Opinion

Indian generics in need of policy tonic

P. T. Jyothi Datta | Updated on February 12, 2013 Published on February 12, 2013

Yusuf K. Hamied

Indian drug companies are doing well because of the momentum of the last 50 years. But from 2015, they will face difficulties. YUSUF K. HAMIED, CHAIRMAN, CIPLA Multinationals approach healthcare as a business. When you are dealing with human lives, you need to have a humanitarian approach. “If I win a case and the product is off patent, anyone can market it.”



“My life has not been the same from February 2001,” says Cipla Chairman Yusuf K. Hamied, recounting the days leading up to a dramatic event that put India, indelibly, on the global healthcare map.

The home-spun drug company had just taken the battle on drug prices right into the backyard of multinational drug-majors, by slashing its price on a cocktail of HIV/AIDS drugs sold in Africa. Cipla offered the triple-drug combination, Triomune, at less than $1 a day, about $350 annually. And this had taken the wind out of the multinational campaign, whose price for the combined three-drug therapy was about $12,000 per year.

Having been a key campaigner for affordable medicine, Hamied’s decision to now step down as Cipla Managing Director from April, has industry and humanitarian circles watching with concern and interest. Will Cipla continue to show the zeal that Hamied epitomised? And will he continue to battle the “sustained disinformation campaigns” that the generic drugs industry has to constantly deal with?

From being labelled fakes to having their quality questioned, generic drug-makers have had to fend off overt and covert attempts to curb their sale in global markets. They are targeted because generics (medicines that are chemically similar to an original drug) are less expensive, since they do not have to invest as much in research. And Governments, in their efforts to control healthcare costs, are increasingly leaning on generic drugs.

Though slashing prices on HIV/AIDS drugs in 2001 was a remarkable milestone, Hamied recalls, the run-up to the path-breaking development was anything but smooth. There were unproductive interactions with Indian health authorities in 1991 and a European Union meeting in 2000. Both times, Cipla’s offer to provide HIV/AIDS medicines at reduced prices met with “zero” enthusiasm, he recalls.

But a health activist who had heard Hamied’s proposal, later called and asked if he could further reduce the price to a dollar a day for patients. Cipla management put their heads together on the costing. And what happened next, in February 2001, will be written every other time the world debates access to affordable medicines. In fact, in late 2011, Cipla took its philosophy to cancer drugs, where prices were slashed on a few drugs in the Indian market.

Sitting in his board room, — flanked by a drawing of Mahatma Gandhi and black and white pictures of Cipla founder Dr K.A. Hamied with Gandhi and Pandit Nehru — Yusuf Hamied fields questions on the road ahead for him and the Rs 8,000-crore company.

“It is not a question of zeal,” he says. “For us to be humanitarian internationally, I have to be stable in my home market. And for that I require the Government to provide us with the infrastructure to be stable here. That is where I am being misunderstood,” he says, candidly.

“It is not like I am against the Government, I am the most national-minded Indian that you will find. I have set up 30 factories in the country,” he adds.

Pragmatic CL

Harking back to 1970, when the Government decided to go with process patents and not product patents, Hamied says, it changed the face of the drug industry in India. “I fought personally very hard for that and probably I am the only one alive,” he says, apart from the then patent controller.

Batting for an automatic compulsory licensing policy on patented drugs, Hamied says, the idea is to prevent monopoly of any one company.

A compulsory licensing system allows a generic drug company to make a similar version of an innovator drug, by paying them a royalty. As a result, more companies make a drug, making it affordable and improving access.

As the Centre reportedly looks at providing compulsory licences (CL) on three cancer drugs, Hamied says, the Government will have to do what is good for India and within the legality of the domestic law and the global trade framework, TRIPS (Trade Related aspects of Intellectual Property Rights).

“We can’t get out of patents. The Government was wrong in backdating the Patent law from 2005 to 1995. That was totally wrong, unpardonable I would say,” he says.

Almost twenty years from 1995, Indian companies are doing well because of the momentum of the last 50 years. But 2015 onwards, Indian drug companies will face great difficulties, he says.

The problem in linking CLs with the critical nature of an illness is that the present system of defining essential drugs is flawed. For example, he says, if someone suffers from cancer, the cancer drug is essential.

If someone suffers from headache, paracetamol becomes essential.

“You can’t say essential drugs depend on the disease – today I don’t have prostate cancer, so the drug is not essential to me but essential to somebody else. So the definition of what is an essential drug is a misnomer, it is disease-related,” he says.

India should have a system similar to the Canadian law on CLs, he says.

“So I should have the automatic licence of right to copy a patented drug – pass it through the regulatory – and then pay them (the innovator company) the royalty,” he says, adding that a 4 per cent royalty be paid for India and the third world, and a higher royalty if they were allowed to sell to developed markets.

But, the campaign for automatic licensing is not something new, says Hamied, flipping open a copy of the final recommendations made by a committee on Intellectual Property Rights, headed by former Prime Minister I.K. Gujral, based on hearings in the Rajya Sabha.

Discussing the draft Dunkel proposals (in the run-up to TRIPS) the Parliamentary Standing Committee report (1993-94) had recommended, among other things, “that India should insist for grant of automatic licensing in certain circumstances.” It was debated thoroughly, this was recommended by the committee, and former Prime Minister, several members of Parliament, and nothing happens, he says.

Indigenous backbone

With the country now debating its drug policy, price control of medicines and how to prevent home-grown drug companies from selling out, Hamied stresses the need for Government to work with the industry in solving these contentious and emotionally charged issues.

“It is the indigenous pharma industry that is exporting today. It is the indigenous pharma industry that is the backbone of the health in the country. It is the indigenous pharma industry that is regarded as the pharmacy capital of the world. So why are you not taking us into confidence,” he says, in true Hamied-speak.

Indian drug companies, on their part, need to show a united front, he says. “Multinationals approach as a business. Indian companies approach individually,” he says, reflecting on how pharma associations were originally formed to fight litigation together, through pooled resources. “If I win a case and the product is off patent, anyone can market it,” he points out.  “If one is in healthcare you cannot run healthcare totally from a 100 per cent business point of view. Multinationals run it, they say they are obligated to their shareholders. They are running it as a business.

I think in all fairness, when you are dealing with human lives you need to have a humanitarian approach to business. That is what I feel, particularly in an environment like India. Over the years that I have been here in Cipla now, I have this approach,” says the 77 year-old chief.

“Single-handedly if I have done anything for India,” he says, referring to 2001, when an Indian drug company caught the world attention as a source of quality and reliable medicines, “I have done a lot to put India on that map.”

Structured philanthropy

“In my personal opinion, philanthropy in the third world is different from philanthropy in the first world,” says Dr Hamied, pointing out that India needs to structure its approach to dealing with its social concerns.  Reeling out statistics, he says, family planning is a key concern for India. In 2050, Mumbai will have over 40 million people. Of today’s 30 million, 60 per cent are on the road, with no water, no electricity or sanitation. “About 500 million people - fellow Indians are living their lives in abject darkness, no electricity,” he says. And if you cannot change that scenario, so you need to work on the population, he adds. “For me, family planning is on the top of the list. Linked to that is primary education,” for - through education there is better control. “I am personally keen to finance education in English in India,” he adds, as it is a common language across the country. Hamied runs a school in Ahmednagar for children and a cancer-related palliative care centre in Pune. Just giving a donation is not good enough, he says, adding good human resources are required to run sustainable philanthropic institutions. Part of the reason for good hands to run the institution, could also be because, as a non-resident Indian, he is away for much of the year. “But winter months I will never be outside, it is too cold,” he quips, adding “I follow the sun.”

Published on February 12, 2013
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