The drug, used to treat liver and kidney cancers, is currently sold at more than €4,000 (284,428 Rupees) for a month's supply of 120 tablets – well beyond the financial reach of most Indian patients.
Generic drugs company Natco took Bayer through the Indian courts to win a license to produce cut-price copies of the drug. It said in a statement it would sell the drug at less than €134 (8880 Rupees) a month.
The Indian Patents Act rules that drugs unavailable at affordable prices must be compulsorily licensed after three years of patent approval, the Times of India newspaper reported on Tuesday.
Under the agreement, Natco will pay Bayer six percent royalties on sales, but Bayer is determined to continue fighting the decision if possible.
This was decided on Monday, a spokeswoman for Bayer confirmed to The Local. “We are very disappointed and will be checking out legal options,” she said.
Indian Patent Controller PH Kurian said Bayer had priced the drug “exorbitantly,” making it “out of reach” of most Indian patents.
The case will be watched carefully by other pharmaceutical firms keen to protect their patented drugs and the high prices they can demand for them.
Under the World Trade Organization's TRIPS Agreement, which governs trade and intellectual property rules, compulsory licences are a legally recognised means to overcome barriers in accessing affordable medicines.
The decision was welcomed by Medecins Sans Frontieres (Doctors Without Borders), whose policy director Michelle Childs said it, “serves as a warning that when drug companies are price gouging and limiting availability, there is a consequence.”