YK Hamied: Cipla's One-Man Army
Image: Dinesh Krishnan
Award: Conscious Capitalist for the Year
Name: YK Hamied, cipla
Why the Company Won: For making AIDS treatment affordable. Cipla made a conscious decision not to profit from anti-AIDS drugs. In 2001, the company took on MNCs by announcing that it would sell its triple cocktail of antiretroviral drugs in developing countries for $350 per patient per year, a fraction of what the MNCs were charging at that time (about $12,000).
Pirate or messiah? Yusuf K Hamied has been called both, depending on which side of the patents protection versus access to affordable drugs debate one is coming from. What no one disputes is that he is one among a very small breed of contrarian leaders.
Every time Hamied’s company Cipla challenges patents of expensive drugs, he comes under fire from big pharma. But that doesn’t bother him. “I am very friendly with some [chief executives of multinationals]. That’s my nature. I don’t fight,” he says.
More than a decade ago, by offering cut-price HIV drugs to Africa, Hamied had forced the multinational pharma companies to reduce their prices in the rest of the world. Today, once again, his defiant, contrarian streak has drawn the battle cry from some multinationals. In May this year, he shook the industry when Cipla slashed prices of some cancer drugs.
Two months earlier, India’s patent office had issued the first compulsory licence to Natco Pharma to make kidney cancer drug Sorafenib by paying royalty to German drug maker Bayer, which holds the patent. (Compulsory licensing is a provision of the Trade Related Intellectual Property Rights agreement under the World Trade Organization. It allows a government to give a licence to a domestic company to produce cheaper generic versions of patented drugs in public interest.)
Cipla went one step further: It had already challenged Bayer’s patent; now it further reduced the price of Sorafenib and two other cancer drugs of the same family. Bayer has challenged the government decision as well as Cipla’s move.
From the outside, it may appear to be a cauldron of court cases bang in the middle of Cipla’s growth story. But for Hamied, 76, it is a matter of principle, a battle against monopoly.
Before he’ll tell you where this will lead to, he wants to talk about where it’s all coming from, about how the thinking on patents has evolved over time.
Back in the 1960s, when he was heading the Indian Drug Manufacturers’ Association, the industry had fought for a change in the patent law, from product patents to process patents. The policy was finally changed in 1972, spurring the Indian pharmaceutical industry to grow from Rs 360 crore to Rs 65,000 crore in 2011.
The next turning point, Hamied recalls, was the Gujral parliamentary committee recommendation of 1993. It advised against treating “importation as working of patents”—meaning, that patents are granted to encourage innovation and not so that the holder enjoys a monopoly. This, in fact, is at the heart of most pharmaceutical court cases today. Then came the Doha declaration of 2001 that gives each member country the right to determine what constitutes a national emergency; 148 countries voted for it, but it hasn’t been ratified till date.
The more recent product patent regime, introduced through the Patents (Amendment) Act 2005, does away with the system of process patents. But the new regime, the industry discovered, was backdated to 1995.
This is retroactive patenting, against WTO principles, says Hamied. “When I argue how you can backdate [legislation], they say it was agreed at the WTO but nobody shows me the proof. I’d like to see the proof as today we are fighting cases that were filed in 1996,” he says defiantly.
His defiance comes from many sources. From the fact that he is a brilliant chemist (he was a student of Nobel laureate Alexander Todd) and voraciously reads to keep up with science. It also comes from his understanding of the market and the IP regime everywhere; and from the fact that he is one of the few business leaders who has public health on top of his mind.
“It takes a lot of b***s to fight big companies. From the net impact point of view, what Hamied has done is legendary,” says Shamnad Basheer, a ministry of HRD professor in IP law at the National University of Juridical Sciences, Kolkata.
While his opponents may accuse him of taking advantage of weak patent laws, Hamied says he never breaks any law. It’s true, says Basheer, whenever the court has restrained him, he has respected the ruling.
Rather, he “does his homework” and uses “loopholes” in existing patents. Take for instance, Tenofovir, the anti-HIV drug for which he fought with Gilead for several years. He won it in 2009 because the drug’s patent was filed in erstwhile Czechoslovakia in 1992 and Cipla proved that it couldn’t be patented in India as prior knowledge existed before 1995. The same logic applied to Roche’s flu drug Tamiflu where Cipla found another patent dating pre-1995.
- Tafe, Mallika Srinivasan: The Tractor Queen
- 5 Years in Frames: Best of Forbes India Photos (2009-2014)
- How Great Leaders See Beyond the Curve
- Dr. Reddy’s Rejuvenation
- TCS' N Chandrasekaran: Planet of the Apps