Germany's Bayer AG is planning to challenge the decision by the government of India to allow an Indian drug manufacturer to produce and market its patented cancer medicine Nexavar.

Natco Pharma was given the permission to make and sell a generic version of Nexavar in India, which means that the patients will be able to receive it at a much cheaper price of Rs 8,800 ($176) for a 120-tablet pack. For the same pack, Bayer is charging Rs 280,000 ($5600). In return, Natco Pharma will have to pay 6 percent royalty on sales to Bayer.

The government's move was aimed at making the life saving drug available at affordable prices to patients undergoing treatment for liver and kidney cancer.

This decision is seen as a landmark verdict with high probability that many Indian drug manufacturers would be filing for compulsory licenses, which in turn could bring down the excessive prices of many medicines.

Meanwhile, Bayer's spokeswoman Sabina Cusimano said that the company was considering a legal challenge to the decision. We will see if we can further defend our intellectual property rights in India, she said.