The document discusses India granting its first compulsory license to Natco Pharma for the generic version of Nexavar, manufactured by Bayer. It summarizes the key points as follows: 1) Natco Pharma received a compulsory license from India's patent office to produce a generic version of Nexavar at a 97% lower price after Bayer refused to provide a voluntary license. 2) Nexavar is used to treat liver and kidney cancer. Bayer holds the Indian patent but was not making it widely available at an affordable price in India. 3) The ruling sets an important precedent and has wider implications for global pharmaceutical companies' businesses in India, though it also aims to balance intellectual property rights

1. Inventi Rapid: Pharmacy Practice Vol. 2013, Issue 2
[ISSN 0976-3848]
2013 ppp 230, CCC: $10 © Inventi Journals (P) Ltd
Published on Web 23/03/2013, www.inventi.in
REVIEW ARTICLE
INTRODUCTION
Generic version of branded pharmaceutical is highly
accepted and demanded lately owing to their low price.
When innovator’s drug product is going off patent,
pharmaceutical companies may file application called
abbreviated new drug application (ANDA) for the approval
of generic version through paragraph IV filing. In certain
cases, without patentee’s consent but state intercession,
generic version can be produced and sold through the
provision of compulsory license. A compulsory license, also
known as statutory license or mandatory collective
management, provides owner of a patent (patentee) the
rights against payment either set by act or determined
through some form of negotiation. Government
intervention is indispensable. It is one of the flexibilities in
patent rules mentioned in the world trade organization
(WTO)’s agreement on intellectual property, the TRIPS
(Trade Related Aspects of Intellectual Property Rights)
agreement. The TRIPS agreement does not specifically list
the reasons that might be used to justify compulsory
licensing. However, the Doha declaration on TRIPS
confirms that countries have liberty to decide the basis on
which compulsory licenses could be granted. The TRIPS
agreement does list a number of conditions for issuing
compulsory licenses, in Article 31. In particular:
1. normally the person or company applying for a license
has to have tried to negotiate a voluntary license with
the patentee on reasonable commercial terms. If it does
not fructify then a compulsory license be issued, and
2. even when a compulsory license has been granted, the
patent owner has to receive payment; the TRIPS
agreement says “the right holder shall be paid adequate
remuneration in the circumstances of each case, taking
into account the economic value of the authorization”,
but it does not define “adequate remuneration” or
“economic value”.
Compulsory licensing must meet certain additional
requirements: it cannot be given exclusively to licensees,
1Department of Pharmacognosy, Smriti College of Pharmaceutical
Education, 4/1, Pipliya Kakkad, Mayakhedi Road, Nipania-452010, Indore,
Madhya Pradesh, India.
E-mail: Gangwal.amit@gmail.com
*Corresponding author
but the patent holder is free to make it, and it should be
subject to legal scrutiny in the state. For “national
emergencies”, “other circumstances of extreme urgency” or
“public non-commercial use” (or “government use”) or
anti-competitive practices, there is no need to try first for a
voluntary license. It’s the only instance when the TRIPS
Agreement specifically links emergencies to compulsory
licensing: The purpose is to save time by circumventing
negotiating steps, but the patent owner still has to be paid.
The agreement on TRIPS also specifies provisions that shall
be followed if a compulsory license is allowed. Some
situations in which a compulsory license may be granted
include lack of working over an extended period in the
territory of the patent, inventions funded by the
government, failure or inability of a patentee to meet a
demand for a patented product and where the refusal to
grant a license leads to the inability to exploit an important
technological advance, or to exploit a further patent. [1]
Article 31.f of TRIPS requires that compulsory licenses be
used "principally" for local markets and it's not allowed to
import product for commercial gains.
NEXAVAR
Hepatocellular carcinoma (HCC) is the third leading cause
of cancer death globally with most deaths occurring within
a year of finding the disease. No standard therapy exists for
advanced HCC. Nexavar (sorafenib) is a multikinase
inhibitor possessing anti-angiogenic and anti-proliferative
actions. Nexavar is the earliest systemic treatment to
improve survival in advanced HCC.
As per the information mentioned on Onyx
Pharmaceuticals, Inc., & Bayer Health Care Pharmaceuticals,
Inc. website, “Nexavar is an anticancer medicine used to
treat a certain type of kidney cancer called advanced renal
cell carcinoma (RCC), or a certain type of liver cancer
known as HCC, when it cannot be treated with surgery. It is
an oral multi kinase inhibitor for the treatment of two
common types of cancer, HCC and RCC. Until now, patients
with HCC have had limited treatment options. Now,
Nexavar offers a new treatment option with proven clinical
benefit for HCC. Nexavar is a targeted anti cancer medicine
that belongs to as news class of drugs called signal
transduction inhibitors (STIs)”. [2]
Will Nexavar® (Sorafenib Tosylate) Become Unprecedented
Case Study?
Amit Gangwal1*, Sanjay Jain1
Abstract: Equations are changing in Indian pharmaceutical houses like never before especially after closing down or waning of
much-talked about reverse engineering in biggest democracy of the world. Being a signatory country in GATT, India is bound to
follow rules in treaty. Pipeline may yield some fruitful drug candidates in coming years, but so far drug discovery scenario in
India is not commendable. Recently, using compulsory license provision, Hyderabad based Natco pharma got success in
launching generic version of Nexavar (Nexavar is manufactured by Bayer Health Care AG, Leverkusen, Germany for Bayer
Pharmaceuticals Corporation, West Haven, Conn. and by Onyx Pharmaceuticals, Inc., Emeryville, California) and made history by
becoming the first pharma industry in India to make use of compulsory license by state intervention. This article will take reader
through various provisions of compulsory license, legal battle besides ramification of this ruling of Indian court in the favour of
Natco pharma.
1

2. Inventi Rapid: Pharmacy Practice Vol. 2013, Issue 2
[ISSN 0976-3848]
2013 ppp 230, CCC: $10 © Inventi Journals (P) Ltd
Published on Web 23/03/2013, www.inventi.in
REVIEW ARTICLE
U.S. Food and Drug Administration on November 19,
2007 announced that it has approved Nexavar for use in
patients suffering from a type of liver cancer known as HCC,
when the cancer is inoperable. Initially Nexavar was
approved in 2005 for treating advanced renal cell
carcinoma patients. As per the data submitted to USFDA, in
randomized clinical trial, the group of patients with
inoperable HCC who received Nexavar survived 2.8 months
longer than their placebo counterparts. Nexavar interferes
with molecules that are thought to be involved in chemical
messages sent within cancer cells, in the formation of blood
vessels that supply tumors, and in cell death. [4] The
approval of Nexavar was granted on the basis of data from
the international, Phase III, placebo-controlled Sorafenib
HCC Assessment Randomized Protocol (SHARP) trial. [3]
Nexavar is available in 200 milligram tablets and the usual
dose is two tablets (400 milligrams) taken twice a day on
an empty stomach. [3]
INDIA’S FIRST EVER COMPULSORY LICENSE TO NATCO
AND AFTERMATH OF THIS HISTORICAL RULING
Onyx Pharmaceuticals Inc. (A biopharmaceutical industry
operating from South San Francisco, California) found a key
protein which was bought by Bayer and later developed it
into the liver cancer drug under the brand name Nexavar.
Nexavar became a blockbuster with $1 billion in sales in
2011 for Bayer. The revenue growth was seven percent
over the 2010 sales of $934 million. Bayer holds Indian
patent (215758) for this chemotherapeutic agent. But all
that changed on March 13, 2012, when India's patent office
accepted a request from Hyderabad-based Natco Pharma
and granted permission to compulsorily make Bayer's
patented drug and make it available to patients at 97
percent discounted price of 8,800 rupees for a month's
dose (while Bayer charges 284,428). Of course, Natco has
been ordered to pay 6 percent royalty on Nexavar’s sales to
Bayer. [4] This ruling has wider implications for global
pharma majors. India's patent law permits authorities to
order patentees to license their products for local
manufacturing if their prices deter patients from
purchasing them, because there is a need to balance
intellectual property rights with the rights of people to get
access to new and expensive medicines. Overseas pharma
players are frowning eyes at this ruling, arguing that India
is discouraging innovation by finding ways to launch
cheaper generic versions of branded molecules which were
possible by herculean efforts of innovator. Bayer said “it
strongly disagrees with the conclusions of the appellate
board and will pursue the case at the high court in Mumbai.
“The order weakens the international patent system and
endangers pharmaceutical research," the company said in a
statement. Natco welcomed the order saying "this is a
reasoned and detailed order that can be sustained in any
court of law". [5] India’s Nexavar licensing has triggered a
rippling debate on whether this ruling in favour of Natco
will cripple the Indian business of pharma giants.
The Nexavar fight may create difficult situation for other
multinational drugmakers for their business in India.
Various ongoing patents lawsuits in Indian courts plus
Nexavar ruling may quiver research based pharma giants’
confidence. [6] Are innovation safe and rewarding in India?
This is the question drug makers around the world, and
now U.S. officials are asking now. During a visit with Indian
commerce minister Anand Sharma, U.S. Commerce
Secretary John Bryson lodged his protest against
government's order. Bryson told Sharma that "any dilution
of the international patent regime was a cause for deep
concern for the U.S.". But while defending, Sharma said
WHO’s compulsory licensing provisions were established
for cases just like this life threatening illness treated by a
drug out of reach at brand-name prices. [7]
Generic version of Nexavar was permitted for a number
of reasons. When Natco’s approach for voluntary license
[{s. 84(6) (IV)}] was turned down by Bayer then state
intervention lead to historical verdict on March 12, 2012 in
favour of Natco. Bayer had appealed against this order. This
ruling was further upheld by Chennai-based Indian patent
appellate board (IPAB). The earlier order had relied on
Section 84 (1) (a, b and c) of the Patents Act, which states
that “after three years of grant of a patent, a compulsory
license can be granted to any applicant on any of the
following justifications: (a) the reasonable requirements of
the public with respect to the patented invention have not
been satisfied, or (b) that the patented invention is not
available to the public at a reasonably affordable price, or
(c) that the patented invention is not ‘worked’
(manufactured to some satisfactory extent) in the territory
of India. [8] Bayer has been granted patent for Nexavar in
India till 2020 and it will continue to defend its intellectual
property rights within the Indian legal system. The IPAB
also came to the conclusion that even though Bayer had
obtained a patent for Nexavar in India in 2008, it failed to
make available the kidney and liver cancer drug on a large
scale at an affordable price within the stipulated time.
Dismissing the IPAB ruling, Bayer said “it had produced
enough batches of Nexavar to meet domestic demands”.
Since 2008, the company has been conducting a special
program in cooperation with doctors in India to improve
cancer patients' access to treatments with Nexavar and
they received the drug for less than one-tenth of the market
price. More than 73 per cent of the patients using Nexavar
got benefit from this program last year. [9]
CONCLUSION
This type of cancer can be difficult to remove completely
using surgery. If all of the cancerous cells cannot be
removed, the disease is usually fatal within three to six
months. There are over 600,000 people with the advanced
condition of liver cancer who can be benefited from this
ruling. Compulsory licensing of Nexavar is not
condemnable on humanity grounds. After all, the Indian
government has only used an option available to it under
the global trade provisions. If governments such as India
cannot utilize these provisions to increase availability of a
key medical product for life threatening condition, what is
the use of such a facility But at the same time one has to
think about whopping money and years of research and
development efforts put by research team(s) of that
2

3. Inventi Rapid: Pharmacy Practice Vol. 2013, Issue 2
[ISSN 0976-3848]
2013 ppp 230, CCC: $10 © Inventi Journals (P) Ltd
Published on Web 23/03/2013, www.inventi.in
REVIEW ARTICLE
particular company, which introduces world with
particular new chemical entity called research molecule. As
this is the first case of compulsory license by the country
after adopting the new intellectual property regime, this
decision is bound to affect future planning of think tank of
global pharma behemoth. Such a historical decree of court
of law may affect ruling of several pending cases in Indian
courts. Herceptin® (in treatment of breast cancer from the
house of Roche), Sprycel® (Bristol Myers Squibb's for
leukemia), Lxempra® (Bristol Myers Squibb's for breast
cancer) etc may follow the suit. The government is mulling
to grant compulsory licenses to these anti cancer
medicaments. It would be the first round of new
compulsory licenses since Nexavar of Bayer. In present set
up, compulsory license is the only option available in India
to get life saving drugs to cancer victims in India at reduced
price. [10] There should be fail-safe model which permits
reward to innovator for discovering the molecule and at
the same time drug should be provided to most needy
person at affordable price without damaging the nation’s
rapport and reputation and without afflicting the
innovator. Because after all science is for mankind, it may
not be for select few. Most of the Indian pharmaceutical
companies are not recognized to invest heavily in research
as they usually prefer reverse engineering best selling
drugs. Several Indian companies have launched molecules
in the past, but analysts tagged them as amended copy of
research molecule.
REFERENCES AND NOTES
1. Available from: URL: http://www.wto.org
2. Available from: URL: http://www.nexavar-us.com
3. FDA Approves Nexavar for Patients with Inoperable Liver
Cancer [Online]. 2013 march; Available from: URL:
http://www.fda.gov
4. India's Nexavar licensing creates a global debate [Online].
2013 march; Available from: URL:
http://www.biospectrumindia.com
5. India Appeals Body Rejects Bayer's Plea on Nexavar [Online].
2013 march; Available from: URL: http://online.wsj.com
6. Indian board nixes Bayer's bid to stop generic Nexavar
[Online]. 2013 march; Available from: URL:
http://www.fiercepharma.com
7. U.S. questions India's IP regime after Nexavar move [Online].
2013 march; Available from: URL:
http://www.fiercepharma.com
8. Available from: URL: http://www.ipindia.nic.in
9. Bayer to appeal against Nexavar patent order [Online]. 2013
march; Available from: URL: http://businesstoday.intoday.in
10. India to hit Roche, BMS with compulsory licenses on [Online].
2013 march; Available from: URL:
http://www.fiercepharma.com.
Cite this article as: Amit Gangwal, Sanjay Jain. Will
Nexavar® (Sorafenib Tosylate) Become Unprecedented
Case Study?. Inventi Rapid: Pharmacy Practice, 2013(2):
1-3, 2013.
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