufacture and commercially sell the drug .

• Natco cannot sublicense to another party. It is a non-assignable and non-exclusive license with no right to import the drug.

• The compulsory licensed drug can be sold only for the treatment of liver and renal cancer. Natco cannot use this license for alternate or subsequent use of the drug.

• Natco, as committed before, has to provide the drug free of cost to at least 600 “needy and deserving” patients per year.

• Natco cannot or it has no right to “represent privately or publicly” that the product manufactured by it is the same as Bayer’s Nexavar.

EFFECTS/CONSEQUENCES• In light of the IPAB ruling, the Government will grant more CLs. The

Department of Industrial Policy and Promotion is already considering the grant of CLs for three more anti-cancer drugs.

• Price will fall as more generic version become available.• They say that the rulings are likely to strain the relationship between

Indian firms and their global counterparts operating in the Rs.72,000 crore Indian drug market.

• India's image as an investment hub could, however, suffer in the aftermath of the rulings. Innovator companies will not feel secure investing in a country where their extensively researched products could be subject to CLs. Bayer says the cost of inventing and developing a new medical entity like Nexavar is about Rs.11,775 crore .

• More legal battle will come up.

SOLUTIONS FOR THE FUTURE

• The way out for the Government is to evolve a price mechanism wherein the drugs made by MNCs are sold alongside those made by Indian companies at different prices. In a move that can possibly put an end to the price war.

• The solution is either a cross-subsidy model where the rich pay the full price and the poor pay a subsidised price or the Government buys for the poor and supplies through government hospitals, But such a policy will distract from the grant of CLs and, in turn, delay the entry of low-cost generic versions.

thank youBy-prashant joshi pradhan