'We have no intentions of selling Cipla'

[Guest guest]

'We have no intentions of selling Cipla'

Q & A: Yusuf K Hamied

C H Unnikrishnan / Mumbai December 9, 2005

Yusuf K Hamied, chairman and managing director, Cipla wants to put

an end to rumours that multinational giants are in talks with the

pharma company to acquire it. In an interview with Business

Standard, Hamied emphasises the importance of international

collaborations and partnerships for Indian pharma companies to grow

in the global market space, but insists that Cipla's dealings with

multinational companies has so far not gone beyond such

collaborations. Excerpts:

There are strong rumours that multinational pharma firms are in

talks with Cipla for a complete acquisition. Even names like Teva,

Pfizer, Sandoz and Ranbaxy were making the rounds. Is there any

basis for such rumours?

As matters stand today, we have no intention of selling the company.

These all are quite speculative and have no substance. I have not

been talking to any of these companies and I'm sure, it will not

happen in my life time. At the same time, national as well as

international business collaborations are crucial for Indian pharma

companies to sustain growth in the domestic and global market space.

However, we cannot predict the future situation at this point of

time.

Cipla has strategic alliances with global generic companies — Ivax

as well as Teva. Has the recent acquisition of Ivax by Teva had an

impact on Cipla's partnerships with these companies?

Though our company had alliances with both these entities, the

acquisition deal and the consolidation process between these two

have not made any impact on Cipla yet.

Cipla has announced that it would go ahead with the production of

avian flu drugs to fight a possible pandemic. Since there is patent

protection on one of these drugs, how would you go about it?

Since the currently available drugs to treat the avian flu have not

yet been granted patents in India, nobody can stop any generic

manufacturers from producing it in the country. So Cipla is readying

for the production of Oseltamivir as well as Zanamivir in India. The

company is currently in the process of preparing bioequivalence

studies and will get necessary approvals from the regulators.

The company will make the drugs available for Indian patients as

well as patients in all the least developed countries, where there

is no patent regulation yet, at the time of an outbreak. I wish such

a situation would not arise. However, we'll keep the stocks ready.

Cipla made successful moves to lower the prices of HIV/AIDS drugs

globally by introducing cheaper generics despite pressure from

multinationals. There has been criticism that the company will

capture a sizeable market for its generic drugs in those markets.

How do you respond to this?

Cipla's move has been a part of its commitment to the population of

India and it is the same with any other poor country which cannot

afford the high drug prices fixed by multinationals, who enjoy a

monopoly in the name of patent protection. In India, healthcare is

in a state of perpetual crisis as the disease profile is frightening

here. Same is the case with many of the poor countries. It was a

bold step on our part to announce a major price reduction for our

triple drug cocktail Triomune — at below $1 per patient. However,

the multinationals are now on the defensive. Apart from lowering

their prices, they accused us of not having WHO approval for our

anti-AIDS drugs. But within a relatively short time, a number of

anti-retroviral drugs and three of our factories got WHO

qualification.

Do you support the Intellectual Property Rights (IPR) regime in

India?

We respect patents. But it should not lead to a monopoly as the

country cannot afford to have such a situation, at least in the case

of medicines. What we want is a permanent compulsory licensing

system to ward off monopoly. This will allow generic drug companies

to produce the drug by paying a royalty, for the benefit of the

large majority of the Indian population. Cipla believes in that and

it is ready to pay 4 per cent royalty to the originator. The bird

flu threat has, in fact, given the country an opportunity to take

hard look on how it wants to implement the product patent regime

that has now became effective here.

When Novartis was granted the exclusive marketing right (EMR) for

its anti-cancer drug Glivac, despite the lack of clarity on the

claims of the originator, generic companies, including Cipla, had to

withdraw their generics from the market. Do you foresee the same

kind of situation in the post-IPR regime when patents are granted on

such borderline cases?

Imatinib was apparently a borderline case. So the government should

not have granted the EMR. As the drug had a patent granted pre-1995,

it didn't deserved the grant of patent in India as per the current

IPR law. Following the exclusive marketing right (EMR) granted to

Novartis, the generic players had to withdraw their cheaper

versions, leaving thousands of poor patients in the lurch. It should

not happen. Using the opportunities such as pre- and even post-grant

oppositions, generic companies should come forward to prevent such

non-deserving candidates from obtaining patent protection, for

safeguarding public health.

What are your growth strategies for Cipla, including future

investments?

The company has plans to invest about Rs 300 crore towards capacity

expansion at all its facilities in Baddi, Patalganga, Kurkumbh and

so on. The facilities will be upgraded in view of the stringent

requirements of the global market. The company expected to clock a

15-per cent growth in sales in the financial year 2006. Profits will

be in line with the previous year. Exports will be a thrust area for

Cipla in future. We currently spend about 4 per cent of our turnover

on research and development and it will go up significantly in the

coming years.

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