BUSINESS C&EN TALKS
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AN INDIAN ICONOCLAST Cipla's Yusuf S. Hamied turns conventional wisdom on pharmaceutical patents upside down JEAN-FRANÇOIS TREMBLAY, C&EN HONG KONG
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JOYOUS ATMOSPHERE REIGNS
at Cipla's headquarters in downtown Mumbai. Employees smile at visitors and cheerfully carry on their company's mission of producing and marketing highquaHty pharmaceuticals at affordable prices. One would not guess that Cipla is at the center ofan international debate on patent protection. Within the wide range ofpharmaceuticals it offers, Cipla produces several drugs that are still protected by patents in developed countries. Last year, it offered to provide an AIDS drug cocktail to African countries for a fraction of the price asked by the large pharmaceutical companies that hold the patents for these drugs. Sir Richard Sykes, chairman of GlaxoSmithKline, which holds a patent on one of the drugs in the cocktail, called Cipla a pirate. Subsequently, however, most of the patent holders sharply reduced their prices in Africa. The main target of Sykes's charge, Cipla Chairman Yusuf K. Hamied, is as unassuming as can possibly be. Cipla employs no public relations staff. Hamied's office, where the door remains open during meetings, isflankedby only one relaxed secretary. Hamied wears his partly buttoned shirt without a tie, and apologetically fields the phone calls ringing directly in his office until the frequent interruptions ruin the flow of his ideas. Hamied is no lightweight. In 1960, at the age of23, he earned a Ph.D. in organic chemistryfromCambridge University, where he studied under 1957 Nobel Prize winner AlexanderLordlbdd.Startingoutinl960 as head of R&D at Cipla, he now leads one of India's preeminent pharmaceutical companies, one that has been approved by the Food & Drug Administration to export certain generic drugs to the U.S. In March, the World Health Organization also approved Cipla as one of its eight suppliers of AIDS drugs. Peter Pollak, a fine chemicals business consultant based in Switzerland, says that Cipla built worldHTTP://PUBS.ACS.ORG/CEN
REBEL WITH A CAUSE Hamied believes the world's patent system leads to drug monopolies.
scale pharmaceutical ingredients plants for a tenth ofwhat they cost in industrialized countries. The founder of Cipla, Hamied's father, the late Khwaja Abdul Hamied, was a nationalfigurewhen India gained independence in 1947. This means that, as a child, Yusuf Hamied met with historical figures such as Jawaharlal Nehru and Mohandas K. Gandhi. Socially, Hamied counts singer Luciano Pavarotti and conductor Zubin Mehta among his friends. His worldly views were further helped by having a Muslim father and a LithuanianJewish mother. Hamied emphatically objects to being labeled a patent pirate. "Ifyou are a pirate, you are a thief, and if you are a thief you have broken some laws," he says. He notes that Cipla has never been involved in acourt battle over patent infringements. However, the independent distributors of Cipla's products in foreign countries have been. It was Yusuf Hamied who persuaded India's then-prime minister Indira Gandhi in 1972 to modify India's patent laws so that only process patents are recognized.
It became fair game in India to produce and sell drugs still under patent protection in other countries, as long as these drugs were manufactured through unique processes. "Patent laws are national laws, and patent laws are there for national needs," he says. JUST BEFORE the Indian patent law was modified, Hamied says, extensive and ultimately unsuccessful discussions with multinational drug companies took place. "They foughtus tooth and nail,"he recalls. India essentially wanted to pay royalties for the right to manufacture and sell their products. Multinationals wanted Indian patent laws to resemble those in other countries. The 1972 patent act has served India well, he says. Pharmaceutical prices in India are among the lowest in the world. Most pharmaceuticals sold in India are made by Indian companies that are in many cases also selling drugs on the international market. Indianfirmssuch as Dr. Reddy's, Ranbaxy, and Wockhardt have grown to their current size thanks to the 1972 patent regime, he contends. One of Hamied's recurrent themes is that international blockbuster drugs are marketed exclusively by English or U.S. pharmaceutical companies. French or Japanese companies have not been successful in their efforts to launch a blockbuster drug, he says. If the French and Japanese cannot launch blockbuster drugs, it's hopeless for Indian companies to even try, he reasons. Introducing a new drug is exceedingly difficult, he goes on. Every year, only about CIPLA AT A GLANCE Headquarters: Mumbai, India Founded: 1935, as the Chemical, Industrial, Pharmaceuticals Laboratories; publicly traded Sales: $221 million, 37% growth over previous year Exports: About 24% of total sales Net profit: $36 million Major products: Wide range of bulk drugs and formulations NOTE: Figures for fiscal year ended March 31, 2001.
13 new pharmaceuticals are introduced in the US. market after an arduous set oftests. 'Anew chemical entity requires chemistry, toxicology, pharmacology, pharmacokinetics, and then clinical trials," Hamied says. "Chemistry in India is very strong. But do you know today there is not one C & E N / MAY 6. 2002
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BUSINESS lab in India whose toxicology results are accepted internationally?,, Although he recognizes the difficulties involved in introducing new pharmaceu ticals on the lucrative U.S. market, he de nies that the large multinational firms owe their success to their ability to clear all the regulatory hurdles. Rather, he says, the suc cess of thesefirmsis the result oftheir glob al marketing strength. Even in its own base, Cipla cannot con vince the medical community to adopt drugs it has discovered and patented, Hamied says. He explains that Indian doc tors rarely pay attention to medical journals that are not from the U.S. or the U.K. Whereas Indian doctors don't think twice about prescribing a generic version ofan in ternationally known drug, they balk at rec ommending lesser known pharmaceuticals. 'The only way you can get drugs to be internationally acceptable is when En
gland or America introduces them," Hamied claims. "There was a product de veloped by the Russians 25 years ago, Ftorafur. It is an oral drug for colon and stomach cancer, and it was not patented. So the Japanese picked it up, and within a short period of time it became the second largest selling drug inJapan because of the stomach and colon cancers that theJapan ese are more susceptible to. We synthe sized it in India and marketed it in India. After one year, we had to withdraw the productfromthe market. We had no sales. No doctor would accept it.* Despite the billions that they spend on R&D every year, the multinational drug companies' products are rarely scientific breakthroughs, Hamied alleges. There are two types of pharmaceutical research, he maintains: fundamental research and mo 20
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AZT, invented in 1964, which somehow or the other has a patent until 2017, a 53-year monopoly! Is this what patenting is all about?" he asks. Hamied contests that he is against patents for drug discoveries. But he favors a global system of compulsory licensing under which the patent holder would be paid royalties for a discovery He cites as an example Canada's abandoned pharmaceu tical law under which the sales of generic drugs still protected by patents were al lowed as long as a 4% royalty was paid to the patent holder. Until its demise, the Canadian law was aggressively criticized INTRODUCING A NEW drug on the mar by the U.S. government and international ket nowadays costs as much as $800 mil pharmaceutical companies. Because Cipla is one ofthe largest gener lion (C&EN,Jan. 28, page 34), but Hamied claims that most ofdrug companies' R&D ic drug companies in India, it is easy to la expenses go into ways to extend the patent bel Hamied's arguments as self-serving. Tfet ed life of their products. Hamied questions in person Hamied comes across as a con why the antidepressant paroxetine, which tent individual with few ambitions unful filled. Andfinancially,Hamied's real estate holdings alone—in the center of Mumbai where land prices are among the world's highest—suffice to qualify him as a very wealthy individual. His passion for chemistry is also obvi ous. Without prompting, he proudly pulls out a prized notebookfilledwith chemi cal formulas that he collects partly as a hob by and partly as potential new products that Cipla could synthesize. Despite all the sympathy Hamied has attracted from nongovernment organiza tions and even the United Nations, he is now a lone wolf among the heads of large Indian drug companies in opposing India's intention to accept the world's patent law system in 2005. The way other executives see it, India's R&D capabilities have vastly improved dur ing the past 30 years, and patents provide a GlaxoSmithKline sells as Paxil, is protect promising way to leverage the country's hu ed by 240 patents. "Is that really what we man resources into profit. Leading Indian are looking for when only about four or pharmaceutical companies foresee earning five patents are really necessary?" he asks. vast fortunes through successful ties with Hamied says the big drug companies large multinational drug companies. At Dr. Redd/s, one of India's most in use these huge patent estates to create "monopolies." As an example, he cites the novative pharmaceutical companies, Chief anti-AIDS drug zidovudine (AZT), which Executive Officer G. V. Prasad says there was originally synthesized in 1964 by the is absolutely no doubt that India will adopt Barbara Ann Karmanos Cancer Research the international patent regime in 2005. Institute, Detroit. Dr. Redd/s, he says, has made all its busi 'The person who invented it is not mar ness plans on this assumption. keting it," Hamied says. "It is being mar With such views prevalent, the debate keted by a commercial company that has on patents will likely involve the discredit patents on this until 2005 as a single enti of Cipla and other holdouts. A showdown ty." Furthermore, patent protection on will come after 2005, Hamied says, when AZT will extend at least until 2017 be Cipla will have to fight court battles for cause GlaxoSmithKline has also patented the first time in its history But the final the combination of AZT with the anti- stages will unravel slowly Court cases in retroviral agent larnivudine. "Here is a drug, India take decades to complete. • lecular manipulation. The first type is ex pensive and tends to be conducted by gov ernment labs and universities. "They are the ones who really do the conceptual thinking," he says. The pharmaceutical companies mostly perform molecular manipulation. 'The cost of research in molecular manipulation is a fragment ofwhat it costs conceptually," he says. "%u take thefirstβ-blocker, propanolol—the others are all me-toos. Atenolol, metoprolol, carvedilol, they are all molec ular manipulations; they don't cost that much."
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