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IPAB, however, made changes in the licence order by increasing the royalty payment to Bayer Corp for Nexavar, used to treat liver and kidney cancer, from six per cent to seven per cent. The board has also imposed a penalty on Natco for filing a false statement.
In March last year, Natco got the first-ever compulsory licence to make the generic version of Nexavar. Under Indian patent law, companies can seek a compulsory licence if a patented drug is not available to the public at a reasonable price.
Bayer Corp, the US arm of German drug manufacturer Bayer AG, moved IPAB challenging the patent authority's decision. On September 17, the board had dismissed a stay petition filed by Bayer.
A coram comprising IPAB chairman justice Prabha Sridevan and technical member (patents) D P S Parmar has taken the latest decision.
The coram observed the patentee, Bayer Corp, could not sell the drug at a reasonably affordabile price.
The Controller of Patents was right in holding that the sale by the appellant at a price of Rs 2.8 lakh was not reasonably affordable, it said.
However, the board felt the royalty fixed for the compulsory licence, that is six per cent of the total sales, was not sufficient and has to be revised. "We are of the opinion of an increase of one per cent in the royalty fixed by the controller to the appellant," said Sridevan.
The coram dismissed Bayer's arguments that the presence of Cipla Ltd, which has launched a generic version of Nexavar and has begun a legal battle in the Delhi High Court, has to be taken into consideration when it comes to the supply of the drug.
IPAB also rejected Bayer's contention that Natco did not extend proper negotiation with the patent holder before filing for the compulsory licensing.
Meanwhile, Bayer has approached the Indian Patent Office, alleging non-compliance of the patent controller's compulsory licensing conditions by Natco.
