Compulsory Licensing or Theft? The Bayer-India Controversy

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In summary, the conversation discusses a recent court case in India where the government allowed other companies to produce a drug similar to Bayer's cancer treatment drug at a lower cost due to the high initial price set by Bayer. Bayer contests this decision in court, but ultimately loses and is now filing appeals. The Doha declaration outlines the procedure for compulsory licensing and there is an FAQ available for more information. It is also important to note that the original company still receives a percentage of profits, but the liability for the drug's side effects may be affected by the compulsory licensing.
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fras
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I'll preface this post by saying I have always had an interest in companies like Bayer and their R&D departments, so I found this story relevant as it touches upon R&D and patent rights. However, I know very little when it comes to legal procedures, and especially patents (intellectual property?).

What I am able to sum up is just my understanding of what is going on currently. Bayer develops a drug that doesn't necessarily cure, but treats certain symptoms of cancer, however, because of development costs, etc..., they initially charge $69k/year for the drug.

Certain segments of India's population afflicted with cancer cannot afford the drug for treatment. Being that $69k/year is not reasonable for India's government India offers other companies/agencies a compulsory license to Bayer's patent. This allows the allowed agency to create the drug and produce one similar to Bayer's product, but with a lower price tag than the $69k.

Bayer doesn't like this as it undercuts their initial price tag and possibly their profit motives, so the company contests this in court, and says, "if this continues, it is tantamount to theft! (I am paraphrasing here)." To Bayer's dismay, they lose in court and are pretty angry at the decision and are now filing appeals in the Indian court to get the court to reverse the decision.

Article: (The Economist article is more broad in discussion than Businessweek's. Businessweek's article is the main one.

http://www.businessweek.com/news/2014-01-21/merck-to-bristol-myers-face-more-threats-on-india-drug-patents

http://www.economist.com/news/inter...nd-patients-are-desperate-them-arguments-over

I would like some help in understanding what is going on, specifically, the law.
 
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Does anyone know how this interacts with product liability? If Company A makes a drug, and it is compulsorily licensed to Company B, and it is later determined that it has a terrible side effect, is Company A still liable?
 

1. What is compulsory licensing?

Compulsory licensing is a mechanism that allows a government to grant a third party the right to produce or sell a patented product without the consent of the patent owner. It is typically used in cases where the patented product is deemed to be of national or public interest, such as in the case of essential medicines.

2. Was the Bayer-India controversy a case of compulsory licensing or theft?

The Bayer-India controversy involved a compulsory license being granted to a generic drug manufacturer, Natco Pharma, to produce a generic version of Bayer's patented cancer drug, Nexavar. Therefore, it was a case of compulsory licensing, not theft.

3. What was the reason for the compulsory license being granted in the Bayer-India controversy?

The Indian government granted the compulsory license to Natco Pharma because they deemed the cost of Nexavar to be too high for the majority of the population to afford, making it inaccessible to those who needed it most. This decision was made in the interest of public health.

4. Did Bayer lose their patent rights for Nexavar in India due to the compulsory license?

No, Bayer still held the patent rights for Nexavar in India. The compulsory license only allowed Natco Pharma to produce and sell a generic version of the drug at a lower price for a specific time period.

5. What are the implications of the Bayer-India controversy on the pharmaceutical industry?

The Bayer-India controversy sparked a global debate on the balance between patent rights and access to essential medicines. It also highlighted the potential impact of compulsory licensing on the profits of pharmaceutical companies and their ability to recoup their research and development costs. As a result, it has led to changes in patent laws and discussions on ways to make medicines more affordable and accessible to all.

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