Bayer will not accept a ruling by the Intellectual Property Appellate Board (IPAB) in Chennai on Monday, upholding the compulsory licence granted on March 9 last year and it will appeal against the patent office order at the high court in Mumbai, a spokesperson told PTI.
Bayer holds the patent right for Nexavar in India until 2020 and it will continue to defend its intellectual property rights within the Indian legal system, the spokesperson said.
The IPAB ruling was in response to a petition filed by the German drug maker on May 4 last year seeking to overturn the compulsory licence issued by the Controller General of Patents, Designs and Trademarks to the Hyderabad-based Natco Pharma.
In an initial judgement, the IPAB had in September last year dismissed a petition by Bayer to stay the compulsory licence.
In its final verdict on Monday, the board ruled that the government was using its rights under the rules of the World Trade Organisation (WTO) to issue compulsory licences to overcome barriers to access cheaper version of a patented drug without the consent of the company that invented it.
The IPAB also came to the conclusion that even though Bayer had obtained a patent for Nexavar in India in 2008, it could not make available the kidney and liver cancer drug on a large scale at an affordable price within the stipulated time.
Rejecting the IPAB ruling, the spokesperson said the drug-maker had produced sufficient quantities of Nexavar to meet the demands of Indian patients using the medicine.
Since 2008, the company has been operating a special programme 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 benefitted from this programme last year, the spokesperson said.
The patent office had asked Natco Pharma to make available Nexavar to cancer patients a monthly dose of 120 tablets for Rs 8,800 (USD 176) compared to Rs 280,000 (USD 5,500) charged by Bayer.
As part of the licence condition, Natco Pharma had to pay Bayer a six per cent royalty on the net sales of the cancer drug on a quarterly basis.
Medical relief agency Doctors Without Borders (MSF) welcomed the IPAB decision and said such steps are necessary to bring down the price of patented drugs to an affordable level.
"This decision once again affirms that governments can and should act in the interest of public health to bring the price of patented medicines down," the agency said in a statement.
MSF said the high price of patented medicines is a growing problem around the world and it must be tackled.
One year's treatment cost for one of the newer HIV medicines the agency uses in its project in Mumbai was over USD 1,700 and it will be needed across the developing world. The price needs to come down and we hope that the routine use of the compulsory licensing may be one way of making this happen, the statement said.
In a separate case, Bayer is embroiled in a legal dispute with Indian generic drug-maker Cipla over infringement of its patent rights for Nexavar.
The Delhi High Court is dealing with a patent infringement suit filed by Bayer against the Indian company on March 15, 2010 in connection with a marketing authorisation for a generic version of Nexavar granted by the Drug Controller General of India.
Bayer has accused Cipla of patent infringement by slashing the price of its generic Sorafenib, which was launched in India before Natco won the compulsory licence for the drug from the patent office.