India’s ‘Controller of patents’ has granted Natco a ‘compulsory license’ (‘CL’) for Bayer’s Sorafenib Tosylate (marketed as Nexavar). The drug extends the lives of terminal liver and kidney cancer patients. Put differently: the controller has forced Bayer to grant a license to Natco, to produce the drug, specifying inter alia a (low) sales price and royalties to be paid to Bayer. Natco is an Indian pharmaceutical company (no surprise there), with an increasing portfolio in pharmaceutical R&D. In other words reportedly not a typical ‘generics’ company.
The ruling is of course subject to appeal. It is also the subject of intense debate under the WTO, in particular the TRIPS Agreement. TRIPS (Articles 30-31) leaves room for a CL system and prima facie leaves a lot of room for manoeuvre to WTO Members to grants such licenses. However underneath Article 30-31’s surface lies quite a bit more than might be assumed. Moreover, even if one takes Members’ discretion in applying these Articles at face value, the articles must not be applied stand-alone. In other words they do not give carte blanche for introducing requirements leading to CL which might otherwise be WTO inconsistent.