In another case pertaining to the patent of a global pharma company, Indian regulators have upheld generic drugs against patented drugs. We believe that this decision will benefit the Natco Pharma which has already been selling this drug.
In another case pertaining to the patent of a global pharma company, Indian regulators have upheld generic drugs against patented drugs. AstraZeneca's appeal, which challenged the earlier decision of a court of refusing a patent protection to its cancer drug, Gefitinib, has been dismissed by the Intellectual Property Appellate Board (IPAB). This is second such case this year and another historic win for domestic pharma company Natco Pharma, which is already selling this drug. AstraZeneca has an option to go to the Delhi High Court to ask for patent cover.
AstraZeneca had originally applied for the patent cover in 1996, which was challenged by Natco Pharma in 2006. In 2007, the Controller General of Patents refused protection to the patent. The company then moved the court, but this plea was also rejected in May 2011. The British drug giant then approached the IPAB. The IPAB rejected its petition on the grounds that its product lacks invention.
As per a report in Daily News and Analysis (DNA), AstraZeneca sells Gefitinib at a price of Rs 1 lakh for a 30-capsule bottle. Natco Pharma, on the other hand, has priced its drug at Rs 10,000 which is at a 90% discount to the innovator's drug. Natco has been selling the generic version of the drug in the Indian market since 2004, and IPAB's dismissal of the AstraZeneca's plea should be very positive for the company. It has received a breather now, as the uncertainty on the legal front has vanished.
Natco Pharma has used a similar tactic to challenge Bayer's patent on Nexavar (molecule Sorafenib Tosylate), which is also an anticancer drug (used to treat cancer of the kidney and liver). The company won a compulsory license to manufacture and sell a copy of Nexavar. Bayer's petition was dismissed by the court on the grounds that the drug was not manufactured in the country and that it was sold to a total patient population less than 2%. Buyer's drug is priced at Rs 2,80,428 for a dose of a month, whereas Natco is selling the drug at a price of Rs 8880 for a month's dose, a whopping 97% discount to the innovator's price. Natco will pay royalty to Bayer at 6% of the net sales on a quarterly basis.
After the patent law was changed in 2005, there have been a few cases of Indian companies challenging patents. In one such high profile case, pharma giant Novartis had approached the Supreme Court to protect the patent cover for its drug Glivec. The case is still pending with the court, but we expect the court’s ruling to go against Novartis. Pharma firm Cipla is also involved in challenging patented HIV and cancer drugs.
Going ahead, these cases of patent dismissals would encourage many domestic players to challenge more patents of MNCs. In fact, some MNCs have already sensed the same and have started reducing the prices of their patented drugs.AstraZeneca has already seen a decline in its sales and net profit, while Natco has marked a strong jump in its revenues and net profit. We have already recommended Natco Pharma to our readers, and further reiterate that investors should 'buy' the stock with a long-term horizon.