The Hindu Business Line : Cipla MD favours compulsory licensing sans monopoly

HE turns the sepia-tone pages of his father Dr K.A. Hamied's autobiography and points to the 11-year old in a photograph taken at Cipla on August 15, 1947.

"That's me. I've been there since the inception," says Dr Yusuf Hamied, Chairman and Managing Director of Cipla, who today steers the Rs 2,400-crore drug company. Dr Hamied, 69, has seen "interesting times" during the last 46 years in the Indian pharmaceutical industry.

Cipla finds itself at the heart of the recent global patent debate over Tamiflu, the medicine for bird-flu, having offered to make similar versions of the drug to meet shortages in supply worldwide.

Dr Hamied pointed out how bird-flu has, in fact, given India an opportunity to take a hard look at how it wants to implement the product-patent regime that became effective here since January. "Healthcare in India is not a one-off crisis like bird-flu," he says. Despite the risk of sounding like a "broken record," he re-paints the grim picture: "Healthcare in India is in a state of perpetual crisis. The disease profile is frightening: 80 million cardiac patients, 80 million with mental illness, 60 million diabetics ...one in three Indians is a latent carrier of TB. The World Bank has said that India will have 35 million HIV cases by 2015...."

"What we want is a permanent compulsory licensing system without monopoly. We respect patents, but no monopoly. India cannot afford a monopoly. So pay a four per cent royalty to the patent-holder," he suggests.

A compulsory licence (CL) allows generic drug companies to make similar versions of an original drug, but with a royalty payment to the innovator or originator of the drug.

Governments can use a health-emergency to issue a CL. However, multinational innovator companies argue that the triggers for a CL, under India's new patent regime, are too low.

Dr Hamied, however, illustrates his point with the two drugs seen to be effective in treating the symptoms of bird-flu — Oseltamivir (marketed by Roche as Tamiflu) and Zanamivir (marketed by GlaxoSmithKline as Relenza).

"They are not sold by their originators. They are in-licensed products," he points out. Roche is paying Gilead a 10 per cent royalty on Tamiflu sales, while GSK pays Biota a seven per cent royalty on Relenza.

"Because we are third world, our prices are low. But I am willing to pay up to four per cent on my net sales to the originator," he argues.

Zanamivir is a pre-1995 drug in India, which means generic companies can make copies of the drug, he says. But Oseltamivir is a border-line case.

"The patent has not yet been granted in India," he points out, adding that he would opt for a legal recourse if required. A patent is "the grant of a gift or favour" by the Government to the inventor, giving him a 20-year exclusivity. "That being the case, the Government always has the right to revoke it, under whatever circumstance," he observes.

Shuffling through reams of papers on the issue, he says there is a cloud over Gilead's first patent on Oseltamivir. "Let the judge decide, if it goes to court," says Dr Hamied. He points out that if a patent is pending on Oseltamivir, companies would be allowed pre-grant opposition, where they voice their concern before a patent is issued.

"We will certainly oppose for clarity. And if it is a genuine patent, I am still allowed to manufacture the drug and export it to those countries where there is no patent."

"Nobody can stop me from manufacturing or storing the drug in the warehouse," he says emphatically. "Only selling to those countries where there are valid patents (can be stopped) — we don't want to do in any event. I've made it very clear that we've not looked at the whole thing from a commercial point of view. But we have to plan for an emergency."

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Cipla MD favours compulsory licensing sans monopoly