The Intellectual Property Appellate Board (IPAB), constituted by the union commerce ministry in the year 2003 to hear appeals against the decisions of the Registrar under the Trade Marks Act, will start hearing the German drug major Bayer's appeal against the grant of compulsory license on its anti-cancer drug Nexavar on August 21.

After the Indian Patent Controller issued the first-ever compulsory licence (CL) in March this year to an Indian generic drug manufacturer to manufacture the Bayer's patented anti-cancer drug sorafenib tosylate (Nexavar), the German drug major had filed an appeal against the compulsory license order before the IPAB in Chennai and has in particular sought to have the operation of the CL order stayed till the appeal hearings are completed and IPAB passes its decision.

The hearing on this high voltage case is crucial as it will test Section 84 of the Indian Patent Act, under which the compulsory licence mechanism kicks in when generic competitors request for a compulsory licence to make the generic version of a patented drug to make them available to the people of the country at affordable prices.

Earlier, on March 9 this year, Indian Patent Controller P H Kurian had issued the first-ever CL to Hyderabad-based Natco Pharma to manufacture an affordable generic version of sorafenib tosylate, the anti-cancer drug for which Bayer had obtained a patent IN215758 in India in 2008.

Kurian, in his landmark decision, stated that the decision was given against Bayer as it was found during the investigation that the patented invention Nexavar by Bayer was not available to the public at a reasonably affordable price which was against the provision of Section 84 (1) (b) of the Patents Act. In his 62-page decision, Kurien stated that the price of the drug covered by the patents sold by the company shall not exceed Rs.8,880 for a pack of 120 tablets which is the requirement for one months treatment. It also demanded the company, Natco Pharma, to pay royalty of six per cent of the net sales of the drug on a quarterly basis to the patented holder Bayer.

In July 2011, NATCO had filed a CL application, proposing to market generic version of sorafenib tosylate at Rs.8,800 per patient per month if the patent office grants it a compulsory license. The granting of CL has brought down the price of the medicine by 97 per cent lower than what Bayer is charging. Bayer currently markets the drug at an exorbitant price of approximately Rs.2,80,000 per patient per month.