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India firm shakes up cancer drug market with price cuts

Published Jun 17, 2012 08:02am


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This handout photograph released by Cipla Industries on May 31, 2012, shows Chairman of Indian pharmaceutical firm Cipla Yusuf Hamied as he poses for a portrait in New Delhi on March 10, 2010. – AFP

NEW DELHI: Indian pharmaceutical tycoon Yusuf Hamied revolutionised AIDS treatment more than a decade ago by supplying cut-price drugs to the world's poor - and now he wants to do the same for cancer.

Hamied, chairman of generic drugs giant Cipla, last month slashed the cost of three medicines to fight brain, kidney and lung cancer in India, making the drugs up to more than four times cheaper.

“I hope we'll cut prices of many more cancer drugs,” he told AFP, adding that he wants to supply the cheaper drugs to Africa and elsewhere.

“Reducing the price of cancer drugs is a humanitarian move.”

Hamied, 76, was pilloried by Western drug giants 11 years ago when he broke their monopoly by offering to supply life-saving triple therapy AIDS drug cocktails for under $1 a day - one-thirtieth the price of the multinationals.

The firms branded him an intellectual property thief while he accused them of being “global serial killers” whose high prices were costing the lives of AIDS patients.

“What he did was path-breaking. It has been very important in saving lives, and what he is doing with cancer drugs is the same,” said Leena Menghaney, a lawyer with humanitarian group Medecins sans Frontieres (Doctors Without Borders).

In 1972, India made only the process for making drugs patentable, not the drugs themselves.

This meant firms could “reverse-engineer” or change methods used to make medicines and sell them at up to one-fiftieth of US prices.

The legislation gave a huge leg-up to India's generics industry and gave the nation the nickname “the pharmacy to the Third World”.

But in 2005, India brought its law in line with World Trade Organization (WTO) rules recognising 20-year patents, pushing up the prices of newly launched drugs.

Cipla, India's fourth largest pharmaceutical company by sales, has been pressing the government to allow widespread use of “compulsory licences”, which are permitted under WTO rules.

The licences allow companies to make existing life-saving drugs to sell in countries where they are otherwise priced out of reach.

India's first such licence was granted in March to Natco Pharma to produce a generic version of Bayer's blockbuster kidney cancer drug Nexavar, cutting the price from 28,000 rupees ($500) for a monthly dose to 6,840 rupees.

Ranjit Shahani, who heads the Organisation of Pharmaceutical Producers of India, says widespread compulsory licensing will jeopardise investment in innovative pharmaceuticals.

Bayer has said it will launch a legal challenge to the compulsory licence, and global drugmakers have vowed to oppose the spread of such legislation.

Hamied denied that his latest move was simply an attempt to boost his share in the oncology drugs market, insisting business must be linked to “social responsibility”.

But he said like any other business his company, which has 23 cancer drugs, also wants higher sales.

“I owe it to my shareholders to be pragmatic,” he said.

Born in Lithuania to an Indian Muslim father and a Lithuanian Jewish mother, Hamied was two months old when his parents fled Europe in the 1930s under the threat of Nazi Germany.

He was raised in Mumbai and studied for a doctorate in chemistry at Cambridge University in Britain before joining Cipla, which was founded by his father.

“My father never forced me but chemistry was my best subject,” said Hamied, who became chairman of the company in 1989.

His bold step in offering cheap AIDS drugs turned out to be a smart business move.

Cipla is now the world's largest AIDS antiretroviral drugs supplier and the publicly-listed company is valued at nearly $5 billion, while business magazine Forbes puts Hamied's personal fortune at $1.75 billion.

But Hamied said poverty-racked India “can't afford to divide people into those who can afford life-saving drugs and those who can't”.

“It needs a pragmatic policy,” he said.

He believes the pharma giants should let emerging market drugmakers make copycat medicines in exchange for small royalties.

Some 95 per cent of Western firms' profits come from regulated developed markets like Japan, Europe, America, so the pharmaceutical giants “really won't lose out”, he said.

Even with the reduced price of generic drugs, such medicines are still beyond the reach of many of the world's poorest, conceded Hamied, who confesses he has his eye on his legacy.

“I want it to be said when I leave this world that 'he was not just a money-making machine,'” he said.


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Comments (58) Closed

Umesh Bhagwat Jun 17, 2012 11:40am
The price of medicines in India is so high that they are beyond the reach of the common man. Many poor patients die prematurely because of lack of medicines. Majority of the pharmaceutical companies are only interested in making profits rather than making affordable medicines. I am glad that a company like cipla has set an example for others to follow.
Yousuf Jun 17, 2012 11:04am
The chairmen of any company in Pakistan will give deliver a long lecture on the subject -corporate social responsibility-than a talk by Mr. Yusuf Hamied. We are the nation of chatter boxes. Looking for photo opportunities only
Mr. Vipul Thakore Jun 17, 2012 02:31pm
Pakistan should import medicines from Cipla and other Indian Pharma companies which would be far less expensive than imports from the Western companies. This will help people of Pakistan to save lives and foreign exchange. India has helped some Pakistani children with heart problems surgery etc. free of any medical costsand there is a standing offer to treat more such children in India without any medical charges.
Ahmed Jun 17, 2012 08:40pm
a real human being. I respect this gentleman.
cssingh Jun 17, 2012 10:02pm
poor mans friend
Pakind Jun 18, 2012 04:03am
Pakistanis can certainly do what we are doing in India. After all we were same people. The problem lies in Pakistan political and social system. One of the most disturbing thing I noticed is that some Pakistani do bring the religion in to everything when its not a religion issue. For example recently the Islamic leaders in Pakistan have declared polio vaccination as against Islam which is beyond my understanding.
ahmed j Jun 18, 2012 01:33pm
Charitable organisations in Pakistan like Shaukat Khanum Cancer hospital must team up together with Cipla to cut their expenses down so more charitable work be done for the poor masses. Mr Yusuf Hamied should be invited to visit Shaukat Khanum hospital. They have the same great cause.
mangesh sird Jun 18, 2012 03:53am
congrats Dr.saab ! I have followed all whatever you have done for the millions of poor patients in India. You have swam against the current of pharma giants ,who are only interested in looting...hats off to you . May your tribe multiply and benefit the mankind in years to come ! God bless you !
S. A. M. Jun 17, 2012 09:01pm
Mr. Vipul, Your suggestion is very conducive but the decision makers in Pakistan would first look for their sahre in the profit and only tehn they would finalize the deal. The poor people are not on their list of priorities.
ahmed Jun 18, 2012 01:25pm
When they meet, they meet as good human beings. Keep your formal royal protocol to yourself.
S. A. M. Jun 17, 2012 08:55pm
Dear Zia Shahab, Only a few months ago so many people died of fake drugs in Punjab. What happened to the culprits where the matter is what actions have been taken to prevent such incidents from happening again. No at least I do not know the answer. Salutes to the Indian Nation for bringing such heroes in the form of Dr. Hameid.
Shashank Jun 17, 2012 07:25pm
Three multi-billion medicine companies in India are owned by muslims - Cipla, Wokhardt and Himalaya. Wonder if they could have achieved the same had they migrated to Pakistan ?
Jabberwacky Jun 17, 2012 06:45pm
Proud to be an indian
Naser Jun 18, 2012 04:21pm
Pakistanis and their Indian apologists have a very consistent characteristic. Whenever something positive news comes out about the progress of Indian Muslims, they never admit that it is the Indian democratic system which has enabled all people to excel as juxtaposed to the Pakistani system in which minorities are barely allowed to survive. Whenever anything bad happens to minorities in India, these people start pillorying India and India. Come on be brave and accept that in India minorities are much better off than the minorities in Pakistan and this is because of India's innate philosophy and culture which accepts multiple paths to One Truth.
M.D.Bhasin Jun 18, 2012 12:41pm
He is not just a money-making machine indeed.
Anis Jun 17, 2012 03:22pm
We in Pakistan should invite these people to our universities, so our upcoming youth talent can understand the values.
Iftikhar Husain Jun 17, 2012 10:51am
It is a great achievement by Dr. Hameed I happen to know his family from Muslim University Aligarh that was in 50s. I have also met his father many times. He is a wonderful man who is doing so much to the humanity my salams to him if he sees this. I am so glad to read this thank you.
karur Jun 18, 2012 11:32pm
The West has had an unfair control over the manufacture and sale of drugs by introducing highly resptrictive patent laws. Cipla has shown that production of generic drugs can cut huge costs and people in the developing Countries can live in hope. Dr. Hamied is a noble man and he has done what Doctors are meant to do i.e help humanity. By challenging Western Pharmaceuticals, Indian drug firms are revolutionizing the entire Health scene in the Third World. Now, the West too is waking up to this opportunity for producing affordable healt care
Maran Jun 19, 2012 06:43pm
has there been any cost analysis of the risk reward ratio as far as financing of research is concerned? I am sure that the drug companies have taken out much more in profts than theri cost of research. Pl do not keep parroting out the old tired argument to justify profiteering by the drug multinationals.
alt_view Jun 19, 2012 03:17am
This is a simplistic view of a very complicated problem. It is true that healthcare cannot be for profit alone but it must be remembered that it is a business. The amount of money needed for development of new drugs is so huge that it is not possible to keep costs down. The generic drug market players like Cipla, play a role in reducing costs but they have lesser risks. When a pharma company develops a new molecule and then proceeds towards drug development it does not know whether it will succeed. Infact most attempts are failures, this is the reason the drugs appear overpriced. As Dr.Hamied has stated the regulated drug market in europe,us,japan etc does provide the pharma MNCs with some much needed support. What would be ideal is if we can come up with ways to reduce the costs of drug development and research. I think developing countries can play a role in bringing these costs down, instead of reverse engineering products from pharma MNCs. Companies like Reddy labs in my view were a step in the right direction but have not progressed as rapidly as we would have liked.
Krishna Jun 18, 2012 09:13pm
Dr Hameed and CIPLA never invented any drug. They are copying the medicine invented by the west. caring for humanity, Dr. hameed can spare some of his wealth (1.7 B $$) to poors. Actually he is eating others lunch. It costs hundreds of millions of dollars to develop new drug; and simply he is copying them and distributing to other countries. Is it fair? He may be like Robinhood, but then, Robinhood didn't make money for himself.
Syed Jun 18, 2012 08:58pm
this is how you contribute to the society on a bigger scope. well done Sir. Is anyone listening on this side of the border? anyone? (sound of silence)
Amit Jun 18, 2012 08:01pm
While I hate the patronizing, narcissistic and nationalistic comments that I often find my fellow Indians making on Dawn, a point to appreciate is the reason why this article by AFP on Dr. Yusuf Hamied has been featured in DAWN. If it is just because he has made drugs affordable to for the many millions/billions of 3rd world citizens - then surely the comments are misplaced/uncalled for and should rightly be criticized. But if it is because it shows the abilities/potential of a particular group, then the point made is valid. As many have rightly pointed out, it is not the race or religion but the social environment that is responsible for this very able man's success. By the way I hope the readers do appreciate that the money earned by the manufacturers of generic medicines in India rarely goes into R&D of NEW drugs.
Krishna Jun 18, 2012 07:23pm
Everyone is appreciating Dr. Hameid. But I have a question for him: Why he should not part some of his 1.7 billion to help poor people in the name of humanity?? In reality, CIPLA is not inventing any new drugs; they are invented in US or Europe. we are simply coping them and selling them cheaper bcz we don't have R & D costs which runs in hundreds of millions. In fact he is eating others lunch! He is like Robinhood, but Robinhood didn't amass wealth like Dr. Hameid.
Adam Jun 20, 2012 06:40pm
True, seen it first hand
Ajamal Jun 17, 2012 10:40am
The world needs many such personalities in every sphere of life.
Zia Shahab Jun 17, 2012 10:34am
Great work Mr. Hamied!! I am sure pharmaceutical companies in other developing countries will follow this endeavor; especially countries such as our beloved Pakistan where real social issues are brushed aside...will someone please correct me if I am wrong, but we seemed to have joined the band wagon of pharmaceutical MNCs minting profits of upto 400% on certain drugs...
Sam Jun 18, 2012 03:17pm
Hi Fellow Redditor! How you doing?
owais Jun 18, 2012 02:42pm
The comments were really nice and readable until yours my friend. Heard of Abdus Sattar Edhi ever?
Srini Jun 18, 2012 02:32pm
Mr. Umesh, I have been working in the Pharma industry for about 18 years now. I travel to a lot of countries and I work closely with the prices of the medicine. I can confidently say that you have no clue about drug prices in the world. India has the lowest prices for most, if not all medication. The pharma sales people in Philippines, Thailand, Indonesia (for examples) all complain, because their government (for tender sales) is forcing them to match Indian prices which is substantially lower compared to their local market prices. Indian Pharma companies are by far the least profit oriented in the world, and they have become a game changer in the world now. For example, an Indian AIDS cocktain costs about $10/year, compared to $400/year for drugs manufactured by US and European firms. 80% of worlds AIDS medication is supplied by India, if you don't know this already (which I suspect you don't). Anyway, before wailing and complaining that everything about India is bad, please do some research and get some knowledge about what you are talking about.
Sam T Jun 18, 2012 02:51am
Bravo, Bravo and Bravo Mr. Hamied. My compliments to you and your company.
Naim Jun 18, 2012 04:09am
You spelled his name wrong for a person who knows him so well!!
vipul Jun 18, 2012 02:20pm
very good.
sudhir Das Jun 18, 2012 02:21pm
Why no Indian newspaper highlighted such a great story of a great human being? I am surprised that most of the positive things about India get published in the Dawn instead of our so called largest circulated English print media which most of the time remain obsessed with politicians and Bollywood. Hats of to Dawn.
Indian Redditor Jun 18, 2012 04:48am
I'm specifically downvoting comment this because not everything needs to be a comment about religion and borders. Hamied wants to break down financial roadblocks for those who can't afford it- and to coerce other companies to do the same. So why mire yourself in petty matters such as whether the companies would've done well in Pakistan? Stay focused on the story at hand- a man is taking an action bigger than himself. And good news like that is rare to find - and should be commended.
Jay Raman Jun 18, 2012 03:37pm
Excellent idea which will help millions of the poor in Pakistan. But will the establishment allow it?
Imtiaz Faruqui Jun 18, 2012 05:17pm
He is a Noble ,person in the true sense, its a shame for western Pharma giants , all they care is their profits and not human lives. Shame on them.
prafulla shrivastva Jun 18, 2012 03:43pm
Why not Pakistan is also taking profit of great person like Dr.Haimde. I have seen him from last 25 years, how he has grown from a small company to a big giant Cipla.
karunakar Jun 18, 2012 06:45am
Dr. Hamied is a great person, to run a successful business is one of the toughest challenges in India where all the chips areloaded against you. and he has done it for years and years . it is because of these indian companies that medicines for aids were available at reasonable prices to Africa. Cutting costs of cancer drugs is another father in his cap. I have noticed that medicines of Cipla were always priced lowre than that of multinationals like novartis, pfizer etc. Great work.
Arnaw Jun 18, 2012 07:42am
Anyone can do anything that anyone else does. Bringing Indians and Pakistanis into this was uncalled for. Dr Hamied did something not just thinking of Indians, but thinking of poor people everywhere. He would have done the same if he was in Pakistan, or in Lithuania. Good people and bad people are everywhere. It's not a question of race or demography but of goodwill towards humanity
Arindam Jun 18, 2012 04:33pm
This is an unnecessary partisan comment that has nothing to do with Dr. Hameed is doing - the underlying humanity of his actions is what is important and nothing else. I am sure he would have done just as well if he was running his buisness from pakistan.
hashmi Jun 18, 2012 03:27pm
It makes me feel that greatness has no boundries , such great human beings can exist any where in this world.
tom Jun 18, 2012 08:21am
This is an incredible thing to do. Props to this company, more of the pharma industry needs leaders like this.
ashok Jun 18, 2012 03:21pm
Usually men with money are miser, but I salute this gentleman,may God bless him. Ashok
Ray Jun 18, 2012 03:09pm
Big Pharma equals even bigger profits at the cost of lives. They should be tried in the Hague for Crimes Against Humanity.
alone Jun 18, 2012 08:49am
keep it up my friend. There are no limits to how much money one can have but still one can not eat drink or wear that money. We are proud of you as humans
Josh McNeill Jun 18, 2012 05:56pm
Don't forget reality. Developing drugs is expensive, hence why they charge so much for them. The actual manufacturing (after they're already developed) must be cheap as Hamied has shown but you can't just take development out of the equation. Hamied can sell these drugs for so little because he doesn't built an enormous amount of debt developing them. It's like black market entrepreneurs burning copies of blockbuster movies and selling them for pennies; they can do this because they don't have the development cost hanging over their head. Like it or not, pharmaceutical companies need to make enough money to pay back their debts and keep investors interested or they won't be able to continue developing needed drugs.
Ganesh Krishnan Jun 18, 2012 09:02am
It can be spelt either way. Most people prefer to spell it as "Hameed"
Asim Sultan Jun 18, 2012 09:10am
Great thinking... World need such great people who think about a common man. May Allah give him every opportunity and strength to serve the poor people. Ameen
Tariq Ali Khan Jun 18, 2012 09:13am
What to say and how to say words are short for Hamid. I hope all pharmaceuticals will follow him and will become more socially responsible. Imran Khan and Hamid are people which the poor and destitute of third world deadly needs today and will need tomorrow. His legacy should continue. The social class must come forward and work shoulder to shoulder with Hamid so that he achieve his legacy.
Rajan Jun 19, 2012 12:52pm
Yes. I do agree with you.
MKB Jun 19, 2012 04:38am
Yusuf Hamied has done tremendous contribution towards reducing the cost of AIDS drug against many challenges he faced from Multinational drug lord. His Company Cipla is a very popular name in Indian pharmaceutical Industry and enjoys immense respect from the public. Another Indian, a researcher at Stanford University USA, Dr. Bikul Das a very humble man from Gauhati, has discovered the root cause of Cancer. He already found the reason " why should a cancer cell, towards the end of its evolution to become an aggressive cell exhibit features of embryonic stem cells? After all, embryonic stem cell creates life, whereas aggressive cancer cell kills life ?" His this understanding make him to understand "I am focusing on developing an appropriate experimental system to study the stable vs unstable state of stemness state" So days are not to far when we can found a suitable drug/ therapy to eradicate cancer. We are proud of you , Dr. Bikul Das & Mr. Yusuf Hamied
MKB Jun 19, 2012 05:08am
Yusuf Hamied has done tremendous contribution towards reducing cost of AIDS drug against many challenges he faced from Multinational drug lord. His Company Cipla is a very popular name in Indian pharmaceutical Industry and enjoys immense respect from the public. Another Indian, a researcher at Stanford University USA, Dr. Bikul Das a very humble man from Gauhati, has discovered the root cause of Cancer. He already found the reason " why should a cancer cell, towards the end of its evolution to become an aggressive cell exhibit features of embryonic stem cells? After all, embryonic stem cell creates life, whereas aggressive cancer cell kills life ?" His this understanding make him to understand "I am focusing on developing an appropriate experimental system to study the stable vs unstable state of stemness state" So days are not to far when we can found a suitable drug/ therapy to eradicate cancer. We are proud of you , Dr. Bikul Das & Mr. Yusuf Hamied
Jaudat Jun 19, 2012 07:48am
Agreed with you.
Indian friend Jun 19, 2012 09:59pm
Agree with you 100%. People don't know how expensive drugs are out side India. A Pack of 18 caps of Amoxicillin costs $18 - $32. Ibuprofen 200mg costs $22 for 90 tabs. What should happen is Indian Pharma should start joint ventures with Pakistan Pharma companies so that this Patent laws would not apply to manufacture generic drugs at cheaper prices. This benefits both the countries.
karur Jun 19, 2012 11:17pm
Josh, you have a fair point. But, once a Drug Company has recovered its development costs, there is no reason to charge such high prices. Please remember that drugs are used by people that are already suffering. Now, lack of affordability in developing nations, kills a suffering patient. Surely, this is not what medicines are meant to do! Dr. Hamied has shown that a) drugs can be produced cheaper and b) there is need to care for the under-previledged
Eppy Jun 20, 2012 02:17am
Some of the discussion here is interesting - especially the praises levied on Hamied. Cipla is a publicly traded business. There are a board of directors and shareholders who make a business decision as to whether enter the cancer market after evaluating the legalities, profit margin etc. It appears from the discussion that Hamied is doing this at a loss - No Sir! They see a profit margin, a thick one, hence the decision. Let Cipla invest millions (in dollars) in discovering a new drug, and then sell the drug cheap. Not saying that cheap drugs are unimportant; but this is a business of bringing patent-expired drugs to the market. If not Cipla, some other company will. And that is the whole idea of current patenting laws - boost innovation and competition. Nobody's a saint here.
suneel Kumar Jun 20, 2012 08:10am
world power is shifting to asia its power of asia market , i am sufi by my believe so do not confine human in any religion , cost limits , when all u come to understand true philosophy of religion you love not only human being but every creature crated by nature is so precious and vitally important . so love every one respect every one coz man is reflection of God.thanks mr. Hameed so this human cause i salute u.