Financial Daily from THE HINDU group of publications
Saturday, Feb 28, 2004
Cipla to ship AIDS drugs to Malaysia in 2 months
Mumbai , Feb. 27
CIPLA Ltd expects to ship its consignment of anti-AIDS drugs or anti-retrovirals (ARV) to Malaysia in a couple of months, the Joint Managing Director of Cipla, Mr Amar Lulla, told Business Line.
This follows the issuance of a compulsory licence by the Malaysian Government for the supply of ARVs to Government-run or public hospitals in Malaysia.
The ARVs that Cipla will be exporting are generic or chemically-equivalent versions of Didanosine 100 mg and 25 mg tablets, produced originally by Bristol-Myers Squibb (BMS) and Zidovudine 100 mg capsule and the combination drug Lamivudine 150 mg + Zidovudine 300 mg tablet both from GlaxoSmithKline (GSK).
Unwilling to divulge the size of the order, Mr Lulla said that it was a "significant" order. But, the royalty to be paid to the original patent-holders of these drugs, i.e. BMS and GSK, is yet to be worked out.
"The payment of compensation shall be made to the patent holder(s) within two months of each import of the said drugs. The rate of compensation is to be determined at a later date," industry sources familiar with the development said.
However, Mr Lulla said that the royalty issue would be taken care of by the Malaysian Government and it would not stop Cipla from going ahead with its supplies. The authorisation is valid for two years, commencing November 2003, and analysts said that Cipla's execution of the order would be closely watched by other countries and companies.
"If the royalty issue is resolved and Cipla is able to supply soon enough, then more countries would be encouraged to adopt similar measures. It is possibly the first compulsory licence issued by any Government after the August 30, 2003, decision on Para 6 and it could provide an interesting test case to assess whether the decision is workable or needs modification," observe industry analysts.
Trade negotiations last year had allowed countries to issue compulsory licenses in the event of public health emergencies and the onus was on local governments to decide what was a health emergency that was serious enough to invoke a compulsory licence.
A compulsory licence allows a country to over-ride an existing drug patent and get other companies to supply the same drug at a cost decided upon by the Government. A royalty payment was to be made to the innovator company, whose patent would be "broken" when a compulsory licence was issued.
However, the issue has always generated debate, since generic companies felt that governments would use it to haggle over price. Multinational pharma companies felt that the triggers for governments to issue a compulsory licence were too low and that generic companies would, in fact, divert the drugs into other high-margin markets.
Trade bodies had tried to address some of these issues by asking generic companies to package their drugs and colour them differently, so that they could not be sold in the open market or diverted to other regions.
And while Cipla may have undertaken a similar order to Nigeria in 2001, the present order generates interest also because it comes at a time when the Indian Government is trying to get its act together on working out similar procurements to supply ARVs to HIV/AIDS patients in the country, observe analysts.
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