http://www.wired.com/wired/archive/14.12/indiadrug_pr.html
The Treasure of Mumbai
To Big Pharma, Indian drugmaker Cipla is a pirate operation. To the
developing world, it's a vital medicine chest. And now its cheap pills
are coming to a pharmacy near you.
By Erika Check
FORTY YEARS AGO, A BRITISH COMPANY called ICI Pharmaceuticals
developed a potent high blood pressure medication called propranolol.
It was the first beta blocker, a class of drugs that inhibits
fight-or-flight hormones like adrenaline. But it was expensive. So
Yusuf Hamied, a 34-year-old chemist at an Indian drugmaker, got his
company to start manufacturing a cheaper version. ICI protested to the
Indian government, and Hamied found himself face to face with prime
minister Indira Gandhi. "Should millions of Indians be denied the use
of a lifesaving drug just because the originator doesn't like the
color of our skin?" he asked her.
It was a specious argument – ICI was worried about profits, not skin
color – but Gandhi was persuaded. She urged parliament to change the
laws governing drug patents, making them apply not to the chemical
compounds themselves but to the processes used to manufacture them. If
a company like Hamied's could come up with a different way to make the
same beta blocker (or whatever), it could sell its own version in
India free and clear.
That one law transformed India's pharmaceutical industry. Today,
Hamied's company, Cipla, is the third-largest in India, with sales of
$651 million in 2005. That's not much compared to multibillion-dollar
concerns like GlaxoSmithKline, but Cipla is still the medicine cabinet
to the developing world. As much as 40 percent of the AIDS patients in
poor countries who take medications take Cipla drugs.
What Hamied does is legal in India and the countries where Cipla sells
drugs. But the company is still making copies largely without
permission of the people who hold the patents on the compounds. So to
most of the international pharmaceutical industry, Hamied is a pirate.
He is 70, portly, with white hair and wire-frame glasses. But his
rhetoric is still inflammatory. Pacing around the Cipla boardroom, he
tells the story behind every drug the company makes, punctuating each
anecdote by pulling a box of samples from the floor-to-ceiling
cabinets and throwing it on the table. These are the copied drugs that
earned Cipla its outlaw reputation: anti-cholesterol pills,
antibiotics, AIDS treatments. He tosses in an asthma inhaler and a box
of ciprofloxacin, the powerful antibiotic popular with
bioweapon-fearing Americans.
Hamied made the greatest waves last year, when global fears of a bird
flu pandemic inflated demand for oseltamivir, the only drug thought to
be effective against the disease. Its maker, Switzerland-based Roche
Pharmaceuticals, said it couldn't produce enough. Hamied stepped in,
without a license from Roche, and started manufacturing the drug with
the intention of selling it in countries where Roche didn't hold the
patent – and, though he won't acknowledge it overtly, anywhere else.
As is his style, Hamied made a lot of noise about his planned
defiance. He has built his business on challenging the companies and
patent structures that dominate the global drug market, because it's a
worthy cause and because it's good for his bottom line. Now the Indian
laws that let Hamied get away with all that are changing. In 2005, the
Indian government brought its patent laws in line with those of the
developed world. Indian companies can keep making certain knockoffs,
but they can't copy drugs patented after 1995 without a license. So
Cipla needs a new business model: It's going to sell legal generics to
rich Americans.
BIRDS, LIKE PEOPLE, GET VIRUSES. They get sick, and usually they
recover. They go back to waddling or flying or chirping. But one avian
flu virus breaks the rules. This strain, called H5N1, is a killer – of
birds, certainly, but also of people. Since 2003, more than 250 humans
who work or live with sick birds have caught it, and more than 150 of
them have died. Not a big number, but nearly three out of five, making
H5N1 one of the most efficient viral assassins in the world. Global
public health agencies worry that if it started moving from human to
human, it could lead to a pandemic.
This isn't paranoia. The three flu pandemics of the 20th century
claimed at least 43 million lives – 1918 started as a bird flu, and
both 1957 and 1968 had genetic material from both bird and human
viruses. H5N1 has hopscotched around the globe, from Asia to Europe,
the Middle East, and Africa. But recent research has bred optimism.
Turns out, H5N1 infections settle deeper in the lungs than other kinds
of influenza. The usual coughing doesn't aerosolize virus particles,
making it harder for people to give it to one another. And the virus
doesn't seem to pick up new genetic traits as readily as some bugs,
which is good news if you're worried about killer mutants.
Nevertheless, the World Health Organization has recommended that
nations stockpile drugs thought to work against avian flu.
There aren't a lot of choices. Oseltamivir, an antiviral manufactured
by Roche under the trade name Tamiflu, is the best bet. But at the
time of the 2005 southeast Asian outbreak it cost $60 for a five-day
course of treatment, far too pricey for developing countries like
Vietnam, where bird flu hit hardest. Wealthy nations couldn't get
their hands on the drug either: Even though it quadrupled production
during the outbreak, Roche had a backlog of orders at least a year
long. Company spokespeople said they were at maximum output, due in
part to a worldwide shortage of star anise, a key ingredient of
oseltamivir. Furthermore, Roche wouldn't license the drug to other
companies. The company claimed other drugmakers would have a hard time
starting their own pipelines because synthesis of the drug was
complicated and dangerous, requiring the use of an explosive chemical.
Another firm would take two or three years just to figure out how to
do it.
Nonsense, thought Hamied. One of his competitors in India, a company
called Hetero, was already quietly making its own unlicensed
oseltamivir knockoff, and Cipla was producing drugs with the explosive
intermediate chemical Roche was so worried about. Hamied went shopping
for star anise, and found that while it wasn't cheap, it was
available. He bought a few tons and set his chemists to work
reverse-engineering the drug. "Right or wrong, we're going to
commercialize and make oseltamivir," Hamied told The New York Times in
October 2005. When bird flu hit India four months later, Hetero had
700,000 doses ready. And Cipla, Hamied said, had 10,000 and was geared
up to crank out 100,000 a week. "It wasn't all that difficult," Hamied
says. "I think Roche had been dishonest."
Roche, for its part, denies that it had a problem with the Tamiflu
supply. Spokesperson Terry Hurley insists that the company didn't have
a backlog but instead "implemented a proactive inventory management
plan." And it wasn't trying to block other manufacturers or hoard its
intellectual property, either. "Roche has involved contract
manufacturers into its supply chain to increase global Tamiflu
production capacity," Hurley says. "This demonstrates that it's
possible to collaborate with third parties and respect IP rights at
the same time."
In the past decade, Cipla has been at the center of nearly every
international health panic involving a patented medicine. Five years
ago, Hamied defied patents and international law regarding
antiretroviral medications, the drugs used to fight AIDS. When pharma
firms refused to cut prices, he announced he'd make the "AIDS
cocktail" for a dollar a day. Hamied also combined three medicines,
each made by a separate company, into a single pill, making it easier
for patients to stay on their treatments.
Big Pharma fights pretty hard to get countries to outlaw Cipla-like
behavior, but the industry also knows that governments can change all
the rules in times of crisis. "Compulsory licenses" allow companies to
make drugs even if they don't own the patents, or compel the
originating firm to ramp up production. Often all it takes is the
threat of a compulsory license to get the actual patentholder to
increase output. And in general, when small-timers like Cipla stay in
their own (poor) backyard, the big manufacturers pay little attention.
Oseltamivir was different. Even though European and North American
countries could afford the drug, there was none available. Hamied
couldn't legally sell it to them. Yet he talked to The New York Times
to ensure everyone knew he had it. Hamied's $20 million oseltamivir
project wasn't a charity mission. It was a calculated gamble that a
flu pandemic would hit before Roche could fill its orders. "If there
was a pandemic, and the Americans fell short of the drug, would they
come to me to buy?" he asks. Bird flu didn't turn into a pandemic last
year, but governments tasted panic – and Hamied figured they'd be
ready to buy from him or anyone else who had it to sell.
Roche denies that the prospect of competition had any impact; the
company was granting manufacturing licenses to Vietnam and China
before Hamied's announcement. Soon after, it granted one to Hetero in
India. Nevertheless, Hamied says that getting involved in the fight
against bird flu "had much more impact than what we did five years ago
on HIV/AIDS, because at that time HIV/AIDS was regarded as the black
man's disease. But now I was talking about a white man's disease."
HAMIED'S FATHER, A CHEMIST and an Indian nationalist, founded Cipla in
1935, when there wasn't a single pharmaceutical company in the
country. It was a nation-building project; Hamied the elder wanted to
do everything he could to make India self-sufficient. His timing was
perfect. Embroiled in World War II, Great Britain asked its colonies
for help, and Cipla gladly began churning out medicines for the war
effort.
Hamied says his father never pushed him to carry on the legacy. He
went to Cambridge to study chemistry anyway. At graduation, he was
offered a fellowship. "There were many chemists much, much better than
me, and I could not compete intellectually," Hamied says. "There was
no point in following an academic career." He flew back to India and
took a research job at Cipla.
As Hamied grew older, he developed a more complicated relationship
with his homeland. His father, devout in his patriotism, linked
Cipla's fortunes to India's. But Hamied is often perplexed and
saddened by India today – by the sectarian violence, for example, that
periodically engulfs Mumbai. In fact, he and his wife have what's
called nonresident Indian status, which requires them to live outside
of the country for six months a year. (They spend the time in Europe
and Mauritius.) It also happens to give them a nice tax break.
It's exactly that fiscal pragmatism that brought Bill Clinton to
Hamied. When the Clinton Foundation was looking for a pharmaceutical
partner in its attempts to bring AIDS drugs to Africa, Cipla was an
obvious choice. "I say this with complete respect," says Anil Soni,
who works on the Clinton Foundation's HIV/AIDS initiative. "Hamied is
not an AIDS activist. He's a businessman. He has a deep personal
commitment to providing antiretroviral drugs at a price that is
sustainable for him and his company, but that is a part of his
business."
And it's as a businessman that Hamied feels the lopsidedness of the
way drug patents work around the world. In the US and many other
countries, new drugs are patent-protected for 20 years. When a company
wants intellectual property protection in a new country, it needs a
patent there, too. After 20 years, any company can start making its
own version, called a generic.
In practice, makers like Cipla often manufacture and sell drugs owned
by other companies in countries where the patents aren't enforced.
Pharmaceutical giants like Roche or GlaxoSmithKline see that as pirate
behavior, arguing that if you start messing around with the patent
system, you take away their profit incentive to invent new medicines.
According to a 2003 study in the Journal of Health Economics, it can
take 12 years and $800 million to discover one novel drug.
But the truth is that Big Pharma hardly innovates at all these days.
It uses the profits from its patents to market existing drugs and buy
new ideas from academic researchers or smaller firms. According to the
consultancy Strategic Decisions Group, "40 to 50 percent of products
in development by global pharmaceutical firms are externally sourced."
Oseltamivir, for example, was invented not at Roche but at a small
biotech company called Gilead. Roche then bought the rights to make
(and market) it. In 2004, just 36 new drugs were approved by the US
Food and Drug Administration – down from a peak of 53 in 1996. So
drugmakers have devised an arsenal of tactics for extending the life
of their patents: Altered dosages, different combinations of meds, and
novel uses for existing drugs all keep aging medications under patent
– and profitable – by qualifying as new versions of old meds. That
staves off competition from generics.
Hamied doesn't consider himself a pirate. "Cipla never breaks the
law," he says. "It lives by the law of the land it is working with."
But he doesn't deny that he feels the system favors the rich and the
Western. "The third world cannot afford the prices of medications that
are prevailing in the first world," Hamied says. "So don't talk about
patents in isolation. Talk about access to medicine at affordable
prices."
That's what happened after Cipla's flirtation with oseltamivir. Rich
nations – the ones responsible for propping up the current patent
system – came to see the risks of the legal monopolies. In May, the
member states of the World Health Organization passed a resolution
expressing concern about the "impact of high prices of medicines on
access to treatment." The resolution also declared that patents aren't
helping poor patients get new medicines.
It sounds like a bureaucratic victory at best. Cipla didn't come out a
winner. ("We have large stocks of oseltamivir, but no customers,"
Hamied says. "It was a good humanitarian gesture, but in retrospect,
it was a big mistake.") But for public health advocates and patent
activists it was huge. Developed countries had previously blocked any
attempt to get the WHO to take a stand on patents. But the May
resolution passed because Big Pharma's traditional supporters like the
US backed it – even they are starting to question patent laws. "People
are beginning to see that this is not a problem of very poor countries
not being able to afford medicines," says Ellen 't Hoen, policy
director of the Campaign for Access to Essential Medicines at Doctors
Without Borders. "It's a question of who controls what and who has
access to what, and that goes beyond developing countries."
ONE OF CIPLA'S MANUFACTURING facilities is in Pune, 100 miles east of
Mumbai. It's a clean, manicured oasis amid blasted red-dirt scrubland,
the air scented sweet and toxic by a nearby petrochemical plant. In
the main building, a vast, sparkling room houses seven massive
stainless steel vessels, looking like submarines that have dived
halfway into the floor. A tangle of color-coded pipes and hoses is
connected to each. The entire room hums and groans with the sounds of
industrial motors and pumps.
Inside one of the vessels, thousands of gallons of clear liquid froth
and swirl. This is pure sertraline – an antidepressant sold in the US
under the brand name Zoloft. Hamied's is a generic that will
eventually be dried, shipped to the US, pressed into pills, and
legally sold to sad Americans.
Next door, massive sifters are processing thousands of pounds of
sildenafil citrate. Hamied markets it as Erecto; you probably know it
as Viagra. Nobody has a patent on it in India yet, so it's legal for
him to make – he just can't sell it in, say, the US. In the packaging
department downstairs, a dozen women are assembling white cardboard
boxes like the ones Hamied threw around his conference room, filling
them with pills to treat yeast infections. They're generics, too –
legal, and destined for US pharmacies.
These are not exactly the drugs that are going to save humanity. But
they might save Cipla. This year, 50 percent of its sales came from
exports – up 44 percent from the year before. And Hamied predicts that
exports will keep growing. Brand-name drugs cost too much for even
patients in the US. "What is the frightening scenario for America, and
also a very interesting scenario for America, is the fact that if more
and more companies enter the American generic market, the local
generic industry will die," Hamied says. "And the people in Medicare
and the old-age pensioners will benefit." Forget copycatting; the real
action is in legitimate generics sold back to a drug-hungry West.
That's convenient, because just as Hamied is winning abroad, he is
losing at home, now that India has closed the loophole that Indira
Gandhi had opened. The government wants the country to join the World
Trade Organization, and current members – under pressure from
pharmaceutical companies – made the change a precondition. It's
illegal to copy newly patented drugs in India. International do-gooder
organizations protested the change, concerned that the new law would
mean the end of affordable drugs for India and other poor nations.
"This is a disaster for the common man," Hamied says. And for Cipla,
unless it can start making big-ticket generics for sale abroad.
Hamied's competitors in India have vowed to expand their R&D to
compete with Big Pharma. But Hamied doesn't think it'll work. Western
drug companies feed off massive federal research grants that the
Indian government couldn't possibly match. The future, Hamied says, is
legal, licensed drugs.
Well, mostly legal. At Hamied's factory, a full ton of powdered
oseltamivir is stashed in plastic drums. A Cipla manager proudly
brandishes the tangible proof behind his boss's bluster: a plastic
baggie heavy with the stuff. He says he watches the news daily for
updates. If a pandemic hits, what does he think the Americans will do?
"We are waiting," the manager says with a smile.
Erika Check ([EMAIL PROTECTED]) is a reporter for Nature in San Francisco.
--
Homer: He has all the money in the world, but there's one thing he can't buy.
Marge: What's that?
Homer: (pause) A dinosaur.
-- Homer J. Simpson
Sudhakar Chandra Slacker Without Borders
