Wednesday, August 21, 2013

Analysis of Yusuf Hamied’s statement on obligatory licensing

"...I am in favour of obligatory licensing where we don't mind paying royalties to the patent holder but at least Indian companies should be able to manufacture and market essential drugs to make them more accessible in the Third World...

...There is big obsolescence in the drugs industry and new drugs are coming up all the time. But we Indians are impotent because we can't manufacture and market them...

...We don't want to encroach on the regulated developed world markets... Just leave the developing world to us so that we don't deprive millions and ensure access to affordable drugs" 

- Yusuf Hamied (Former MD and currently mentor of Cipla) said.

Statements are high on ideals. After all who can oppose obligatory licensing, for medicines in the name poor, without feeling an element of guilt?

Let’s see how far we can agree with Hamied.

Compulsory licensing

GOI have options (and exercised as well) to go for compulsory licensing in life saving drugs. This helps many Indian generic firms to manufacture those drugs and sell it (at cheap rates). Common man often see low prices; missing out the big picture of mammoth amounts invested by multinational firms in R & D. Out of a good number of formulas they tried, may a couple of them reach clinical trial. Lesser numbers will see light at end of the tunnel – reaching market.

This is a long drawn process – investing in research, affording costly failures, lengthy trails in animals, extensive clinical trials, approval process etc. Often it’s not the manufacturing expense which makes these drugs costly but accumulated investments over life cycle. For this invention, companies will get patent protection for next 20 years or so; once that period is over, others can produce those medicines. In other words, generic companies are experimenting with something which is already proved.

Why companies like Cipla are not investing heavily in fundamental R & D and apply for patents, just like Pfizer, J & J, Roche, GlaxoSmithKline, Sanofi, Abbott or Novartis? After all they are not improvised of funds.

Many of these medicines and ideas are coming straight from public institutions funded by public money. Why Cipla can't make substantial contributions (do they?) to public institutions - universities etc - and come up with new things; instead of solely concentrating on already established formulas?

Let’s take a look at his second point, "we Indians are impotent...".

We are not. Under favourable conditions, with enough funding and courage to fail, Indians too can invent new formulas or medicines. Traditional Indian medical system called Ayurveda is a case in point. Most, if not all, Ayurvedic combinations are invented by Indians. What about Ashtanga Sangraha, Ashtanga Hridayam Samhita, Ashtangahridaya, Charaka and Sushutasamhitas?

It’s a fact, we lost track in between. Apart from some names like Upendra Nath Brahmachari (who invented 'Urea Stibamine' for the treatment of Kala Azar - aka 'Visceral leishmaniasis' - way back in 1929), vaccine against rotavirus called RotaVac (recent one) we may not have much to claim in modern era. Are we really impotent by nature? or little encouragement, scarce funding, inability to digest failures, more interested in copying formulas etc made as impotent?

Leaving developing world to generic makers? 

Good idea. In short you concentrate and sell your medicines in US, EU, Japan and make money. We will sell the copies in rest of the world. Will we enter in to the generic markets of developed world? Yes, we will do that as well.

I am leaving two questions for you to answer,

I can understand if some governments are going for compulsory licensing for a number of critical life saving drugs. After all life is precious, no government can let the people die just because they can’t afford the medical bills. But is it ok for Cipla’s mentor to say that?

Will any one stop Cipla, if they are inventing a medicine for critical illness and market it at affordable prices?


This company is world's largest manufacturer of antiretroviral drugs. Around two fifth of HIV/AIDs patients may get the benefits of Cipla drugs at affordable cost. Cipla also have an important tablet, triomune - fixed dose combination of three Anti Retro Virals (Lamivudine, stavudine and Nevirapine) - to its portfolio.

It may not be possible for developed wold contries to manufacture this combination as patents for Lamivudine, stavudine and Nevirapine are with three different companies. Lamivudine by GlaxoSmithKline, stavudine - patent expired for this one in US in 2008, Nevirapine by Boehringer Ingelheim Pharmaceuticals.



1. Cipla Firsts - Cipla
2. Cipla chief calls for 'obligatory' drugs licenses - ET
3. Results of the ROTAVAC Rotavirus Vaccine Study in India - NIH

1 comment:

  1. Till some time back, FDI in pharmaceuticals was allowed 100% through automatic route. Over a time it proved flawed as giant MNC's entered Indian market only to buy the already established and globally competitive Indian companies. Take over of Ranbaxy is a classic example. These MNC's instead of investing in R&D here, they used Indian space only for clinical trials. There is also a threat of killing affordable generic competitors.
    Another glaring reason for this low expenditure in R&D is the separation of research institutions from universities. We often hear about the scientists at Harward or other foreign universities. But what about ours?
    Policy discourse of the Govt surely can make a difference. But our myopic rulers concentrate on entitlements rather than empowerment.