Bayer’s advanced kidney cancer drug, Nexavar, touches a raw nerve for foreign companies operating in India. It is the first and only drug on which the Indian Patent Office has issued a compulsory licence. The CL, issued in 2012, allowed Hyderabad-based Natco to make a less expensive version of the same drug, on payment of royalty to Bayer. By allowing Natco to export its version of sorafenib tosylate (the active ingredient in Nexavar) for experimental purposes, the latest ruling of the Delhi High Court has drawn upon Section 107A of the Indian Patents Act. Equated with the “Bolar exemption” available in US law, the provision broadly allows generic companies to use limited quantities of their version of the innovator’s drug for research and development. However, clear boundaries have rightly been set so that the generic drugmaker, Natco, does not sell the product on a commercial basis in a third country. The ruling also sets a benchmark in viewing the export issue as independent of the CL on Nexavar. Even with legal eagles in India poring over the order’s minutiae, mulling over the impact of interpreting “sell” (mentioned in Section 107A) as being allowed to “export”, the court’s interpretation is a milestone as it paves the way for generic drugmakers to be ready for post-patent sale.

While the court ruling is well founded, it could spark off another round of jousting between the US and India on intellectual property. India’s Patents Act has been a subject of controversy, particularly Section 3(d), which seeks to prevent ‘evergreening’ masquerading as innovation, and Section 107. India and the rest of the developed world have sought to use flexibilities in TRIPS (to address national emergencies) to produce cheaper versions of life-saving drugs. Hence, South Africa, for instance, has benefited from firms such as Cipla bringing about a drastic reduction in the prices of HIV/AIDS medicine. The ‘export’ of sorafenib tosylate could act as a trigger to reduce kidney cancer treatment costs. But with the Trump administration deciding to do what it takes to push US business interests, inimical noises can be expected all over again. The US Trade Representative’s IP report card on its trading partners, the Special 301 report, is expected later next month.

The bottomline is that the US is the largest market for generic drugmakers, including Indian companies. Therefore, US companies seek similar opportunities in India. The Modi administration has, time and again, hinted at changing its IPR laws. The Justice Prabha Sridevan Committee report has sought to get around the rising antagonisms by mooting the idea of minor patents. However, the paucity of patents and innovation in India is a larger ecosystem issue, related to the standards of science and technology education. To attribute inadequate R&D to a weak patents system would be a gross oversimplification. We need better remedies.

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