We had earlier blogged on applications for compulsory licenses filed by NATCO and Cipla. Thanks to a dear friend, we now have news of a 62-page order delivered on March 9, 2012, P.H.Kurian granting a compulsory license to Hyderabad-based NATCO Pharma in respect of Bayer’s patented drug “Sorafenib Tosylate” which is sold as Nexavar and is protected by the patent no. 215758.
Nexavar is used to treat advanced kidney and liver cancer. The drug prevents growth of new blood vessels and targets other important cellular growth factors. The order treats the drug as “life-extending” drug and not as a “life-saving” drug, which extends the life of kidney cancer patients by 4-5 years, and of liver cancer patients by 6-8 months.
The cost of the therapy using the patented drug is INR 2,80,428 per month and costs approximately INR33.65 lakhs a year. NATCO, on the other hand, proposed a price of INR8800 for a pack of 120 tablets.
The Controller used GLOBOCAN data to peg the number of liver cancer patients as 20,000 and the number of kidney cancer patients as 8900. The Statement of Working filed by Bayer revealed that approximately 200 bottles of the drug were imported in 2009, with no figures for the years 2008 and 2010. The Controller noted that besides being “exorbitantly priced”, the drug was available only in metropolitan cities, and even there, it was out of stock in most pharmacies.
It was also observed that the patentee had reaped revenues in the millions in sales of the drug outside India, whereas the availability of the drug in India left much to be desired. Besides, the patentee imported the drug into India, with there being no evidence of domestic manufacture.
We will discuss the merits of the order in greater detail in a later post. For now, the terms of the compulsory license are as under:
a. The price of the drug covered by the Patent, sold by the licensee shall not exceed Rs.8880 for a pack of 120 tablets, required for one month's treatment.
b. The licensee shall maintain accounts of sale etc. in a proper manner and shall report the details of sales to the Controller as well as the Licensor on a quarterly basis, on or before fifteenth day of the succeeding month.
c. The licensee shall have the right to manufacture the drug covered by the Patent only at his own manufacturing facility and shall not in any whatsoever outsource the production.
d. The license is non-exclusive.
e. The license is non-assignable.
f. The licensee shall pay royalty at the rate of 6% of the net sales of the drug on a quarterly basis and such payment shall be affected on or before fifteenth day of the succeeding month.
g. The license is granted solely for the purpose of making, using, offering to sell and selling the drug covered by the patent for the purpose of treating HCC and RCC in humans within the Territory of India.
h. The licensee shall supply the drug covered by the Patent to atleast 600 needy and deserving patients per year free of cost. The licensee shall annually submit in the form of an affidavit the details of such patients, i.e. name, address and the name of the treating oncologist, to the Office of the Controller of Patents and such report shall be submitted on or before 31st January of the year, in respect of the preceding year.
i. The licensee shall not have the right to import the drug covered by the Patent.
j. The license is for the balance term of the patent.
k. The license does not include any right to represent publicly or privately that the Licensee's product is the same as the Licensor's or that the Licensor is in any way associated with the Licensee's product. The Licensee's product must be visibly distinct from the Licensor's product (e.g. in color and / or shape); the trade name must be distinct, and the packaging must be distinct. The Licensor will provide no legal, regulatory, medical, technical, manufacturing, sales, marketing, or any other support of any kind to the Licensee.
I. The Licensee is solely and exclusively responsible for its product and for all associated product liability. The Licensor, its Directors, Officers, Employees, Agents, and affiliates shall not be held liable in any manner whatsoever for any action of the licensee.
m. The Licensor is free to do whatever it wishes with its residual patent rights subject to the non-exclusive license to the Licensee, and is free to compete with the Licensee and to grant licenses to third parties to compete with the Licensee.