Natco Pharma has applied for compulsory licensing to sell its generic version of a drug used to treat liver and kidney cancer. Natco had earlier approached Bayer for grant of voluntary license and been refused. The price differential between the patented drug and the generic version is over Rs. 2.5 lakhs. Non-affordability by a majority of Indians is the ground cited for applying for compulsory licensing. The actual grant of patent may face tough legal battles and the move has huge implications for the pharma industry.
Under compulsory licensing provisions, government will allow a person or entity to produce a patented product without the consent of the patent owner. This flexibility in the Trade-related aspects of Intellectual Property Rights (TRIPS) agreement has already been used by countries like Thailand for cancer drugs. While Indian law provides for compulsory licensing, it has not been put to use so far.