Y. K Hamied : Changing the Dialogue

Sep 30, 2011
By Pharmaceutical Executive


Y.K. Hamied
No industry leader is more closely associated with the goal of seeding the globe with low-cost generics than Cipla Chairman Y.K. Hamied. In doing so, he has sparked years of debate on the role that strong patent protection should play in the industry's overall business model. A true internationalist, his Mumbai-headquartered firm derives over 50 percent of its $1.2 billion in annual revenues from outside India, including exports of affordable AIDS and anti-malarial drugs to Africa. Now, the 75-year-old generics entrepreneur has a new mission: to build access to affordable cancer drugs for all, and never mind if Big Pharma has a patent on the drug.

Cipla's strategy to wrest a portion of the market for HIV anti-retrovirals is legendary, and he looks at the battle over pricing and patents for these vital medicines as his biggest "game changing" accomplishment. Cipla started commercial production of AZT in 1993 and marketed the 100-milligram capsule formulation at one-sixth of the then prevailing international price. In 1996, a breakthrough study showed that a cocktail of three anti-retroviral drugs was more effective in controlling and managing HIV. Hamied broke through the logjam of pricing and access and thus was born the world's first triple single drug cocktail, Triomune, which he offered to developing countries at a price of less than $1 per patient per day.

Hamied is still smarting over the Indian government's decision to comply with the WTO TRIPS Agreement and adopt a stronger domestic patent law. "In my opinion, one of the greatest predictable tragedies the world has witnessed started in India on December 26, 2004, with the ordinance amending the Indian Patents Act 1970. No right-thinking person can claim that there has been a dramatic improvement in the standard of living for the majority of Indians during the last three decades, certainly not to the extent of warranting a change in pharmaceutical patent laws. India cannot afford a monopoly on healthcare. What the government should do is go in for compulsory licensing of all-important, vital, and lifesaving drugs.

"I am not against the multinationals. I am against cartels. In 1972, when India had a process patent law, multinationals controlled 85 percent of the Indian pharma business. Today, Indian firms account for the same share. In 1947, pharma industry sales in India were around $2 million a year. Today, the Indian industry has a turnover exceeding $20 billion. The whole industry has grown, not just Cipla, though I have contributed towards this. But, what will happen by 2015? Because of the new Indian patent rules, the foreign multinationals will be back in control. Also, their evergreening of patents will ensure that the growth of the generic drug industry will be slowed down considerably."

Hamied notes there are several other things he did to help grow the industry. In the 1960s, there was little raw material manufacture in India. "That is something I started because my background was ideal in developing local capacity to produce active pharmaceutical ingredients (APIs). I pushed all the Indian companies to take on the multinationals and start producing APIs in-house, which was a revolutionary step at the time."

It follows that markets abroad are becoming much more attractive to Cipla and other Indian companies. "Our current vision is global," Hamied says.

"If the Indian government wants India to prosper, and the indigenous drug industry to make further inroads, it has to cooperate with the industry, because we now have many options. We cannot build a sustainable platform for growth under a strict price control regime. We also need a pragmatic compulsory licensing system. We are getting into a phase where multinationals are going to take over many of the pharma companies. It has already started with Piramal (acquired by Abbott) and Ranbaxy (acquired by Daiichi Sankyo). With products coming off patent during the next few years, essentially in the regulated mature markets, and with the economy in the developed world becoming sluggish, there will be a necessary shift in the attitude and workings of the multinationals toward using the emerging markets as their business model. Because of this, we intend to look at all workable options—strategic alliances, in-licensing of products, and marketing opportunities with international companies." – Amrita Ghaswalla