NATCO v. BAYER: Indian Patent Authority Grants Its First Ever Compulsory License on Pharmaceutical Products

Abstract

In an unprecedented move, the Controller of Patents in India has invoked the compulsory licensing provision of the Indian Patents Act to allow a domestic generic pharmaceutical company, viz., Natco Pharma to manufacture and sell the generic version of Bayer's patent-protected anti-cancer medicine, Nexavar (Sorafenib Tosylate) at a fraction of Bayer's selling price in India. The Controller of Patents reached the decision on the grounds that: (i) the reasonable requirements of the public with respect to patented invention are not met; (ii) that the patented invention was not available to the public at a reasonably affordable price; and (iii) that the patented invention has not been 'worked' in the territory of India. This decision has stirred a debate as to whether the grant of compulsory license could lead to weakening of intellectual property protection in India whereas several consumer and civil society organizations argue that this decision may usher in a new reality which requires the drug prices to be linked to the affordability of the consumers. The underlying message of this decision seems to be that no pharmaceutical company can afford to ignore a market if there are consumers suffering or dying in these countries for want of treatment by a product for which they hold the patent rights.