Delhi HC rules in favour of Indian pharma manufacturers Natco and Alembic

Allows companies to export cancer and blood thinning drugs for experimental purposes

The Delhi High Court on Wednesday allowed Indian drug manufacturers Natco Pharma and Alembic Pharmaceuticals to export Sorafinat and Rivaroxiban, generics of German pharma major Bayer's own cancer and blood thinning medicines.

Bayer had initiated proceedings against the two Indian pharma companies to stop them from exporting the drug, which the defendants had claimed were being exported for purposes of experimentation and generation of valuable clinical trial data. Bayer had opposed this stance and argued that such exports did not meet the exceptions to patent infringement provided under Section 107A of the Indian Patents Act, 1970, as they violated conditions of compulsory licenses (Natco) and exceeded reasonable quantities (Alembic).

Bayer had claimed that under the compulsory license provided to Natco, the company could only sell Sorafinat within India and that Alembic could not take benefit of the exception as they had exported over 90 kilograms of Rivaroxiban, worth around Rs 3 crore. As such, the German drug maker had also sought for directions to be issued to customs authorities to seize and confiscate the consignments from being exported outside the country.

Justice Rajiv Sahai Endlaw's judgment on Wednesday however, did not accept Bayer's contentions and instead held that the Indian companies were allowed to export the medicines under the exception provided through Section 107A even during the subsistence of the German drug maker's patent. The court also held that the export of the pharmaceuticals were for informational and data gathering purposes and in line with the global Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) and covered under the constitutional right enshrined under Article 19(1)(g) of the Constitution.

Endlaw negated Bayer's contentions regarding quantity by holding that different drugs required different quantities for the purpose of experimentation. The bench went further to conclude that the sale of these medicines, if for the purposes mentioned under Section 107A could not be prevented, even if it resulted in a profit and neither could such exports be controlled after they left India. The Indian companies are required to file affidavits of understanding saying that they will not export the pharmaceuticals for any other purposes.

"The court has reiterated that the growth of the pharma industry in India cannot be stunted in such a manner by stopping exploratory purposes, which is a well recognised exception under TRIPS," said senior advocate Pratibha Singh, appearing for Alembic.

Sorafinat is a drug used for the treatment of liver and kidney cancer and Rivaroxiban is a medicine that prevents non-hemorrhagic strokes and embolic events in patients.