In what has been billed as landmark ruling the Intellectual Property Appellate Board upheld the country’s first compulsory licence to NATCO Pharma for Bayer’s cancer drug Nexavar recently. In layman language, NATCO, an Indian pharmaceutical company had been the given the right to copy and sell Bayer’s cancer drug Nexavar which costs Rs 2.8 lakh per month. NATCO will sell it for Rs 8,880 per month (97% price decrease)! Team Zee Research Group (ZRG) took the opportunity to understand the ramifications of the verdict from Natco Pharma director and chief financial officer P Bhaskara Narayana. Welcoming the judgment, Narayana is of the view that it is a recognition of the importance of human values over commercial considerations.
ZRG: Indian patent appeals board (IPAB) has ruled in favour of Natco Pharma which allows it to sell generic version of Bayer AG’s cancer drug Nexavar. What is your take on this ruling?
PBN: We welcome this ruling as it recognises the importance of human values more than the commercial values.
ZRG: Post IPAB verdict, the royalty level has been increased from 6 to 7 per cent. How will that impact the margins of the company?
PBN: We are already paying a 6 per cent royalty so a per cent increase won’t have any significant impact on the margins.
ZRG: What is the current revenue from Nexavar drug and what sort of revenue growth are you expecting from this drug in the coming years?
PBN: We have sold about Rs 13-14 crore worth of this drug so far this fiscal. In the coming years, we expect this drug to garner revenues between Rs 15 and Rs 20 crore.
ZRG: Can you elaborate on the actual demand-supply scenario for this drug? What percentage of your revenues come from Oncology segment?
PBN: This is something which we can’t elaborate. However, this drug is used to cure kidney and liver patients. It depends on doctor’s prescription and the stage of disease. Our total consolidated revenues is Rs 700 crores and out of that around Rs 150 crore comes from Oncology segment (around 21 per cent of the revenues).
ZRG: In recent times there were series of judicial setbacks for big MNCs involving drug patents (like Novartis case). Do you think that Indian Patent Office is really too harsh on them or it is favouring low cost generic in order to make costly lifesaving drugs affordable?
PBN: I don’t think we have any right to object the Indian Patent Office. In my view, the Indian Patent Office is doing its job.
What is compulsory licensing?
It’s a practice by which a company’s intellectual property rights can be overruled. The WTO-TRIPS 2006 gives developing nations’ governments the right to hand out compulsory licenses in case it deems that the product is too costly for the public. It’s particularly important in drug pricing because it allows local companies the right to create generic versions of drugs and sell them at a lower rate. The Indian Patent office became the first government body to hand out one when they allowed a local pharma to re-engineer an expensive foreign cancer drug and sell it at a cut-price rate.
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