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Compulsory license bandwagon gains momentum

India's decision in March to grant its first-ever compulsory license, which allows a company to make and market a drug that the patent holder has not been able to make sufficiently affordable and accessible, has drawn cheers from healthcare activists and opprobrium from the pharma sector. The licensee, Hyderabad-based Natco Pharma, will sell its generic version of Bayer's liver and kidney cancer drug Nexavar (sorafenib) for 3% of the patented drug's price in return for paying 6% royalty on sales to Leverkusen-based Bayer. Nata Menabde, India's representative to the World Health Organization, told CNBC-TV18, “India has taken a good political stand on compulsory licenses and we respect that move. [A compulsory license is] an important tool that governments have in their arsenal and they should be using it as appropriate, as per national legislation, and keep public health interests above any other interests.” Pharma companies and Western patent offices such as the US Patent and Trademark office have registered their opposition, and Bayer appealed the Indian government's decision. Court arguments were heard in August. However, until the decision is reversed, the precedent means that other Indian companies may seek similar arrangements with the government. Compulsory licenses have previously been used in Brazil, Thailand and South Africa, and just last month China amended its intellectual property laws to allow for compulsory licenses.


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Francisco, M. Compulsory license bandwagon gains momentum. Nat Biotechnol 30, 814 (2012).

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