Tag Archives: bayer

First Compulsory License Grant in India to Natco

The Controller General of India passed an order of compulsory license (CL) against Bayer’s patent on drug Nexavar on March 09, 2012, which is India’s first compulsory license and is resulting from India’s first CL application filed by Natco last year which was reported and discussed by us here. The complete CL order is available at the Indian Patent Office website here.

The grant permits Nacto to manufacture and market a generic version of Nexavar for Rs. 8800 for 120 tablets per month treatment (against Rs 284,428 per month by Bayer) in return for paying 6% royalty on sales to Bayer. The order also makes it obligatory for Natco to supply the drug free of cost to at least 600 needy patients per year.

The CL was granted in accordance with the grounds described under section 84 of the Indian Patent Act.

Section 84(1) of the Indian Patent’s Act allows any interested person to make an application to the Controller for grant of compulsory license after the expiry of three years from the date of grant of patent on any of the following grounds:

a. that the reasonable requirements of public with respect to the patented invention have not been satisfied

b. that the patented invention is not available to the public at reasonably affordable price,

c. that the patented invention is not worked in India.

The Controller gave his reasoning and conclusion separately on each of the above three grounds and found that all the grounds are satisfied in granting the CL against Bayer. His brief reasonings are as below:

1.      Reasonable Requirements of public are satisfied [84 (1) (a)]

Controller found that the drug is available to only 2% of the eligible patients and thus reasonable requirements of the public are not satisfied. He noted: “…there is requirement of at least 8842 patients. Even after the lapse of three years, the Patentee has imported and made available only an insignificant proportion of the reasonable requirement of the patented product in india.”  He did not take into consideration the sales of the generic version of the same drug in India by Cipla at lesser prices which was one of the reasons given by Bayer for lesser sales of the patented drug by Bayer in India. The Controller has also taken into consideration the Form 27 (Working of invention statement) filed by Bayer in 2009 and 2010 which show only an insignificant quantum of sales (only Rs. 2 crore for 2009) for the eligible patients.

2.      Non-availability at reasonably affordable price [84 (1) (b)]

Controller concluded that sales by Bayer at a price of about Rs. 2,80,000/- (for a month) constitutes a fraction of the requirement of the public and the only reason for not buying by them is due to no reasonable affordability.  He concludes, “Hence, I conclude beyond that the patented invention was not available to public at a reasonably affordably price…Consequently a compulsory license be issued to the Applicant…”

3.      Non-working in India [84 (1) (c)]

Controller after reading together the international agreements on intellectual property including TRIPS, Paris convention and the Indian Patent statutes including 83, 90, 84(6), came to the conclusion that the “worked in the territory of India” means “manufactured to a reasonable extent in India”. And Bayer failed to manufacture the drug in India even after four years from the patent grant date and further failed to grant voluntary licence for manufacturing in India and thus CL is to be issued to the Applicant.

 What can be the possible implications of the grant? :

  • Encouraging  for generic industry: More CLs to follow

Just the other day, even before CL decision came out, one of the top five Indian pharma companies (name undisclosed) discussed with us regarding their interest in filing six CL applications against six patented drugs separately owned by three different big players of the world.

This decision definitely could encourage more generic companies resorting to this route. As we have seen in majority of the generic – innovator patent battles in India, the pricing and public health issues always arise which seems to always go in favour of generic drugs over the patented ones. Further majority of the patented drugs are imported into India and in accordance with this decision, not complying with the “working in the territory of India” condition  which would further the chances of more CL application filings.

  • Bayer’s possible appeal to the court

It is strongly speculated that Bayer would appeal the Controller’s decision and try best to protect its IP rights.

  • MNCs may consider Differential Pricing structure

This decision may make the MNCs to consider the differential pricing structure for selling drugs for different sections/classes of the public in India. Even the Controller himself in his order brought this point as to why Bayer did not consider differential pricing.

  • Very positive for patients in India

This decision definitely would be having positive impacts on the patients suffering from kidney and liver cancers in India, who were not able to afford the such a high cost treatment.

  • Other countries may get motivated

This decision may motivate other low and medium income countries to adopt the same provision in their Patent Laws.

  • Precedent for the following cases

This is the first decision on Compulsory Licence Application in India and would act as precedent for all possible future cases.

About the Author: The Author of this article is Meenakshi Khurana, Patent Specialist at Khurana & Khurana, IP Attorneys and reachable at meenakshi@khuranaandkhurana.com



Natco Pharma has filed India’s first Compulsory Licensing (CL) Application (in accordance with Section 84(1) of the Indian Patents Act) against one of the Bayer’s patented drug Sorafenib, marketed by Bayer as Nexavar for treating Kidney and Liver Cancer. Patent on Sorafenib is granted in India on 03.03.2008 having number IN 215758. This will be a landmark development of such licensing in India and being a test case would set a precedent for the forthcoming similar cases. The CL Application is published in the Official Journal of the Indian Patent Office and can be seen here.

Section 84(1) of the Indian Patent’s Act allows any interested person to make an application to the Controller for grant of compulsory license after the expiry of three years from the date of grant of patent on any of the following grounds:

a. that the reasonable requirements of public with respect to the patented invention have not been satisfied

b. that the patented invention is not available to the public at reasonably affordable price,

c. that the patented invention is not worked in India.

As documentary evidence, Natco has presented a number of facts in support of a prima facie case of reasonable requirements of public not being satisfied.

Natco has stated in its CL Application that Sorafenib is not manufactured in India but is being imported and sold by Bayer at an exorbitant price in India. The average price of the treatment with Sorafenib per month per patient is Rs. 2, 80, 428/- and almost out of reach of the public. Round Natco has stressed that they will be able to sell the drug for Rs. 8,880/- per month! Natco has showed that at least 30,000 patients are diagnosed of Liver or Kidney cancer every year in India and out of these 99% of patients are unable to afford the drug and die every year.

Further Natco stated that there is a limited availability of the drug and is available only in metros cities, for example, Delhi, Mumbai, Chennai and Kolkata with an exclusion of second tier and smaller cities. Also the distributors of Sorafenib are only in Delhi, UP, Punjab, Gujarat, West Bengal, Bihar, Kerala and Tamil Nadu. Natco points that it has the distribution network in all almost every city and district of India.

Natco earlier requested Bayer to receive Voluntary License to manufacture and sell the drug in India by writing to them on 06.12.2010. The letter which was submitted along with the Application as an annexure is not available for its analysis. However, it would interesting to note whom the letter was addressed to and by whom was the same replied as the concerned stakeholder to whom a request Voluntary License (VL) was sent could play a role in deciding the reasonable efforts taken by the Applicant to obtain the VL. We believe that the person being contacted should be a person having due authority to take decisions on such matters, be it in the business development team or the Sr. Management team. Contacting any person not having the necessary authority would not add value and would not be construed as making appropriate efforts to obtain a license from the patentee. This however is a general issue and not pertaining to the case in context. Also, as a practice, the request for VL should disclose the proposed terms and conditions by the party trying to obtain the CL, in absence of which, the offer would not be held explicit.

Further, Natco stated in its Application that Bayer refused on 27.12.2010 without any further discussion whatsoever. According to S. 84(6) (iv) which says that one of the factors which Controller will take into account while considering a CL Application is whether the applicant has made efforts to obtain a license from the patentee on reasonable terms and conditions and such efforts have not been successful within six months. Natco’s CL Application was filed on 28th July 2011.

Another important factor which the Controller will take into account while considering a CL Application is the ability and capability of Natco to manufacture and cater to the needs of the entire public. Nacto has stated in the Application that it can manufacture 20,00,000 tablets  a day when there is need of 4,80,000 tablets a month. Natco has asserted that it can manufacture the drug by employing existing facilities without requirement of any additional investment/plant etc. as Natco has been already manufacturing other anti-cancer products for the last 20 years.

Earlier this year, Natco has also sought for a voluntary license from Pfizer to manufacture and sell Pfizer’s HIV drug maraviroc (marketed as Celsentri), the application is still pending. It is much expected that Pfizer will decline to give such license owing to high R&D investments incurred and it is quite likely that another CL Application might be coming from Natco soon.

This application by Natco has already started motivating the pharma companies in India in preparing to file CL Applications against patented drugs by Foreign players in manufacturing and selling their generic versions in India. A few of these drugs might not yet even have been marketed and might be in the clinical phase, wherein  S. 84 (a) (iii) could be a ground of filing CL in those cases namely the non-working of the patent in India. However, how strong such an application would be on grounds of S. 84 (a) (iii) is debatable as the drug itself is in the clinical phase and cannot anyways be worked upon by any company till the time it is registered with the regulatory authority.

A key point being stressed here is that the first CL Application has not even been granted by the Controller as yet and there is a feeling of urgency that is being felt right away in the Indian Pharma community to file multiple CL’s as possible. I wonder how Natco’c victory in this case could motivate the Indian generic industry to go ahead with the compulsory licensing. However, it is foreseen that the outcome and the ultimate result of this CL will be long awaited owing to the expected court battle between the two as the losing party is likely to challenge the decision. One thing is for sure, grant of the CL to Natco will motivate a large number of Indian pharma players to apply for the same against costly patented drugs (being sold by big Foreign players) mainly on price affordability ground as the Government in many of Indian pharma patent battles has already seemed to be inclined in favor of the generic companies selling cheaper drugs in public interest.

About the Author: Ms. Meenakshi Khurana, Patent Specialist at Khurana & Khurana and can be reached at: meenakshi@khuranaandkhurana.com


Bayer Vs Cipla


Does a combined reading of the Drug Control Act and the Patents Act lead to an inference that no marketing approvals can be granted to a third party for a drug/formulation for which a patent exists? This was a primary question before the Delhi High Court in a recent case involving, inter alia, Bayer & Cipla as the opposing parties.

There has been a long standing controversy on linking patent status with the drug regulatory/marketing approval process. As it happens, the drug regulatory/marketing body is separate from the patent granting body and there is naturally a grey area between the two over their functional overlap while allowing/disallowing a patented drug to get a marketing approval prior to the patent expiration. While countries like USA has a well defined ‘Patent Linkage’ system that allows a patent holder to link his patent rights with generic drug approval process (FDA mandates a patent expiration or patent validity challenge before giving any such market approvals), in countries like India, there has been no such policy bridging the regulatory and the patent approval systems gap.

The facts of the Bayer Vs Cipla case are as under:

Bayer was granted a patent in India for Sorafenib in March 2008. (vide Patent No.  215758). The patent is schedule to expire in 2020. Bayer manufactures and markets its Sorafenib product as Nexavar in India. The background for the current case started when Cipla filed an application with the Drug Controller General of India (DCGI) for a license to manufacture, sell and distribute a generic version of Sorafenib. Bayer opposed it in the court citing a potential patent infringement in case Cipla’s application for marketing approval is accepted.  Bayer particularly cited (a) its right to stop third parties to make, use, offer to sale, or import its patented product without its consent (Section 48 of the Patent Act) and (b) DCGI power not to approve the marketing right for a product that is ‘spurious’ (Section 2 of the Drugs & Cosmetic Act). Bayer’s contention was that an attempt by Cipla to manufacture Sorafenib will make Cipla’s drug a ‘spurious’ drug under the provisions of the Drugs & Cosmetic Act. Going further, Bayer demanded a Patent Linkage based system, wherein the DCGI does not approve the marketing rights for a drug for which a patent exists.

Cipla, along with the other respondents, the DCGI (represented by the Union of India), in its reply, relied on the logic that merely by granting a marketing approval the DCGI or Cipla, would not be infringing the patent rights accorded to Bayer in any manner as the act does not fall under the purview of making, using, offer to sale, or importing its patented product. Further, an act of infringement is established only by a court of law and not merely by a statement by the patentee. In the present case, the DCGI was not a competent authority to decide if the drug for which the marketing approval was sought was infringing any existent patent or not. The mandate of the DCGI is only to assess the safety and efficacy data related to the drug and either approve or disapprove the drug for marketing within in the Indian territory based on these assessments. Whether or not, the drug in question would be potentially infringing any patented product in India, is something which is beyond the scope of DCGI. Also, the Patents Act provides that a drug manufacturer can conduct experiments on a patented drug to meet the requirements of a drug controlling body (Section 107A). Cipla went a step further to claim that the Bayer’s patent is invalid and that Cipla is ready to challenge its validity.

On the ‘spurious’ drug issue, Cipla contends that Bayer’s counsel has failed to rightly interpret the word ‘spurious’ in the actual context that it is purported to be used. The addition of ‘spurious’ drug, Cipla maintains, was to prevent any substitute drug that could be passed off as the original one by use of deceptive marks or packaging. Cipla, on the other hand, is making a generic copy of the drug and not trying to pass off its product over Bayer’s product.

Cipla’s contention also extended to Bayer’s plan to introduce the system of ‘Patent Linkages’ in India. The former came down heavily upon the latter by accusing Bayer to trying to introduce a new system in India, which is only possible by bringing legislative amendments.

Counsel for DCGI maintained that vide Section 107A of the Patents Act, a provision is made to experiment on the patented products for the purpose of submitting data to a drug controlling body. Further, it argued that a patent right, which is a private right, cannot be enforced by a public entity (DCGI). Hence, the idea that the DCGI should also peep in the patent status and then grant the approvals is also not sustainable. DCGI role is restricted to disallow spurious, adulterated and mis-branded drugs and allowing other drugs for market distribution if its meets other experimental requirements.

Based on the arguments of both the parties, Justice Ravindra Bhat of the High Court of Delhi, concluded the following:

  1. The Drugs & Cosmetic Act and the Patents Act are divergent in their objectives and serves very different purposes. While the former was framed to avoid any spurious or adulterated drugs to enter into the market, the latter was framed to allow an innovator company to stop third parties to commercialize their (innovator’s) product/process. The Officials enforcing the provisions of one Act is not technically competent to deal with the provisions of the other Act.
  2. By accepting Bayer’s proposition to allow a Patent Linkage and stop Cipla/DCGI to approve the marketing rights for a drug, judiciary would be attempting to enter a legislative role, which it should not be doing.
  3. Expecting DCGI to take patents into consideration while granting marketing approvals would not only be stretching too much of its normal reach but also an attempt to interpret the Drugs & Cosmetic Act beyond its intended boundaries.
  4. The Patents Act has been amended many a times, latest being in 2005. Had there been any intention by the legislation to bring any changes relating to Patent Linkages, it would have found a place in the amended Act.
  5. On the issue of spurious drug, Judge Bhat was in agreement with Cipla’s contention.

Justice Bhat concluded that the present case was an attempt by Bayer to ‘tweak’ public policies through court judgments. He came down heavily upon Bayer and dismissed the suit with costs.

CURRENT STATUS: Bayer filed an appeal before a division bench of the High Court. Later, the division bench ruled against Bayer, thus paving the way for the launch by Cipla. Bayer has now approached the Supreme Court.

REMARKS: The Judiciary at least seems to be very clear about the separate role and functioning of the Drugs & Cosmetics Act and the Patents Act. It sees a clear cut distinction between scope that one Act allows and the boundaries the other Act sets. The idea of introducing Patent Linkages was of interest to the Big Pharma Players and this decision, if in their favor, could have led to a formal introduction of the Patent Linkages concept in India. Undoubtedly, it would have added to the monopoly of these Big Players. The judgment, therefore, is timely and keeps in mind the larger interest of public. Moreover, it also acts as a warning signal for companies like Bayer and Novartis, which had repeatedly tried to tweak with Indian legislation via court rulings.

Case N0:  WP ( C ) No. 7833/2008

About the Author: Mr. Abhishek Sahay, a Senior Patent Consultant in Institute of Intellectual Property Research & Development (IIPRD) and can be reached:  abhishek@iiprd.com.