India Grants First Patent Compulsory License

On March 9, 2012, the Indian Controller of Patents granted Natco Pharma’s application for a compulsory license thereby permitting it to market a generic version of Bayer’s patented cancer drug, sorefanib.  The tribunal considered whether:  1) the reasonable requirements of the public in respect of the drug were being met; 2) the drug was being offered at a reasonable price; and 3) the drug was “being worked” within India.

The tribunal found that Bayer made the drug available to only 2% of the market.  The fact that Bayer was supplying the drug in higher amounts to other parts of the world was also taken into consideration.  The tribunal also found that the drug was not being offered to the public at a reasonable price.  The minimal sales in India was construed by the tribunal to reflect the fact that the drug was out of reach for most Indians because of its price. Finally, the tribunal also held that the drug was not “being worked” in India.  An interpretation that “being worked” was limited to commercially available was rejected.  Instead the tribunal determined that in order to be “worked” a drug must either be made in India by the patentee or by one to whom a license has been given.  Bayer was importing the drug into India and thus did not meet the manufacture/work requirement.

The tribunal rejected an application by Bayer to adjourn the hearing to permit it time to work the invention and provide it to the Indian public at a reasonable price.  The Controller granted a compulsory license with a 6% royalty to Bayer on net sales.  This marks the first compulsory license in Indian history.

A copy of the decision may be found here.