ANALYSIS-Big Pharma down, not out, after Indian patent blow

* Glivec patent decision may deter new drug launches

* Western firms seen striking deals with local companies

* India forecast to be No.8 drug market worldwide by 2016

LONDON/MUMBAI, April 2 (Reuters) - Stung by a landmark patent defeat, Western drugmakers will be wary about launching new products in India, but they cannot afford to quit a country tipped to be the world's eighth largest market for medicines by 2016.

Makers of patented drugs will in future have to get more creative about doing business in India, including striking deals with local firms to sell cheaper versions of their drugs, industry experts believe.

The decision by India's Supreme Court on Monday not to allow a patent on Novartis AG's cancer drug Glivec angered but did not surprise U.S. and European drug companies, given past intellectual property (IP) setbacks.

And it is unlikely to send them rushing for the exit.

"India is too big to ignore," said Amit Backliwal, who heads South Asian operations for leading healthcare information provider IMS Health.

"Companies will definitely get cautious, and it definitely means a change in their business model, but I don't think they will pull out."

On paper, there is huge potential in India's rapidly growing $13 billion-a-year drugs market, which is driven these days by chronic diseases such as diabetes as well as infections.

So far, though, it has failed to become a money-spinner for the world's top pharmaceutical companies, despite a new law in 2005 allowing drug patents for the first time.

Innovative patented drugs make up no more than 5 percent of sales, according to IMS, and they have been under siege after a series of rulings allowing generics firms to over-ride patents for cancer drugs like Bayer AG's Nexavar.

New Delhi has pulled no punches in its fight with Big Pharma, both by raising the bar for patents and being ready to issue so-called compulsory licences that open the door for cheap generics when patented drugs are deemed unaffordable.

In the face of such hurdles, some companies are already building new business models.

Roche Holding, for example, plans to offer cut-price versions of two blockbuster cancer drugs Herceptin and MabThera under an alliance with Indian generics firm Emcure Pharmaceuticals.

It is a scheme that Ajay Kumar Sharma, associate director of the pharmaceutical and biotech practice at business consultancy Frost & Sullivan, believes other drugmakers could now emulate.

CALCULATED RISK

India's stance on IP has long been a thorn in the side of Western business, prompting calls by Pfizer Inc and other U.S. firms last month for more pressure on the country to reform policies that can block U.S. exports.

The argument cuts little ice in India, where officials see differential pricing - steep discounts for less well-off markets - as an obvious option for Western companies.

"It is up to them to decide on India. Don't forget, India is a large market, a country of 1.2 billion," said Raghunath Mashelkar, former director general of the Council for Scientific and Industrial Research and an architect of India's IP policies.

With differential pricing common in industries from autos to mobile phones, he argues pharmaceutical firms must find new ways to make products affordable for lower-income groups.

"Drugmakers will have to work out strategies for the lower sections, to give affordable access to medicines and make money by large volumes and smaller margins," he told Reuters. "And then they will look at the middle and the upper sections and make money through smaller volumes but higher margins."

It is a calculated risk, yet a number of drugmakers are already coming around to the view that trading volume for price is the way forward.

One of those is GlaxoSmithKline Plc, which has a large footprint in India and has just invested $900 million to raise its stake in its consumer healthcare subsidiary.

GSK's diversified approach to healthcare is shared by a number of rivals, including Novartis, that also have big interests in over-the-counter (OTC) remedies and branded generics, in addition to innovative medicines.

It is this non-prescription sector that is set to dominate in India, driving double-digit percentage growth in a market that IMS has forecast will reach $24-34 billion by 2016, vaulting the country to eighth from 14th in the global league table.

PricewaterhouseCoopers puts sales by 2020 at $49 billion.

Much of the new business will still come from cheap generics made by local companies, but Western firms are also seeking to put their brands on unpatented medicines, prompting the likes of Abbott Laboratories and Daiichi Sankyo Co Ltd to buy up Indian companies.

BETTER BETS ELSEWHERE

With sales of patented drugs in Western countries slowing, emerging markets are a vital growth driver for drugmakers. India cannot be ignored, but there are clearly better bets elsewhere.

"Emerging markets are growing at two to three times the rate of Western markets, but you've got to be in the right markets - you want to be in China and in Brazil," said Tim Race at Deutsche Bank.

"India could be a really exciting market, given its increasing middle class, but the home-grown generics industry is extremely strong, and the patent situation is very difficult."

India's patent stance also reverberates beyond its shores, since the country's generics firms export their cheap medicines across the developing world.

So far, no other country has followed India with similar laws preventing the kind of secondary patent that stymied Glivec, though Michelle Childs, head of drug access policy at Medecins Sans Frontieres, said others were raising the patent bar in more subtle ways.

Argentina, for example, recently issued guidelines to patent examiners urging stricter rules for granting new patents, and other countries have used compulsory licences, she noted.

"It's putting pressure on pharmaceutical companies to realise they can't continue to charge prices which are unaffordable to the majority of people," Childs said.

(Additional reporting by Caroline Copley in Zurich; Editing by Will Waterman)

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UPDATE 4-Novartis loses landmark India cancer drug patent case

* Court verdict seen setting precedent in drug patent cases

* Novartis India shares fall before recovering; Natco, Cipla gain

* India intellectual property system "not very encouraging"- exec

* Activists see verdict as win for patients in poor countries

MUMBAI/NEW DELHI, April 1 (Reuters) - India's top court dismissed Swiss drugmaker Novartis AG's attempt to win patent protection for its cancer drug Glivec, a blow to Western pharmaceutical firms targeting India to drive sales and a victory for local makers of cheap generics.

The decision sets a benchmark for intellectual property cases in India, where many patented drugs are unaffordable for most of its 1.2 billion people, and does not bode well for foreign firms engaged in ongoing disputes in India, including Pfizer Inc and Roche Holding AG, analysts said.

It cements the role of local companies as big suppliers of inexpensive generics to India's rapidly growing $13 billion-a-year drugs market and also across the developing world.

Among the chief beneficiaries of Monday's Supreme Court ruling will be India's Cipla Ltd and Natco Pharma Ltd , which already sell generic Glivec in India at around one-tenth of the price of the branded drug.

"The multinational companies will have to find new ways of doing business in India," said Deepak Malik, healthcare analyst at brokerage Emkay Global, suggesting they may consider licensing agreements with local firms to offer cheap versions of branded drugs like Glivec.

Ranjit Shahani, managing director of Novartis India Ltd , the firm's locally listed unit, said it will be cautious about investing in India, especially over introducing new drugs, and seek patent protection before launching any new products. It will continue to refrain from research and development activities there.

"The intellectual property ecosystem in India is not very encouraging," Shahani told reporters in Mumbai after the ruling.

Healthcare activists have called on the government to make medicines cheaper in a country where many patented drugs are too costly for most people, 40 percent of whom earn less than $1.25 a day, and where patented drugs account for under 10 percent of total drug sales.

"This appears to be the best outcome for patients in developing countries as fewer patents will be granted on existing medicines," said Leena Menghaney, Medecins Sans Frontieres' Access Campaign manager for India.

Over 16,000 patients in India use Glivec and the vast majority of those get it free of charge, Novartis says. By contrast, generic Glivec is used by more than 300,000 patients, according to industry reports.

The Supreme Court's decision comes after a legal battle that began when Novartis was denied a patent for Glivec in 2006.

EXTRA WORK

Novartis had argued it was entitled to a patent for the amended version of Glivec because the original patented compound was never suitable for making into a pill. Developing the final chemically stable form took years of extra work and it was this effort that marked the real breakthrough in developing Glivec as a life-saving cancer medicine, the Swiss company said.

Glivec is used to treat certain forms of leukaemia and gastrointestinal cancer, as well as some other rare tumours.

Shares in Novartis' Indian unit ended 1.8 percent lower after falling as much as 6.8 percent after the verdict. Natco Pharma stock ended 5.4 percent higher after earlier gaining nearly 11 percent and Cipla gained 1.3 percent, beating the benchmark index which ticked up 0.15 percent.

India's domestic drugs market is the 14th-largest globally, but with annual growth of 13-14 percent and the world's second-biggest population, international pharmaceutical firms say India has massive potential at a time when traditional developed markets have slowed down.

The ruling may dampen enthusiasm from foreign pharmaceutical firms in the short term, said S. Majumdar, head of law firm S. Majumdar & Co based in the eastern city of Kolkata.

"They will have to get used to it and learn to live with the law," he said.

NOT SO EVERGREEN

Pfizer's cancer drug Sutent and Roche's hepatitis C treatment Pegasys lost their patented status in India last year, decisions the companies are fighting to have reversed. The Supreme Court's latest ruling will make it tougher for them to win back patent protection.

"Henceforth, multinational pharma companies are likely to want that their patents are first recognised in India before launch of a patented product," said Ameet Hariani, managing partner at Mumbai-based law firm Hariani & Co.

India has refused protection for Glivec on the grounds that it is not a new medicine, but an amended version of a known compound. By contrast, the newer form of Glivec has been patented in nearly 40 countries including the United States, Russia and China.

Indian law bans firms from extending patents on their products by making slight changes to a compound, a practice known as "evergreening". The Supreme Court said Glivec does not satisfy a patent's "novelty" requirement, Pravin Anand, lawyer for Novartis, told reporters.

Novartis can file a review petition within 90 days.

Indian Trade Minister Anand Sharma called the ruling "a historic judgment" that reaffirmed legal provisions mandating the need for substantial innovation before new patents are issued on medicines.

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India's top court dismisses Novartis petition for Glivec patent

NEW DELHI, April 1 (Reuters) - India's highest court has dismissed Swiss drugmaker Novartis AG's petition seeking patent protection for its cancer drug Glivec, a serious blow to Western pharmaceutical firms which are increasingly focusing on India to drive sales.

In a landmark judgment that has the potential to change the direction of India's pharmaceutical business, the Supreme Court said on Monday that the drug failed to qualify for a patent according to Indian law.

Novartis has been fighting since 2006 to win an Indian patent for an amended form of Glivec. In 2009 it took its challenge against a law that bans patents on newer but not radically different forms of known drugs to the Supreme Court.

(Reporting by Suchitra Mohanty; Editing by Daniel Magnowski)

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India's Top Court Rejects Novartis Patent Protection

India's top court has dismissed Swiss drugmaker Novartis's attempt to win patent protection for its cancer drug Glivec, a serious blow to Western pharmaceutical firms who are increasingly focusing on India to drive sales.

The decision also sets a benchmark for several intellectual property disputes in India, where many patented drugs are unaffordable for most of its 1.2 billion people, 40 percent of whom earn less than $1.25 a day.

India's domestic drugs market is the 14th largest globally, but with annual growth of 13-14 percent and the world's second biggest population, it has massive potential at a time when traditional developed markets have slowed down.

The Supreme Court's landmark ruling is likely to affect several other companies and their branded medicines.

Pfizer's cancer drug Sutent and Roche Holdings hepatitis C treatment Pegasys lost their patented status in India last year, and Monday's ruling will make it tougher for them to win back patent protection.

"Henceforth, multinational pharma companies are likely to want that their patents are first recognized in India before launch of a patented product," said Ameet Hariani, managing partner at Mumbai-based law firm Hariani & Co.

Novartis has previously that said it needs legal certainty if it is to plan further investment in drug research in India.

The ruling is a boost for healthcare activists who want the government to make medicines cheaper in a country where patented drugs constitute under 10 percent of total drug sales.

Novartis has been fighting since 2006 to win a patent for an amended form of Glivec. In 2009 it took its challenge against a law that bans patents on newer but not radically different forms of known drugs to the Supreme Court.

India has refused protection for Glivec on the grounds that it is not a new medicine but an amended version of a known compound. By contrast, the newer form of Glivec has been patented in nearly 40 countries including the United States, Russia and China.

The Supreme Court decided that Glivec does not satisfy the "novelty" aspect, Pravin Anand, lawyer for Novartis, told reporters.

Shares in Novartis India Ltd, the Indian unit of the drugmaker, fell over 5 percent after the verdict. They were down 4.63 percent at 571.10 rupees by 0528 GMT.

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India hails "historic" Supreme Court drug patent ruling against Novartis

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Big Pharma in nervous wait for India verdict on Glivec patent

MUMBAI, March 27 (Reuters) - Global drugmakers, battered by recent intellectual property decisions in India, are girding for a landmark court ruling next week that could have broad consequences for their ability to sell lucrative patented medicines in the country.

India's Supreme Court is due to decide on April 1 whether or not an amended form of Swiss giant Novartis AG's cancer treatment Glivec deserves a patent in the country.

"Big Pharma is nervous because nothing has gone in their favour in the recent past," said Ajay Kumar Sharma, associate director of the pharmaceutical and biotech practice at business consultancy Frost & Sullivan.

"With this verdict, at least, things will get clearer about what is the definition of patented medicines."

Novartis has been fighting since 2006 to win a patent for an amended form of Glivec, which many oncologists view as a major advance in treating chronic myeloid leukaemia, which kills 80-90 percent of sufferers, and some gastrointestinal cancers.

India has refused protection for Glivec on the grounds that it is not a new medicine but an amended version of a known compound - a decision consistent with domestic patent law which sets tight restrictions on multiple patents for a drug.

By contrast, in the United States, amended versions can be patented.

Novartis is seeking to overturn a clause in Indian Patents Law that restricts patent protection for newer forms of existing molecules, and next week's ruling could set a precedent for how other similar patent claims are treated.

"India is a formidable world power with international rights and obligations," Ranjit Shahani, vice chairman and managing director of Novartis India Ltd, the firm's India unit, said in an email to Reuters.

"Novartis understands and recognizes the contribution of generics once drug patents expire; our concern is with the non-recognition of intellectual property rights that ultimately help sustain and advance pharmaceutical research and development."

PROMISE AND PERIL

While Western firms see huge potential in India's rapidly growing $13 billion drugs market, 90 percent of which is made up of generics, they worry that India is failing to recognise valuable medical innovation.

Among Big Pharma's setbacks in the country, India last year allowed local drugmaker Natco Pharma to sell cheaper copies of Bayer AG's cancer drug Nexavar through the controversial mechanism of "compulsory licensing".

A global agreement, known as Trade-Related Aspects of Intellectual Property Rights or TRIPS, allows countries to issue compulsory licences for certain drugs that are deemed unaffordable to large sections of their populations.

Also last year, India revoked patents granted to Pfizer Inc's cancer drug Sutent, Roche Holding AG's hepatitis C drug Pegasys, and Merck & Co's asthma treatment aerosol suspension formulation. They were all revoked on grounds that included lack of innovation.

In another potential hit, Mumbai-based BDR Pharmaceutical International this month applied for a compulsory licence on a blood cancer drug, dasatinib, sold as Sprycel by U.S.-based Bristol-Myers Squibb Co.

Last month, an Indian government panel proposed that prices of patented medicines be based on the country's per capita income, a move that would substantially reduce prices of costly drugs made by global pharmaceutical firms.

"In the minds of global drugmakers, the recent developments will definitely hamper India's image," said lawyer Dominic Alvares, of S. Majumdar & Co which represents Indian drugmakers.

But he said social justice and the public interest should come ahead of India's reputation as a future drugs market. "The developments would impact reputation but for the sake of reputation, do you sacrifice on public interest?"

PATENTS VS AFFORDABILITY

In almost every patent dispute, India has held affordability as a key reason to allow generic drugmakers to launch copycat versions of patented medicines in a country where nearly 40 percent of the population lives on less than $1.25 a day.

For example, Natco Pharma was told by the patents office in its compulsory licence ruling to offer generic Nexavar at 8,800 rupees ($162) for a month's dose - a fraction of Bayer's price of 280,000 rupees. Natco must pay a 7 percent royalty to Bayer.

BDR Pharma, in its application, has offered generic Sprycel at 8,100 rupees for a month's dose compared with Bristol-Myers' price of 165,000 rupees.

Generic versions of Glivec, which won its first patent in 1993, cost about $2,500 for a year's dosage in India, compared with nearly $70,000 in the United States where only the branded version is sold.

Discount programmes mean the branded version is available for much less in poor countries. In India, more than 95 percent of patients using branded Glivec receive it free under a company donation scheme, Novartis has said.

U.S. industry groups this month demanded that the United States increase pressure on India to reform high-tech, agricultural and pharmaceutical policies they said blocked export access and damaged patent rights.

"India has essentially created a protectionist regime that harms U.S. job creators" in favour of India's generic drug manufacturers, Roy Waldron, chief intellectual property counsel for Pfizer, said in testimony to a U.S. House panel.

India's $25 billion drugs industry, a major exporter of generics, is growing at 16 to 17 percent a year.

"You can expect more muscle-flexing from the respective countries of the big pharmaceutical companies in the future," Frost & Sullivan's Sharma said.

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Big Pharma in nervous wait for India verdict on Glivec patent

MUMBAI, March 27 (Reuters) - Global drugmakers, battered by recent intellectual property decisions in India, are girding for a landmark court ruling next week that could have broad consequences for their ability to sell lucrative patented medicines in the country.

India's Supreme Court is due to decide on April 1 whether or not an amended form of Swiss giant Novartis AG's cancer treatment Glivec deserves a patent in the country.

"Big Pharma is nervous because nothing has gone in their favour in the recent past," said Ajay Kumar Sharma, associate director of the pharmaceutical and biotech practice at business consultancy Frost & Sullivan.

"With this verdict, at least, things will get clearer about what is the definition of patented medicines."

Novartis has been fighting since 2006 to win a patent for an amended form of Glivec, which many oncologists view as a major advance in treating chronic myeloid leukaemia, which kills 80-90 percent of sufferers, and some gastrointestinal cancers.

India has refused protection for Glivec on the grounds that it is not a new medicine but an amended version of a known compound - a decision consistent with domestic patent law which sets tight restrictions on multiple patents for a drug.

By contrast, in the United States, amended versions can be patented.

Novartis is seeking to overturn a clause in Indian Patents Law that restricts patent protection for newer forms of existing molecules, and next week's ruling could set a precedent for how other similar patent claims are treated.

"India is a formidable world power with international rights and obligations," Ranjit Shahani, vice chairman and managing director of Novartis India Ltd, the firm's India unit, said in an email to Reuters.

"Novartis understands and recognizes the contribution of generics once drug patents expire; our concern is with the non-recognition of intellectual property rights that ultimately help sustain and advance pharmaceutical research and development."

PROMISE AND PERIL

While Western firms see huge potential in India's rapidly growing $13 billion drugs market, 90 percent of which is made up of generics, they worry that India is failing to recognise valuable medical innovation.

Among Big Pharma's setbacks in the country, India last year allowed local drugmaker Natco Pharma to sell cheaper copies of Bayer AG's cancer drug Nexavar through the controversial mechanism of "compulsory licensing".

A global agreement, known as Trade-Related Aspects of Intellectual Property Rights or TRIPS, allows countries to issue compulsory licences for certain drugs that are deemed unaffordable to large sections of their populations.

Also last year, India revoked patents granted to Pfizer Inc's cancer drug Sutent, Roche Holding AG's hepatitis C drug Pegasys, and Merck & Co's asthma treatment aerosol suspension formulation. They were all revoked on grounds that included lack of innovation.

In another potential hit, Mumbai-based BDR Pharmaceutical International this month applied for a compulsory licence on a blood cancer drug, dasatinib, sold as Sprycel by U.S.-based Bristol-Myers Squibb Co.

Last month, an Indian government panel proposed that prices of patented medicines be based on the country's per capita income, a move that would substantially reduce prices of costly drugs made by global pharmaceutical firms.

"In the minds of global drugmakers, the recent developments will definitely hamper India's image," said lawyer Dominic Alvares, of S. Majumdar & Co which represents Indian drugmakers.

But he said social justice and the public interest should come ahead of India's reputation as a future drugs market. "The developments would impact reputation but for the sake of reputation, do you sacrifice on public interest?"

PATENTS VS AFFORDABILITY

In almost every patent dispute, India has held affordability as a key reason to allow generic drugmakers to launch copycat versions of patented medicines in a country where nearly 40 percent of the population lives on less than $1.25 a day.

For example, Natco Pharma was told by the patents office in its compulsory licence ruling to offer generic Nexavar at 8,800 rupees ($162) for a month's dose - a fraction of Bayer's price of 280,000 rupees. Natco must pay a 7 percent royalty to Bayer.

BDR Pharma, in its application, has offered generic Sprycel at 8,100 rupees for a month's dose compared with Bristol-Myers' price of 165,000 rupees.

Generic versions of Glivec, which won its first patent in 1993, cost about $2,500 for a year's dosage in India, compared with nearly $70,000 in the United States where only the branded version is sold.

Discount programmes mean the branded version is available for much less in poor countries. In India, more than 95 percent of patients using branded Glivec receive it free under a company donation scheme, Novartis has said.

U.S. industry groups this month demanded that the United States increase pressure on India to reform high-tech, agricultural and pharmaceutical policies they said blocked export access and damaged patent rights.

"India has essentially created a protectionist regime that harms U.S. job creators" in favour of India's generic drug manufacturers, Roy Waldron, chief intellectual property counsel for Pfizer, said in testimony to a U.S. House panel.

India's $25 billion drugs industry, a major exporter of generics, is growing at 16 to 17 percent a year.

"You can expect more muscle-flexing from the respective countries of the big pharmaceutical companies in the future," Frost & Sullivan's Sharma said.

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Idenix Pharma shares sink on patent decision

CAMBRIDGE, Mass. -- Idenix Pharmaceuticals Inc. shares sank Monday after the U.S. Patent and Trademark Office determined a competitor was the first to request a patent for a hepatitis therapy.

The biopharmaceutical company said an appeals board decided that Idenix's patent application for compounds used to treat hepatitis C was filed after Gilead Pharmasset LLC's application. The U.S. Patent and Trademark Office appeals board will next determine which company invented the product first.

Idenix said that it does not believe that the patent application is relevant to any of the compounds it is currently developing, including two that are expected to begin midstage studies within the next few months, or another compound for which it soon plans to file a new drug application.

The news sent shares of Cambridge, Mass.-based Idenix down more than 15 percent to $3.89 by early afternoon, its lowest level in months. The company's stock is approaching the bottom of its 52-week trading range of $3.35 to $11.30.

Hepatitis C is a virus that can lead to life-threatening liver damage and is the main cause of liver transplants in the U.S. The disease is spread through the blood, which can happen through sharing intravenous drug needles or having sex with an infected person. There are around 3 million Americans with the disease, which can go undetected for many years until the liver is severely damaged.

Shares of Gilead Sciences Inc. fell 65 cents to $44.86.

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AstraZeneca settles Crestor patent row with generics firms

LONDON, March 25 (Reuters) - AstraZeneca has settled a legal fight over its top-selling cholesterol drug Crestor with generics companies, protecting revenues in the all-important U.S. market until 2016.

Under the agreement, Watson and Egis concede that the Crestor substance patent is valid. The settlement allows Watson to begin selling a generic version of Crestor on May 2, 2016, at a fee to AstraZeneca of 39 percent of net sales, until the end of paediatric exclusivity on July 8, 2016.

AstraZeneca said on Monday its partner Shionogi was also a party to the settlement agreement.

(Reporting by Ben Hirschler)

((ben.hirschler@thomsonreuters.com; +44 20 7542 5082; Reuters Messaging: ben.hirschler.thomsonreuters.com@reuters.net))

Keywords: ASTRAZENECA CRESTOR/

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BRIEF-MAKO Surgical announces patent enforcement actions against Stanmore entities

March 19 (Reuters) - MAKO Surgical Corp :

* Announces patent enforcement actions against stanmore entities

* Filed complaints against stanmore implants worldwide and stanmore inc with the U.S. international trade commission

* Says patent infringement actions are directed at stanmore's computerized orthopedic surgery guidance systems

* Says patents at issue relate to computerized orthopedic surgical devices and software

* Further company coverage

((Bangalore Newsroom; +1 646 223 8780))

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BRIEF-Glenmark Generics confirms patent challenge for its generic version of FINACEA

March 14 (Reuters) - Glenmark Pharmaceuticals Ltd :

* Glenmark confirms patent challenge for its generic version of FINACEA

* Intendis,Intraserv and Bayer Healthcare filed suit against Glenmark Generics

seeking to prevent sales of ANDA product

* Source text: * Further company coverage

((Bangalore Newsroom; +91 4135 5800))

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India rules against Bayer in cancer drug patent case

CHENNAI, March 4 (Reuters) - An Indian patent appeals board dismissed on Monday Bayer AG's petition against a government decision to allow a domestic company to sell cheap copycat versions of cancer drug Nexavar, delivering a blow to global drugmakers' monopolies on high-priced medicines.

Last year, the Indian patents office, under a mechanism called "compulsory licence", allowed Natco Pharma to sell generic Nexavar at 8,800 rupees ($160) for a month's dose -- a fraction of Bayer's price of 280,000 rupees.

Bayer challenged this decision with the Intellectual Property Appellate Board (IPAB) in the southern city of Chennai.

Although dismissing the petition, the board did order Natco Pharma to pay a royalty of 7 percent on sales of generic Nexavar to Bayer, an increase from the 6 percent royalty that had earlier been set.

($1 = 54.90 rupees)

(Reporting by Anupama Chandrasekaran; Editing by Alex Richardson)

((kaustubh.kulkarni@thomsonreuters.com)(+91 22 61807399)(Reuters Messaging: kaustubh.kulkarni.thomsonreuters.com@reuters.net))

Keywords: INDIA BAYER/

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UPDATE 1-India board rules against Bayer in cancer drug patent case

* Bayer's appeal against licence for generic Nexavar dismissed

* Royalty payment to Bayer raised to 7 pct on Nexavar sales * Natco Pharma fined for presenting incorrect data

(Adds details, background, quotes)

By Anupama Chandrasekaran

CHENNAI, March 4 (Reuters) - An Indian patent appeals board upheld on Monday a decision to allow a domestic company to sell a generic version of Bayer AG's cancer drug Nexavar, in a blow for global drugmakers' efforts to hold on to monopolies on high-price medicines.

The ruling paves the way for the issue of more so-called compulsory licences as governments, particularly in emerging markets such as China and Thailand, battle to bring down healthcare costs and provide access to affordable drugs to treat diseases such as cancer, HIV-AIDS and hepatitis.

Bayer, Germany's largest drugmaker, said it would continue to fight to overturn the decision, which it said weakened the international patent system and endangered pharmaceutical research.

Under a global Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, countries can issue compulsory licences on certain drugs that are deemed unaffordable to a large section of their populations.

India's $13 billion drug market is seen by drugmakers as a huge opportunity, but there are concerns about the level of protection for intellectual property in the country -- where generic medicines account for more than 90 percent of drug sales -- after a series of judicial setbacks for "big pharma".

COMPULSORY LICENCE CHALLENGED

Last year, the Indian patents office allowed Natco Pharma

to sell generic Nexavar at 8,800 rupees ($160) for a month's dose -- a fraction of Bayer's price of 280,000 rupees.

Bayer challenged this decision to grant Natco a compulsory licence at the Intellectual Property Appellate Board (IPAB) in the southern city of Chennai.

On Monday the board dismissed the petition, although it did order Natco Pharma to pay a royalty of 7 percent on sales of generic Nexavar to Bayer, an increase from the 6 percent royalty that had earlier been set.

Also, the board fined Natco Pharma 50,000 rupees for presenting incorrect facts during the legal proceedings. The amount would be donated to a cancer treatment hospital, the board ordered.

Announcing the decision, Justice Prabha Sridevan said the kidney and liver cancer drug should be available at an affordable price to everybody.

Bayer said in a statement it "strongly disagreed" with the conclusions of the board, adding that it would seek to challenge it at the High Court in Mumbai.

"The challenges faced by the Indian healthcare system have little or nothing to do with patents on pharmaceutical products as all products on India's essential drug list are not patented," the company said.

Natco Pharma Company Secretary M. Adinarayana told reporters the board had delivered a "reasoned, detailed" decision that could be "sustained in any court of law".

LEGAL SETBACKS

In a separate case, Bayer has accused another Indian drugmaker, Cipla , of infringing its patent on Nexavar. Cipla had launched its generic version of Nexavar before Natco won the compulsory licence.

Cipla undercut Natco's price in May last year and now sells the drug at 6,840 rupees for a month's dose.

Among other setbacks for Western drug companies, India has revoked patents granted to Pfizer Inc's cancer drug Sutent, Roche Holding AG's hepatitis C drug Pegasys and Merck & Co's asthma treatment aerosol suspension formulation.

Another case involving drug patents is currently in front of the Supreme Court, with Novartis battling against an earlier decision refusing it a patent on cancer drug Glivec.

New Delhi has also taken other measures, such as controlling the prices of generic medicines and providing free medicines at government-run hospitals that cater to the country's poor.

Last week a government panel recommended a formula to curb prices of patented drugs to make them affordable for the world's second-most populous country.

($1 = 54.90 rupees)

(Additional reporting and writing by Kaustubh Kulkarni in MUMBAI; Editing by Alex Richardson)

((kaustubh.kulkarni@thomsonreuters.com)(+91 22 61807399)(Reuters Messaging: kaustubh.kulkarni.thomsonreuters.com@reuters.net))

Keywords: INDIA BAYER/

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India rules against Bayer in cancer drug patent case

CHENNAI, March 4 (Reuters) - An Indian patent appeals board dismissed on Monday Bayer AG's petition against a government decision to allow a domestic company to sell cheap copycat versions of cancer drug Nexavar, delivering a blow to global drugmakers' monopolies on high-priced medicines.

Last year, the Indian patents office, under a mechanism called "compulsory licence", allowed Natco Pharma to sell generic Nexavar at 8,800 rupees ($160) for a month's dose -- a fraction of Bayer's price of 280,000 rupees.

Bayer challenged this decision with the Intellectual Property Appellate Board (IPAB) in the southern city of Chennai.

Although dismissing the petition, the board did order Natco Pharma to pay a royalty of 7 percent on sales of generic Nexavar to Bayer, an increase from the 6 percent royalty that had earlier been set.

($1 = 54.90 rupees)

(Reporting by Anupama Chandrasekaran; Editing by Alex Richardson)

((kaustubh.kulkarni@thomsonreuters.com)(+91 22 61807399)(Reuters Messaging: kaustubh.kulkarni.thomsonreuters.com@reuters.net))

Keywords: INDIA BAYER/

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UPDATE 1-India board rules against Bayer in cancer drug patent case

* Bayer's appeal against licence for generic Nexavar dismissed

* Royalty payment to Bayer raised to 7 pct on Nexavar sales * Natco Pharma fined for presenting incorrect data

(Adds details, background, quotes)

By Anupama Chandrasekaran

CHENNAI, March 4 (Reuters) - An Indian patent appeals board upheld on Monday a decision to allow a domestic company to sell a generic version of Bayer AG's cancer drug Nexavar, in a blow for global drugmakers' efforts to hold on to monopolies on high-price medicines.

The ruling paves the way for the issue of more so-called compulsory licences as governments, particularly in emerging markets such as China and Thailand, battle to bring down healthcare costs and provide access to affordable drugs to treat diseases such as cancer, HIV-AIDS and hepatitis.

Bayer, Germany's largest drugmaker, said it would continue to fight to overturn the decision, which it said weakened the international patent system and endangered pharmaceutical research.

Under a global Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, countries can issue compulsory licences on certain drugs that are deemed unaffordable to a large section of their populations.

India's $13 billion drug market is seen by drugmakers as a huge opportunity, but there are concerns about the level of protection for intellectual property in the country -- where generic medicines account for more than 90 percent of drug sales -- after a series of judicial setbacks for "big pharma".

COMPULSORY LICENCE CHALLENGED

Last year, the Indian patents office allowed Natco Pharma

to sell generic Nexavar at 8,800 rupees ($160) for a month's dose -- a fraction of Bayer's price of 280,000 rupees.

Bayer challenged this decision to grant Natco a compulsory licence at the Intellectual Property Appellate Board (IPAB) in the southern city of Chennai.

On Monday the board dismissed the petition, although it did order Natco Pharma to pay a royalty of 7 percent on sales of generic Nexavar to Bayer, an increase from the 6 percent royalty that had earlier been set.

Also, the board fined Natco Pharma 50,000 rupees for presenting incorrect facts during the legal proceedings. The amount would be donated to a cancer treatment hospital, the board ordered.

Announcing the decision, Justice Prabha Sridevan said the kidney and liver cancer drug should be available at an affordable price to everybody.

Bayer said in a statement it "strongly disagreed" with the conclusions of the board, adding that it would seek to challenge it at the High Court in Mumbai.

"The challenges faced by the Indian healthcare system have little or nothing to do with patents on pharmaceutical products as all products on India's essential drug list are not patented," the company said.

Natco Pharma Company Secretary M. Adinarayana told reporters the board had delivered a "reasoned, detailed" decision that could be "sustained in any court of law".

LEGAL SETBACKS

In a separate case, Bayer has accused another Indian drugmaker, Cipla , of infringing its patent on Nexavar. Cipla had launched its generic version of Nexavar before Natco won the compulsory licence.

Cipla undercut Natco's price in May last year and now sells the drug at 6,840 rupees for a month's dose.

Among other setbacks for Western drug companies, India has revoked patents granted to Pfizer Inc's cancer drug Sutent, Roche Holding AG's hepatitis C drug Pegasys and Merck & Co's asthma treatment aerosol suspension formulation.

Another case involving drug patents is currently in front of the Supreme Court, with Novartis battling against an earlier decision refusing it a patent on cancer drug Glivec.

New Delhi has also taken other measures, such as controlling the prices of generic medicines and providing free medicines at government-run hospitals that cater to the country's poor.

Last week a government panel recommended a formula to curb prices of patented drugs to make them affordable for the world's second-most populous country.

($1 = 54.90 rupees)

(Additional reporting and writing by Kaustubh Kulkarni in MUMBAI; Editing by Alex Richardson)

((kaustubh.kulkarni@thomsonreuters.com)(+91 22 61807399)(Reuters Messaging: kaustubh.kulkarni.thomsonreuters.com@reuters.net))

Keywords: INDIA BAYER/

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GlaxoSmithKline unit joins patent pool for AIDS drugs

* ViiV Healthcare places paediatric abacavir in patent pool

* Move follows earlier sign-up to pool by Gilead Sciences

LONDON, Feb 27 (Reuters) - GlaxoSmithKline's HIV/AIDS drugs business is to share intellectual property rights on children's medicine in a patent pool designed to make treatments more widely available in poor countries.

ViiV Healthcare, majority-owned by GSK, is the second research-based pharmaceutical business to sign up to the new Medicines Patent Pool, following a lead set in 2011 by Gilead Sciences.

Although more than half of people living with the human immunodeficiency virus (HIV) that causes AIDS now get the drugs they need - thanks to a major roll-out of treatment in Africa - an estimated 6.8 million still go without, according to UNAIDS.

The Medicines Patent Pool (MPP), launched in 2010 by the UNITAID health financing system that is funded by a levy on airline tickets, aims to address the remaining gap by getting patent holders to share know-how with makers of cheap generic drugs.

In the case of ViiV, a key paediatric medicine known as abacavir will be made available to generic manufacturers which will be able to take a licence to make and sell it in 118 poor countries, the patent pool said on Wednesday.

ViiV and the patent pool have also agreed to negotiate further licences that will allow generics firms to manufacture low-cost versions of an experimental drug, dolutegravir, that is currently awaiting regulatory approval in Western markets.

There are 3.4 million children living with HIV worldwide but only 562,000 have access to medicines. Treating them is challenging because many drugs are not adapted for use in children.

Abacavir and dolutegravir are both seen as priority products for fighting HIV in poor countries. ViiV also sells other older drugs, some of which are already off patent and available as cheaper generics.

ViiV - which is owned 76.5 percent by GSK, 13.5 percent by Pfizer and 10 percent by Shionogi - only signed up to the patent pool after lengthy negotiations.

Some other major drugmakers have yet to join.

Bristol-Myers Squibb, Roche and privately owned Boehringer-Ingelheim are currently discussing plans to join the scheme, but Abbott, Johnson & Johnson and Merck have so far remained outside.

J&J decided in November to take unilateral action by not enforcing its patents on HIV drug Prezista in a limited number of poor countries, in a move that disappointed campaigners who argued joining the pool would have been more effective.

(Reporting by Ben Hirschler, Editing by Kate Kelland and Mark Potter)

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U.S. court invalidates patent on Bristol hepatitis B drug

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UPDATE 1-U.S. court invalidates patent on Bristol hepatitis B drug

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China Is Getting Into The Patent Game For Alternative-Energy Cars

China is trying to get a leg up on the market for clean transportation by bulking up the rate it’s been filing patents. According to a recent report in Europe’s China Daily, China filed over 2,000 patents for alternative-energy cars in 2012, placing it just behind Japan and the United States, and dead even with Germany and South Korea:

With a worldwide push for sustainable, clean transportation, patents are vital to survival in the global new-energy vehicle industry, China Intellectual Property News reported.

China had filed more than 2,000 patent applications – 8 percent of the world total – for new-energy cars by the end of last year to share the third place with Germany and South Korea, according to the statistics from Thomson Reuters.

Japan ranks the first with nearly 9,000 patents, followed by the United States with 4,000, accounting for a respective 60 percent and 22 percent of the world total.

China has actually been in the patent game for sometime. In 2011, the country’s patent office received more applications — for all forms of invention, not just green technology — than any other nation. At the same time, very few Chinese investors seek to patent their ideas abroad — less than 5 percent between 2005 and 2009. Generally speaking, if an inventor has an idea of genuine merit, they’ll seek to patent it as many places as possible. Concentrating merely on China’s office could be an indication that other incentives are driving the patent, such as the chance to snatch up a government subsidy.

The race between various countries to accrue patents in alternative-energy also raises the possibility of “patent wars,” such as those that have riled the world of software. Companies and interests attempt to round up and hoard patents in order to corner sources of revenue. That is, of course, very profitable for them, but it also tends to dampen innovation in the relevant industry. The spread of patents forces companies and inventors to spend ever more time and money making sure every conceptual aspect of the technology they’re working on is in the legal clear, or is properly licensed. That drives up costs for the companies, for consumers, and slows down the creation of new products and technologies that can raise everyone’s well-being — like cars and other forms of transport powered by sustainable energy. It arguably even drives up inequality.

The problem is especially acute in the software world, where it’s especially difficult to organize who has the rights to what into a public and easily-searchable database. But in principle the inefficiencies and transaction costs that come with over-zealous competition for patents can afflict any industry, including green tech and green transportation.

In February of 2011, for example, Butamax Advanced Biofuels, a joint venture between BP and DuPont, sued another advanced biofuels company, Gevo, for infringing their patent on a process to produce microbial-based biofuel.

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Patent 'Cliff' a Challenge, but We Can Manage: Lilly CEO

Victor J. Blue | Bloomberg | Getty Images

Eli Lilly will be "very challenged" by the loss of exclusivity on several blockbuster drugs, CEO John Lechleiter told CNBC on Tuesday, but added the company is engaged in other ways to revive growth next year.

Lilly is one of many drug manufacturers confronting a wave of patent expirations that imperils its ability to profit from key drugs. The "patent cliff," which it's called by many industry watchers, could shave as much as $25 billion off drug sales this year, according to estimates from Fitch Ratings.

Although Lechleiter said his company would be "very challenged" by the loss of key patents, he told CNBC's "Squawk on the Street" that Lilly was cultivating new lines of medicines and existing markets.

"We saw the patent cliff coming as recently as the middle of the last decade and began to invest in our pipeline," the CEO said, giving management time to respond with new drug trials. He said Lilly has about seven in various stages of testing.

"Unfortunately, the timing of the launch of the first of those products doesn't precisely coincide with the loss of revenue from our patents," Lechleiter said.

In 2011, a federal court ruled that generic drug companies could not sell versions of Eli Lilly's blockbuster Cymbalta until this June, when the patent protection is expected to lapse.

"But the guidance we've given is we expect to resume growth after 2014, when we will feel the brunt of the loss of the Cymbalta patent," he said, speaking of Lilly's anti-depression drug. "We're very confident we can achieve that."

Lechleiter stated that the patent cliff had impacted Lilly's decision to hike its dividend payments.

"We provided guidance in 2009, so roughly three years ago, that as we go through this period, we're going to be very challenged with the loss of several of our patented products," he said, adding that the company's goal "was to maintain the dividend at the current level and, of course, that's what we've done."

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