'Compulsory licence' to Natco will bring down cost of cancer drug by 97%

The central government in a historic decision, allowed Indian company Natco Pharma to manufacture Sorafenib, a replicated version of pharma giant Bayer's patented anti-cancer drug Nexavar. This is the first time that the government has taken such a step. It'll bring down the price of the drug by 97%. Nexavar is used to treat renal and liver cancer. Normally the Bayer version costs Rs 2.8 lakh per month for 120 capsules but this decision could allow the drug to be sold for only Rs 8,880.

This is the first case of compulsory licensing, a provision under which the government can give a firm the green light to copy a patented drug without the owners' consent.This ruling could be a complete game changer as it would make expensive life-saving drugs for chronic ailments like cancer and HIV affordable to consumers.

Bayer have expressed their disappointment with the ruling and are mulling their legal options to defend intellectual property rights. Under Section 84, a compulsory licence to manufacture a drug can be issued after three years of the grant of patent on a product which is not available at an affordable price. Under the World Trade Organization TRIPS Agreement, compulsory licences are legally recognized means to overcome barriers in accessing affordable medicines. The patent office felt that Bayer had put a price on the drug that made it inaccessible and unaffordable.