How Yusuf Hamied’s Cipla developed an affordable generic medicine for Aids

Yusuf Hamied is the chairperson of Cipla, an Indian multinational generic pharmaceuticals company founded in 1935 by his father, Khwaja Abdul Hamied. Yusuf Hamied joined the family business in 1960 and became prominent for his role in defying Western multinational pharmaceutical companies in order to provide generic AIDS treatments and other drugs to treat poor people in the developing world. In 2005, he received the Padma Bhushan from the Indian government and in 2012 was named “CNN-IBN Indian of the Year in Business”. [He was...i]nterviewed by Tarun Khanna in Mumbai on 29 April 2013.

There are two celebrated actions taken by you that I would love for you to reflect on. One is azidothymidine (AZT) and the cocktail drugs, and the second is the antiviral in response to the avian flu and the stockpiling issue.
First, there was this intellectual property (IP) thing in 1995, and we did really well. In 1991, we were working very closely with the laboratories of the Council of Scientific and Industrial Research.

My friend at the National Chemical Laboratory was a gentleman called Dr Rama Rao; he assisted us with the development of many raw materials. He is still very active today, even at the age of seventy-eight, and I am still in touch with him. One day in 1991, Rama Rao came to me and said, “Yusuf, I’ve developed a synthesis for AZT, zidovudine, and the government has allowed me to collect the starting material to make it, beta thymidine, which can be imported without duty in India. And this drug is for AIDS.”

Now how widely known was the AIDS epidemic?
At that time, 1991, it was zero.

But Rama Rao was on top of it?
Rama Rao had come to me with that. So he and I went to the Indian Council of Medical Research (ICMR) to meet Dr SP Tripathi (the ICMR director-general from 1991 to 1994). He said to us, “Yes, India requires AZT, and Dr Hamied you are the only person we can look to, who has the capability of making it.”

What about the rest of the industry?
They were all coming up.

But they couldn’t have made that?
It’s not a question of making it; it’s a question of who has the idea to do it? If Rama Rao wouldn’t have come to me with this in 1991, I might not have taken it up. To cut a long story short, we took it up. In 1993, commercially we could make AZT. We put it on the market in the form of 100 mg capsules at the price of $2 (Rs 63) a day. The international price at that time was $12 (Rs 376) a day. Now $2 (Rs 63) a day at that time meant, I think, Rs 60 a day. So in a month, it meant Rs 1800. Nobody could afford it. So for the first six months, the sales were zero. I went back to Dr Tripathi at ICMR. I said, “Doctor, I am sitting on 2,00,000 capsules of AZT, unsold, what should I do? Why doesn’t the government buy and distribute it as they think best?”

He replied, “Dr Hamied, we have no money for treatment. We only have money to detect and prevent.” So in 1993, we shut down the manufacturing of AZT and got out of the AIDS drug business. But as a scientist or whatever you may call it, I kept abreast of what was going on in the area of AIDS, reading medical journals and various scientific publications. In 1996-97, I came across an article in one of the medical journals called HAART, and this article said that a combination of three drugs controlled HIV.

This was the cocktail. So my enthusiasm got revived and we went into it again. By the year 2000, we could get all the three ingredients for the cocktail. The timing was crucial because in the year 2000, almost 8000 people were dying per day in Africa. The treatment cost was $12,000 (Rs 5.5 lakh) per patient per year, the reason being that the three ingredients were all made by different companies. The daily dosage ran from twelve to fifteen tablets per day.

So compliance was poor?
Yes, compliance was poor. In the year 2000, in July, the first HIV conference was held in Durban, and you will see a lot of this in the movie directed by Jamie Love, Fire in the Blood, the true story of HIV/AIDS, of what actually happened in the year 2000. At that conference in Durban, July 2000, our friend, Justice Edwin Cameron, he was the chief justice in South Africa; he stood up and said, “I am alive (because he was HIV positive). I am alive today because I can afford $400 (Rs 18,000) a month.” We had a meeting in London, some activists and myself on 12 August 2000, to discuss what can be done about HIV treatment.

To cut a long story short, I was invited to speak at the European Union on 28 September 2000. I was given only three minutes to say what I had to say. At that meeting, there were 200 people. There were thirty health ministers from Africa. There were five prime ministers of various countries at this meeting. It was a closed-door meeting. The multinationals objected to an Indian being asked to speak at the European Union...This is the European Union...why should a non- European speak?

The head of the European Union turned around and told them that “look, HIV/AIDS is not a European disease only”. Therefore, I was invited to speak. I said three things: one, we are making a cocktail of drugs, and we will give it at $800 (Rs 36,500 in 2000) per patient per year, as opposed to $12,000 (Rs 5.5 lakh) per year; two, Cipla will give technical know-how to any government of a developing country that wishes to produce its own HIV drugs; and three, we will give the drug that stops the transmission of HIV from mother to child totally free.

That’s a different drug?
One of those three, if the mother takes a dose at the time of labour, and the child takes a dose within seventy-two hours of birth, lo and behold, the child by and large is HIV free. This was on 28 September 2000. I was so disappointed, there were no takers and nobody wrote to us. It’s a mystery to me. And then what happened, I was still in touch with some of the people who had come for my original meeting in August 2000, and one of them was a gentleman called Jamie Love. Jamie Love still runs an NGO in Washington, and he wrote to us in February 2001, the exact date I know, 6 February 2001, “Doctor, can you somehow give the cocktail at a dollar (Rs 48) a day?” So we did our homework in Cipla on 6 February 2001. I remember the date distinctly and it was very difficult to do at that time.

Now at $800 (Rs 38,000 in 2001) a year you were breaking even?
Yes. Fine. But not at $300 (Rs 14,000). So we said we are making so many drugs if we lose on one or two drugs, what difference does it make? It’s a cause; it was a humanitarian approach. But we said that instead of giving it freely, we will give it selectively. Therefore, we then approached Médecins Sans Frontières (MSF or Doctors Without Borders). At that time, in 2001, they were the biggest and the best NGO for HIV/AIDS; they would receive the Nobel Prize a few years later.

On 6 February 2001, we wrote a fax or a telex or whatever, there was no email at that time. We wrote to MSF and offered them the cocktail drugs, two tablets a day, morning and night, at $350 (Rs 17,000). On 6 February, that night, I was at a dinner party in Bombay. We had sent them a fax but there was no response to it. Then at 12 o’clock in the night my mobile phone rings:

“Donald McNeil here.”

“Yes, Donald. What can I do for you?”

Now Donald McNeil, a reporter from The New York Times, had been to India in December 2000. And then he had written a feature article in December 2000; he had interviewed me, so I knew him.

“Doctor, can I speak to you?”

“Yes, Donald what can I do for you?”

It was late at night.

“Have you offered the AIDS cocktail to MSF at $350?”

I said, “Yes, I have.”

“Can I ask you a few questions?”

I said, “Donald, I know you so well, go ahead.”

So he asked me a few questions. And then he said, “Dr Hamied, your life will not be the same after tomorrow.”

I laughed and I put the phone down, and subsequently I met him quite often. I meet him every time I am in New York, and I remind him of that. I say, “Donald, you’ve changed my life and I don’t know whether it’s been for the good or the bad.”

So on the front page of The New York Times, 7 February 2001, was this: “Indian Company Offers AIDS Cocktail at a Dollar a Day”. And lo and behold, my life has not been the same since then. That’s all I can say.

That offer was taken up. Subsequently, today [2013] the drug costs below $100 (Rs 6000) a year. The drug that we gave at $350 (Rs 17,000) is not used any more but similar types of cocktails are being sold today at $60 (Rs 3600) per patient per year.

That’s because the science has developed?
Science has developed. New combinations have come up, etc.

And the processes have improved?
The processes have improved. India today produces, in finished form, 92 per cent, in volume, of all the HIV drugs in the world. In value, this is equal to $1 billion (Rs 6000 crore). The remaining 8 per cent is equal to $16 billion (Rs 96,000 crore) in value. So that’s been a big change. In fact, the world’s number one AIDS drug today, by an American company, is called Atripla. In America, the price is $24,000 (Rs 14.5 lakh) per patient per year. You know at what price I am giving it to Africa? At $96 (Rs 5800) per patient per year. Now where is $96 (Rs 5800), my dear friend, and where is $24,000 (Rs 14.5 lakh)?

Now just to go back to your position on intellectual property which is a foundation of much of this. Our position is that even $96 (Rs 5800) is a fair thing to do because it more than compensates the makers of this wonder drug for whatever effort they or the society has put into making it? Is that what you are saying?
If you look at the cocktail by Gilead, it has been sold today for $24,000 (Rs 14.5 lakh), and I am not discrediting them. It contains three components. The first is tenofovir. Tenofovir was originally invented in 1992. They got it patented post-1995. We took them to court in India, and we won our case. The tenofovir patent was not granted in India. The second ingredient, emtricitabine, pre-1995, and the third ingredient efavirenz, pre-1995, were also not patented in India. So the three ingredients were not patented in India. Hence, whatever I am doing in India is totally legal.

In spite of the fact that I mentioned the ten-year transition period, all the three ingredients are pre-1995. Now what is likely to happen is that, as resistance to drugs goes on, some of the newer anti-AIDS drugs, the major ones that are being developed and may revolutionise the HIV treatment in 2014-15, I won’t be able to market them.

Because they are now under patent in India?
Because they are under patent in India. Before 2005, under the rules of the 1970 Patent Act, I could have marketed these products cheaply. However, after 2005 India committed to following global IP rules. So essentially for the newer products, we have to go with a begging bowl to the multinationals. In India’s interest, where I feel that they have a very good case, I go to them with a begging bowl. Where I feel that we can challenge some of the patents, we have challenged them, like what you saw in the case where Cipla was fighting against Novartis (The dispute centred on whether Novartis’ patents should be respected in India, with Novartis losing the case all the way to the Supreme Court). We’ve challenged them where I’ve felt that scientifically we are on the right path.

Excerpted with permission from Leadership To Last: How Great Leaders Leave Legacies Behind, Geoffrey Jones and Tarun Khanna, Penguin Business.