Delhi High Court has stayed its previous order allowing Natco Pharma to export Bayer’s patented drug sorafenib tosylate (marketed under the name Nexavar) for experimental purposes.

The Court directed that till next hearing slated for September 21, 2017, Natco shall stand prohibited from exporting the patented invention which is a subject matter of compulsory licence of 2011.

The High Court also issued notices to Natco, the Union government and the Drug Controller General of India (DCGI), asking them to reply to Bayer’s plea against the court's order on March 8, 2017. On March 8, the court held that as per Section 107A of the Patents Act, Natco had a right to export Bayer's kidney and liver cancer drug sorafenib tosylate to other countries. for conducting clinical studies for developing the product for sale after expiry of patented product for which Natco had received a compulsory licence in 2012. It also observed that Alembic Pharmaceuticals' manufacture and export of another Bayer’s patented drug Rivoroxaban to the European Union was covered under Section 107A of the Act. Thus the court rejected the case filed by Bayer against Natco and Alembic.

On May 12 the division bench of the High Court comprising acting Chief Justice Gita Mittal and Justice Anu Malhotra stayed Justice Rajiv Sahai Endlaw's March 8 order.

The division bench gave verdict on a petition filed by Bayer challenging Justice Endlaw's March 8 order saying that Natco was exporting the finished product and not the active pharmaceutical ingredient. It is in violation of compulsory licence granted to it.

Natco however rejected the allegation, saying that it was marketing the drug only in India, and exporting the API and the finished product for experimental purpose to countries such as China. Natco further stated that licence approval is given in these countries after 2 to 5 years, subsequent to an application for such approval. The drug maker clarified that it would export the drug for commercial purpose after the expiry of Bayer’s patent in 2020.

Considering Bayer's petition, the division bench held that there is a significant difference between exporting a drug for seeking licence approval (as claimed by Natco) and that for commercial purpose. Natco cannot export drug for commercial purpose as per conditions of compulsory licence granted to it.

The division bench asked Natco to file a separate application seeking permission to export the drug for licence approval/ experimental purpose. The company would be granted permission to export a small quantity of the drug. It further asked Natco not to export sorafenib tosylate till September 21, 2017.

The court order has hampered Natco's prospect of entering negotiations with third parties to sell the drug abroad.

Noted patent expert Dr Gopakumar Nair said “Section 107 A exempts Indian pharmaceutical companies from making, importing and exporting API or medicine patented in India for R&D related to regulatory submission of dossier. This has been confirmed by the order of justice of Endlaw of Delhi High Court. On appeal by Bayer, the division bench headed by acting chief justice Geeta Mittal, appeared to have stayed this order, which is not true. The gazette of 107 A (a) continues to operate. The stay has been granted only against Natco Pharma which has been prohibited for exporting patented invention, Nexavar, which was the subject matter of a compulsory licence granted to Natco Pharma in 2011. Natco had given an undertaking not to export the product as per norms of compulsory licence.”