Bayer fights courts for Nexavar as cheaper rivals take over

German drugmaker Bayer may be fighting it out in the courtroom to defend its patent rights on cancer drug, Nexavar. But out in the market, it's already lost considerable market share to cheaper variants from Cipla  and Natco . CNBC-TV18's Archana Shukla reports that the reason is the dramatic change in the dynamics of the Indian kidney-cancer market over the last one year.

It's been a lengthy battle for Bayer with the patent controller and it's still far from over. The latest is a setback for Bayer with the IPAB (Intellectual Property Appellate Board) rejecting the German firm's plea to stay the compulsory licence granted to Natco for its patented cancer drug, Nexavar.

A year ago, Bayer was servicing Nexavar to 200 patients - garnering Rs 11 crore. But while it has not been able to scale up since then, market sources indicate that in the last year, Indian generic firms Natco and Cipla have together sold generic versions of Sorafenib worth Rs 25 crore simply on the virtue of being cheaper.

Cipla, which is facing an infringement suit from Bayer as well, leads the Sorafenib market at Rs 6,890 per month

Both generic Sorafenib brands were launched at risk in 2011 itself. But sales up-tick was seen after Natco got the compulsory licence in March 2012, followed by Cipla slashing its prices by over 75 percent.

To take Cipla head-on, Natco is discounting its Sorafenib brand by over 30-40 percent, aiming to sell at price points of Rs 5,000 and secure multiple hospital tenders through aggressive pricing.

These attempts, industry sources say, will allow Natco and Cipla jointly service over 6,000 needy patients and about one-fifth of the target population of 30,000 advanced kidney and renal cancer patients.

Bayer in its appeal has also given an undertaking to sell Nexavar at Rs 30,000, but in the current market dynamics, Bayer's pricing could still be significantly higher.

While Bayer's main appeal against the compulsory licence order granted to Natco is yet to be heard, the changing dynamics have thrown open other contentions. With certain quarters questioning the cut-off price for a compulsory license, this is an issue that may prove controversial going forward.