Cost a bitter pill to swallow

PUBLISHED : Tuesday, 31 July, 2012, 12:00am
UPDATED : Tuesday, 31 July, 2012, 12:00am


A few months ago, Arun Bharati, 18, walked into the state-run All India Institute of Medical Sciences in New Delhi with his father, a farm labourer in eastern Bihar state.

The doctor diagnosed Hodgkin's lymphoma and said the drugs would cost 300,000 rupees (HK$42,000) a month. Bharati's father earns just a few dollars a month.

That night, father and son caught the overnight train home to their village where they broke the news to the family. A week later, unable to cope with not being able to afford the drugs, the father committed suicide by swallowing pesticide.

Harmala Gupta, a cancer survivor and head of the voluntary group CanSupport, comes across many such cases every month - not necessarily of suicide but of families devastated by the cost of cancer drugs. According to World Health Organisation figures, 2.5 million Indians are diagnosed with cancer every year.

'The first question patients ask doctors is how much the treatment will cost,' says Gupta. 'The middle class run around borrowing from relatives, selling their property and jewellery and bankrupting themselves. The poor walk out of the hospital and you never see them again.'

This mental agony, exacerbating the physical pain, is something Dr Yusuf Khwaja Hamied, chairman of Indian generic drugs giant Cipla, saw in Aids patients in India and Africa. Knowing that people were dying despite the existence of drugs that could help them was, to him, devastating.

In 2001, the Cambridge-educated multimillionaire sent tremors through the boardrooms of every multinational drug maker when he offered an affordable Aids treatment option. Hamied slashed the price of life-saving triple therapy Aids drug cocktails from US$10,000 per person per year to US$150. He could do this because making the drug at his Goa plant - which is approved by the US Food and Drug Administration - is cheaper than making it elsewhere.

An estimated seven million Africans have been treated with Cipla Aids drugs (now even cheaper at US$80 a year), making the Cipla name a legend in Africa.

'Reducing the price of Aids drugs gave me so much satisfaction that I've been thinking of what else I can do,' Hamied says.

His next target: cancer. In May, Cipla cut the price of its generic drugs for lung, brain and kidney cancer by 75 per cent.

'This decision by Cipla is a great gift to cancer patients,' says New Delhi oncologist Bhavna Sirohi.

Manufacturers of generic drugs

such as Cipla have given India the name 'pharmacy of the developing world' for making low cost, high-quality generic drugs that have saved or prolonged millions of lives. International aid organisations buy these drugs and supply them to Africa and other countries.

The Indian generic drugs revolution began in 1972 when India passed a law allowing medicines to be copied even if under patent, provided the process was not the same. It led to the creation of hundreds companies making generic drugs.

But in 2005, in a move that Hamied calls 'disastrous', India signed the intellectual property agreement Trips (Trade Related Intellectual Property), which requires every nation to protect patents on new drugs for 20 years.

'With a population of 1.3 billion, India can't afford a monopoly in health care. Monopolies lead to higher prices and we can't allow them in a country with so much poverty and misery,' says Hamied, who runs a free cancer hospital in Pune, western India.

The only redeeming feature of TRIPS is that it allows governments the option of 'compulsory licensing' - granting a licence to a domestic drug company, without the consent of the patent owner, permitting it to produce a generic version if it is in 'the public interest'.

The drawback is that applying for this licence is a cumbersome process. Hamied has been pushing the government to allow the widespread use of licences for the production of life-saving patented drugs for the benefit of the poor.

In March, New Delhi granted its first compulsory licence, allowing domestic drug company Natco Pharma to make Nexavar available to cancer patients for a fraction of the price of Bayer's version.

In keeping with Trips rules, Natco Pharma will pay Bayer 6 per cent in royalties. There were howls of protest from Western drug giants. 'If compulsory licences are misused, the research and innovation being done to save future lives will be in danger and will harm patients,' says Ranjit Shahani, head of the Organisation of Pharmaceutical Producers of India, which represents foreign drug makers.

Indian Commerce Minister Anand Sharma defended the move, saying millions of Indians were dying because they could not afford the branded Nexavar. Bayer is suing India's patent office.

While the drugs giants condemn Hamied for being a 'pirate', he is unperturbed. 'Western multinationals do not understand what it means to be poor in a developing country and unable to afford drugs,' he says.

He says India should have a 'permanent compulsory licensing' system for drugs. 'We can follow Canada's example. From 1969 to 1992, Canada copied any drug or product it liked, provided it paid a 4 per cent royalty to the patent holder. No multinational protested. If this system was good enough for Canada, it should be good enough for us,' he says.

Hamied has a family history to live up to. His father, Khwaja Abdul Hamied, set up Cipla in 1935. During the second world war, as demand for medicines from the Indian army surged and supplies from Europe's drug makers collapsed, Cipla provided quinine to treat malaria and injections for dysentery.

The government seems to be listening. The Planning Commission has called for more compulsory licences to be issued for patented and expensive drugs so that India can build up its 'drug security'.

The government has instigated a US$5.4 billion plan to provide free generic medicine. From November, state institutions will be able to prescribe them to all patients. Those who prescribe branded drugs will face punishment.


From November, India's state institutions will be providing free generic drugs to all patients in a programme costing this many US dollars