In what is being seen as a first by the Indian Patent Office,
Hyderabad-based Natco Pharma has been granted a compulsory licence to sell a generic version of Bayer AG's kidney and liver cancer drug Nexavar.
This is the first time an Indian company has been granted a compulsory licence, which means the patent holders grant licences to generic drug makers.
The move is an attempt by the government to ensure life-saving drugs are available to the poor by making them more affordable.
"We will be out in the market with our product (called Sorefinat) by the end of this month (March 31)," said Natco Chief Financial Officer Bhaskar Narayana.
What is significant is the pricing.
"We will be selling it at Rs 8,880 for a bottle of 120 tablets (one month dose), against around Rs 2,80,000 that Bayer charges for Nexavar," he said.
According to Narayana, the drug has a market of around Rs 30 crore in India.
Natco can now legally manufacture and sell the drug but will need to pay a royalty of about 6 per cent of net sales of the drug to the German major. Narayana said it is too early to say in terms of the contribution to the revenues from this, but it will be important.
The move has apparently not gone down well with the MNC pharma.
Ranjit Shahani, President OPPI (Organisation of Pharmaceutical Producers of India) said: "OPPI is disappointed with the decision to issue a compulsory licence. We believe compulsory licences should be used only in exceptional circumstances, such as in times of a national health crisis. If used arbitrarily, compulsory licences will serve to undermine the innovative pharmaceutical industry and will be to the long term detriment of the patient."
He further said: "The research-based pharmaceutical industry fully supports provisions of the law when used judiciously. The poor in developing countries like India will suffer needlessly until a wide variety of issues such as lack of diagnosis, healthcare infrastructure and distribution are solved. Existence of trained healthcare staff and infrastructure, cultural acceptability of treatment, accessibility of healthcare facilities and quality of care all play a role in making medicines available."
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