If you have an ACS member number, please enter it here so we can link this account to your membership. (optional)

ACS values your privacy. By submitting your information, you are gaining access to C&EN and subscribing to our weekly newsletter. We use the information you provide to make your reading experience better, and we will never sell your data to third party members.



Drug Patents

Indian drugmaker Cipla makes a persuasive case for royalties instead of exclusive patents

by Jean-François Tremblay
February 6, 2006 | A version of this story appeared in Volume 84, Issue 6

Too Expensive
Credit: Photo By Jean-Fran??ois Tremblay
Most Indians cannot afford drugs.
Credit: Photo By Jean-Fran??ois Tremblay
Most Indians cannot afford drugs.

Over the past four years, I've met with Yusuf K. Hamied, the controversial chairman and managing director of the Indian drug company Cipla, several times. After we had a long talk in December, my belief in the importance of protecting intellectual property (IP) started to waver-even as Hamied's views are increasingly marginalized in India.

My support for patents and copyright protection has always been instinctive. Without IP protection, what incentives would there be for individuals and companies to bring us the wonderful things they invent? From M&M's to Eminem, protection of intellectual property fuels innovation.

Strengthening IP protection last year appears to have done much good in India, which had removed pharmaceutical compound patent protection in 1970. The reversal has emboldened companies from developed countries to outsource work and has meant rapid growth at contract research outfits like Syngene and GVK Bio or at manufacturing service providers like Nicholas Piramal and Jubilant.

But this is not the India that Hamied looks at. Hamied is one of the country's richest men, but he is immensely preoccupied by the masses around the world that are not benefiting from the drugs that patent protection brings.

Pretty much alone among India's major pharmaceutical producers, Cipla favors a regime under which the innovator receives royalties from imitators, not an exclusive patent.

Hamied is fond of pointing to the market failures of pharmaceutical patent protection. Before 1970, many drugs available in developed countries could not be found in India. By contrast, ignoring drug patents-in India, anyway-improved drug availability.

Last year, at the start of the new patent regime, when Hamied asked an Indian government official about the plan for coping with a bird flu pandemic in India, he was told, "We will surrender." At the time, Roche had not begun to ship its Tamiflu flu treatment to India. The Swiss company has since authorized the Indian firm Hetero Drugs to produce Tamiflu for India, and the government has begun stockpiling it.

Another big market failure was, of course, the nontreatment of millions of Africans and Indians afflicted by the HIV virus. Cipla attracted attention in the late 1990s as the company that, controversially, launched a cocktail of three patent-protected AIDS drugs that treat patients for less than $1.00 per day. It was legal for Hamied to do so as India did not recognize pharmaceutical patents. Spurred by Hamied, other companies, including patent holders in wealthy nations, have since lowered prices for their medication in less developed markets.

"A new chemical entity [that is, a new drug] for me, is one that has just been made available to Indian patients," Hamied proclaims. A few months ago, Cipla was the first to launch in India the anti-HIV drug tenofovir disoproxil fumarate, under the trade name Tenvir. In other countries, the drug is known as Viread and is marketed by Gilead. Hamied contends that Gilead's patent on the drug is not valid in India.

One obvious objection to Hamied's views on pharmaceutical patents is that it just seems unfair. India is far from being all poor, just as the U.S. and Europe are not all rich. Without patent protection in India, rich Indians can buy cheap knockoffs of newly invented drugs without contributing to the cost of inventing and testing them.

Meanwhile, poor Americans and Europeans, burdened by the Western drug industry's R&D costs, struggle to pay for these drugs. Amar Lulla, Cipla's head of operations, retorts that rich Indians actually prefer to buy from foreign suppliers. "We're not taking anything away from them," he says of the big companies.

The problem with drugs in India is not that they're too cheap but that they're too expensive, Hamied says. "Do you realize that, even though in India drug prices are perhaps the cheapest in the world, only one-third of the population can afford pharmaceuticals?" he asks.

In recent months, Hamied has been watching closely as the bird flu threat becomes scarier. Whereas Western countries had shown great reluctance to violate pharmaceutical patents when it involved treating poor Africans with AIDS, they have threatened Roche faster than you can say Hamied with compulsory licensing of Tamiflu unless the company boosts supply.

But Hamied will not be at the forefront of the debate on drug access for the poor for many more years. At 70, he says he doesn't have the fire he once had. And it's not clear what will happen to Cipla and its unique corporate culture once Hamied steps down. He succeeded his father at the helm, but he has no children. For the past year, there have been rumors that Indian or foreign players are interested in buying Cipla, but Hamied says no such talks are taking place.

Hamied's campaign has gone mainstream, however. GlaxoSmithKline has made it a corporate priority to improve drug access in poor countries. Novartis has opened an institute in Singapore that seeks to invent drugs to treat tropical diseases. And AstraZeneca has opened a research center in Bangalore to develop new tuberculosis drugs.

Yet far more corporate research money goes into developing drugs for the more trivial diseases of the rich world. Hamied may be right in asserting that, with the way patents are protected today, drugs cannot reach those who need them most.



This article has been sent to the following recipient:

Chemistry matters. Join us to get the news you need.