Cipla's Non-Charity begins (and Ends) Abroad

[Guest guest]

Dear All,

The following is a short article by Finston containing some interesting

points on Cipla's pricing policies globally including deals with the Clinton

Foundation.

It must be noted that Mrs. Finston has worked for several US drug industry

groups (including PhRMA) and from her other work it is clear that she has an

anti-generic industry agenda.

________________

" Cipla's Non-Charity begins (and Ends) Abroad "

" Let the multinationals go. . . We will supply whatever drugs the Thai or other

governments may want. " Cipla CEO Yusuf Hamied, Wall Street Journal, April 24,

2007

Cipla, the Indian generic manufacturer, has earned a reputation as the drug

company with a heart of gold, dedicated to the plight of poor HIV/AIDS patients

in Africa. As is often the case, the truth is more complicated:

* Cipla sells drugs to make money - - it is not a charity.

Cipla's deals, most recently with the J. Clinton Foundation, guarantee

the company large captive markets and comfortable profit margins. ( " Suppliers

like Cipla. . agree to take a " cost-plus " approach, whereby they agree to price

on the basis of an agreed production cost structure plus a reasonable profit

margin. "

<http://allafrica.com/stories/200705080779.html?page=3> Africa: Q & A on

Second-Line HIV/Aids Treatment 8 May 2007, J. Clinton Foundation)

* Cipla's price structure is considerably below any American company,

generic or innovative, and consequently its prices can be much lower and still

profitable.

Remember that Cipla invests nothing in innovative research on new therapies or

even human clinical trials for the existing drugs that it recombines. It relies

on cheap raw active ingredients and the

non-U.S. labor standards (the same that we decry in FTAs), and produces copy-cat

versions of drugs proven successful by innovative companies. (That explains why

Cipla of all large Indian drug companies has been the lone hold-out decrying

patent protection which has brought tremendous opportunities for India's

innovative pharmaceutical companies.)

* In its own back yard, <http://www.avert.org/aidsindia.htm> Cipla

has not extended itself for Indian patients, where only 15% of infected Indians

needing medications received HIV/AIDS therapy by the end of 2006.

According to the <http://content.nejm.org/cgi/content/full/356/12/1197> New

England Journal of Medicine: " A paradox is that Indian companies have become

major suppliers of low-cost generic antiretroviral medications to low- and

middle-income countries in Africa and elsewhere at a time when there are still

major unmet needs for HIV treatment in India. Cipla, a company based in Mumbai,

manufactures the largest range of HIV drugs and has the largest market share.

Cipla exports18 timesas much antiretroviral medication as it sells

domestically. " (emphasis added)

Tata & Sons, The Aditya Birla Group, Ranbaxy and many other Indian

multinationals have well-established, important corporate social

responsibility (CSR) programs that advance India's social and economic

development, including with regard to HIV/AIDS.

Cipla is not one of them, and Yusuf Hamied's sales of HIV/AIDS drugs are part of

a (non-philanthropic) business plan, more PR than CSR.

India's media has long been on to Cipla; in fact I may not have put the pieces

of the puzzle together but for the excellent coverage by publications like

PharmaBiz.

For more on Cipla's profit-taking on HIV/AIDS drugs for Africa while battling

the Indian Government over alleged price gauging for

essential medicines,

<http://www.pharmabiz.com/article/detnews.asp?SecArch= & articleid=12341 & sectionid\

=47> see the PharmaBiz editorial dating back to 2001.

Knowing all of that, Yusuf Hamied's bragging about how Cipla will sell its copy

products to the world doesn't seem quite as special to me.

http://www.policybytes.org/blog/PolicyBytes.nsf/dx/cipla%E2%80%99s-non-charity-b\

egins-and-ends-abroad-.htm?opendocument