The Human Care Company

The Human Care Company

Pharmaceutical companies throughout the world make medicines. There is competition among them because it is a business. Some are small, some big, some are global, but all are in the business of healthcare. Among these, there is one company which focuses on ‘human care’ but the nature of business is the same, that of making medicines. An Indian company, it stands tall among the rest. It functions in its own way. It has created history.

DR. Y K Hamied, Chairman
DR. Y K Hamied, Chairman

This is the story of Cipla, a company which from its inception has made fundamental contributions to enabling access to medicine to those who most need it. It is a company which started small in India but today stands tall in the world, and has helped India become known as “the pharma capital of the world”.

In the words of Cipla Chairman Dr Yusuf Khwaja Hamied, “For more than 75 years, we have made medicines and history.” Recounting that story, Dr Hamied tells how, time and again, Cipla incurred the wrath of companies across the globe and even some of its Indian competitors, for taking a stand against monopoly and profiteering. Dr Y K Hamied has been called ‘a pirate’ and ‘the Robin Hood of pharma’, but this has not deterred him in his mission to create medicines which safeguard the lives and livelihood of millions of patients.

Born in the spirit of independence
The year 1935.

India, then ruled by the British, was totally dependent on imported medicines which were not readily available, and when available, not affordable.

This led an Indian scientist, Dr Khwaja Abdul Hamied, to set up a company named The Chemical, Industrial & Pharmaceutical Laboratories (Cipla) to make medicines with a vision to make India self-dependent. But the company faced a lot of difficulties and incurred losses.

Mahatma Gandhi and Dr. K A Hamied, Founder
Mahatma Gandhi and Dr. K A Hamied, Founder

In 1939, Mahatma Gandhi met Dr Hamied and asked him to supply medicines to the British for World War 2, as Britain had promised India her independence in return for cooperation. This resulted in Cipla supplying medicines for trauma, and for malaria and other diseases; and this initiative helped the company to find its feet. India won her independence but the company faced problems – it could not manufacture products that were needed. The 1950s and ‘60s were tough times for Cipla because archaic patent laws blocked Indian companies from manufacturing Active Pharmaceutical Ingredients (APIs or ‘bulk drugs’) and formulations.

It was in 1960 that Dr Hamied’s son, Dr Yusuf Hamied finished his studies in Cambridge with a doctorate in chemistry and joined the company. The turnover at the time was just under Rs 50 lakhs. Even then, the company invested in the latest books and journals. Reading these, and frustrated by not being able to manufacture the new drugs available abroad, Dr Y K Hamied realized he would have to overcome the restrictions imposed by the patent laws which were a legacy of the British. In 1961, he and other like-minded individuals started the Indian Drug Manufacturers Association (IDMA) to press for change.

The breakthrough came with the new Indian Patents Act (1970), passed in 1972, which allowed Indian companies to synthesize any molecule as long as they used processes that were different from the originator’s process. The growth of the Indian pharmaceutical industry took off from 1972 because Cipla opened the floodgates for the Indian pharma industry to bring in new drugs that were available overseas but not in India, and sell them at affordable prices. Cipla itself introduced around 40 products in India for the first time.

Dr Yusuf Khwaja Hamied on Cipla’s journey
Goa Unit
Goa Unit

In 1983-84, the Cipla factory at Vikhroli (set up in 1960) was the first factory in India to get US FDA approval for manufacture of APIs (‘bulk drugs’) and this opened up new lines of export business. Dr Y K Hamied practiced what he calls ‘peer benevolence’, the antithesis of monopoly, by advising other Indian manufacturers to bring their plants up to international standard. This led other Indian companies to venture into manufacturing for exports, and today India is acknowledged as “the pharma capital of the world”

Under Dr Y K Hamied, the company climbed step by step towards success. More factories were set up to meet the demand — Bangalore (1972); Patalganga (1984); Kurkumbh (1994); Goa (2000); Baddi (2001); Sikkim (2008); Indore (2010). Today Cipla has over 40 manufacturing units across the country, approved by international regulatory authorities. In 1972, Cipla was ranked 56th in the Indian pharmaceutical industry. In 2004, Cipla became the leading pharma company in India. Today Cipla manufactures over 1,200 products in 80 therapies, exports to over 170 countries, and has a turnover of over Rs 7,000 crores (US$ 1.4 billion).

Indore Unit
Indore Unit
The Cipla Revolution in HIV/AIDS – 2001

The world came to know of HIV/AIDS in the 1980s. The disease spread like wildfire. The medicines made by the multinational companies were exorbitantly priced. Millions of people could not afford the cost of the medicine and died. The medicine cost between $10000 to 15000 per person annually.

Cipla shook the world by offering Triomune, a cocktail of three antiretroviral drugs in a single tablet to be taken twice a day, at a cost of less than a dollar a day. For millions of patients, this must have seemed like nothing less than divine intervention. Dr Y K Hamied with his characteristic calm rationality, put the issues of access and cost in the right context when he said, “We are being humanitarian. But we are not doing charity. We are not making money, but we are not going to lose money either.” Every company making HIV drugs subsequently dropped its prices.

And the world finally woke up to the issue of access to medicine as a fundamental human right. Today, more than 50% of the antiretroviral drugs keeping HIV-positive patients alive around the world are from India.

HIV/AIDS is just one example of Cipla’s humanitarian response to health crises. Another is when bird flu threatened to become a pandemic in 2005. The multinational which manufactured oseltamivir, the drug required to counter the disease, could not manufacture enough to meet the demand, but Cipla brought out the drug within three months.

The Second Cipla Revolution, in Cancer – 2012
Cipla again becomes the talk of the world

Cipla rocked the world again by slashing the prices of six cancer drugs by up to 76%. Dr Y K Hamied has been campaigning passionately for the Indian government to allow use of the Compulsory Licensing facility permitted under WTO rules. This allows companies to make some of the existing life-saving drugs to sell in countries where the originator’s prices are exorbitant.

In March 2012, the government granted such a license to an Indian company, Natco Pharma, to make a generic version of Bayer’s sorafenib, a drug for liver and kidney cancer. Bayer’s product costs Rs 2,80,000 (nearly Rs 3 lakh) per patient per month. Natco offered it for Rs 8,880.

Cipla countered with a price of Rs 6,840, lower even than that of Natco. Bayer promptly filed a suit against Cipla on the basis of violation of intellectual property rights. Unfazed by the criticism, Dr Hamied says, “Of the world’s top-selling drugs, the majority of them are marketed by companies who did not invent them … I am not against multinationals, I am against monopoly.”

According to him, 95% of the multinationals’ profits are made in the markets of Europe, America and Australia. He is not after them in their domain. In his words,” First, I want what is best for my country; and second, what is best for the developing countries.”

“We have to decide our own destiny”

An alumnus of Cathedral and John Connon school, Bombay, Dr Hamied holds a Ph.D in chemistry from Christ’s College, Cambridge.

Dr. Y K Hamied, Chairman
Dr. Y K Hamied, Chairman

Dr Hamied has set an example of running a healthcare business, It is not about profit alone; it is equally about social responsibility. A Gandhian in his vision and mission, he paved the way for the growth of Indian pharma companies, many of which have gone global.

Dr Y K Hamied was awarded the Padma Bhushan in 2005, recognized as ‘Conscious Capitalist’ at the Forbes India Leadership Awards 2012, awarded the CNN-IBN Indian of the Year in 2012, and the Business Standard Lifetime Achievement Award in 2013. He wears these honors lightly, his attention focused on the huge challenges that lie ahead for India. “The Indian government agreed to join WTO, and they agreed to change our patent laws in 2005 to re-introduce product patents. We have gone back to the pre-1972 era of encouraging monopoly. Why should India’s destiny be decided in Washington, London or Paris? We should decide what is best for India. After all, we are a country of 1.3 billion and likely to be 1.65 billion by the year 2016. We have to decide our own destiny.”

In the Media

Dr Hamied has been featured as a guiding force of India’s pharmaceutical sector in The New York Times, Time magazine, The Guardian, Le Monde, The Economist, the Financial Times, The Times (London), Corriere della Sera, Der Spiegel, Wired and numerous other leading publications, as well as on television on ABC News, the BBC, CNN, and CBS 60 Minutes.

Cipla’s achievements
  • World’s first anti-AIDS triple drug cocktail in a single tablet (Triomune)
  • World’s first oral iron chelator for thalassaemia (Kelfer)
  • India’s leading manufacturer of respiratory products, with the world’s widest range of inhaled drugs, devices and dosage forms, and the world’s 3rd largest manufacturer of pMDIs
  • World’s first combination of 2 long-acting bronchodilator inhaled drugs for COPD (Duova)
  • World’s first combination of inhaled corticosteroid and long-acting bronchodilator in a breath-actuated device (Foracort Autohaler)
  • Worlds first small volume anti-static transparent spacer device for asthma and COPD (Zerostat-VT Spacer)
  • Apart from pharmaceuticals for human diseases, Cipla is also India’s largest veterinary pharmaceutical exporter,and the first-ever Indian company to supply animal health products to many export markets.
Maxiflo 250
Maxiflo 250
Inhaler
Inhaler

 

Palliative care for cancer
Palliative care for cancer

The Cipla Palliative Care and Training Centre,

Established in Pune in 1997, is one of the very few centres in India offering world-standard palliative care to cancer patients and training in palliative care medicine for medical professionals.

 

 

 

Chest Research Foundation
Chest Research Foundation

Chest Research Foundation,

Founded in Pune in 2002, is an autonomous research and educational institution in the field of respiratory diseases; it has won international accolades for the quality and significance of its research projects

 

Honours

Among the honours that Cipla has won are the Dun & Bradstreet American Express Corporate Award (2006); the Scrip Award for Best Company in An Emerging Market (2006); the International Trade Award for Outstanding Exports (2006); the most trusted pharmaceutical brand in The Brand Trust Report – India Study 2011; the Platinum Award from Pharmaceutical Export Promotion Council of India (Pharmexcil, 2012); and the Thomson Reuters Innovation Award (2012) recognizing Cipla’s contribution to innovation through R&D.

We abide by the laws of the land

LSW LifeScienceWorld’s Sankar Iyer had the privilege of meeting Dr Y K Hamied three days before he announced that he was stepping down from the position of joint MD at Cipla. Dr Y K Hamied spoke at length on various issues in the pharma industry. Here are excerpts in his own words:

Dr. Y K Hamied, Chairman
Dr. Y K Hamied, Chairman

“Even after Independence, and right up till the 1970s, the multinationals ruled the pharma industry with their high-priced drugs, and nobody was bothered. Then in the 1960s, we took up the fight and the laws of India changed, and we were successful in September 1972 when the Indian government passed a law allowing Indian companies to synthesize any molecule as long as they used processes that were different from the originator’s process. This, de facto, removed the earlier monopoly. We were never against innovation. What we were against then and even today is monopoly. When the government abolished product patents, it heralded the golden age for the indigenous industry. And in the next 30 years, we saw a total revolution in the healthcare system in India. The Indian companies were providing all the latest drugs and the multinationals said goodbye to India. So prices of drugs were under control. But then India agreed to join WTO, India agreed to change its patent laws in 2005 to re-introduce product patents, and de facto India agreed to go back to the pre-1972 era and re-introducing monopoly, and in fact foolishly back-dated the product patent applicability to 1995. Which is legally wrong. So 2005 onwards brought back the multinationals to India in a big way. Now that they are back in India, how obscene their prices are is not for me to judge.

“For a certain US FDA drug, the price in America is 24,000 dollars per person per year. My drug is also US FDA approved and I am selling it to Africa at 96 dollars per person per year. Where is 96 dollars and where is 24,000 dollars? At 96 dollars I can still afford a good existence. So the question arises: what and how does one set the costing and how does one set the pricing?

“What the answer will be depends on the scope, on the competition, and so many factors. But, de facto, if something costs a hundred rupees, you can’t sell it for a hundred thousand. But that is what is happening today. And therefore when it comes to pricing I have begged the government to have a pragmatic pricing policy. It means: just don’t bother about drugs that are 15 or 20 years old … forget the list of essential drugs … if I have got a headache, paracetamol is essential. So all drugs in the world are essential. It depends on what you are suffering from. I am totally against listing certain drugs as essential.

“We at Cipla do not create laws. We abide by the laws of the land.

“If you in a the healthcare business like Cipla then it is not only business … you are into changing lives. There has to be an emotional humanitarian approach. If you are in healthcare, you have an obligation.

“When the Indian government changed the patent law in 2005, it started the ball rolling … the impact of monopoly will really hit India after 2015. In my personal opinion, it has permitted genocide in healthcare.

“So what are the alternatives that they have? The Indian government is allowing multinationals to come to India to practice monopoly, and putting all Indian companies’ products under price control, but letting the multinationals go scot-free.

Let India decide its own destiny. Why is Indian’s destiny being decided in Washington, London or Paris? Education, primary education, healthcare, food, malnutrition, family planning, the language problem … there are a hundred things that we have to do. We should decide what is best for India. We are after all a country of 1.3 billion and likely to be 1.65 billion by the year 2016. We have to decide our own destiny.”

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