India’s patent regime should not change – Cipla CEO

June 17, 2015

By Zeba Siddiqui

Cipla Ltd, founded in 1935 by scientist Khwaja Abdul Hamied, is among India’s oldest pharmaceutical companies. But it made it to the global stage only in 2001, when Hamied’s son offered to make AIDS drugs for less than $1 a day, much to the chagrin of Western multinational firms charging four times that.

Shubhanu Saxena, CEO of Indian generic drugmaker Cipla, poses for a picture in front of company's logo at their headquarters in MumbaiYusuf Hamied went on to build a multi-billion dollar empire by supplying cheaper forms of drugs discovered by large multinational firms to many poor nations, including those in Africa. In 2013, Hamied stepped down from his executive role, and industry analysts have been closely watching Cipla’s strategy under new Chief Executive Subhanu Saxena.

Saxena spoke to Reuters about India’s patent regime (some foreign drugmakers say India’s patent regime is designed to favour the local industry) and the changing market for AIDS tenders. Here are excerpts from the interview:

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Q: India is working on revamping its patents policy, which critics say is because of pressure from large pharmaceutical companies that have been denied patents here recently. Do you think there is a need for change?

A: Every country has the sovereign right to have patent laws that suit their needs, and countries should not shirk from that. I think India has a very good patent regime and it should not change. If you look at a lot of innovation that comes out of companies, it does not add value to patients. So why should you get a patent for it? Let’s put the health of the nation first.

Q: What is your stance on compulsory licensing, given that India granted the first such licence in 2012 and is evaluating whether to grant more drugs such a licence?

A: I think it’s very important governments should have measures such as compulsory licensing and use them. Where companies cannot find a way to provide access, governments have to step in and implement compulsory licensing to ensure patients are not denied. That is probably the one area I would like to see the Indian government use more effectively in the interest of public health. But companies should first work with each other to find a solution to provide access.

Q: Cipla was among a bunch of Indian generic drugmakers who struck a deal in March with U.S. firm Gilead Sciences to sell a cheaper form of its blockbuster hepatitis C drug Sovaldi in 91 poor countries, but some civil society groups have been critical of the deal for excluding countries where the drug is needed. How do you respond?

A: By signing the agreement with Gilead we have already reached 2,000 hepatitis C patients. We are in over 90 countries and we have access to 100 million patients that desperately need the therapy. Let’s get that right first. (Civil society groups) should go and speak to Gilead about the rest, not Cipla. We recently shared our performance with Gilead and I think they are impressed by what Cipla can do.

Q: Will we see Cipla striking a lot more licensing deals with big pharmaceutical companies in the next few years, or standing against them 

Employees and security staff work at the reception area of Cipla at its headquarters in Mumbai

challenging their patents?

A: Cipla is pro patient. If we can do partnerships, we will do those. If partnerships don’t work, we will follow other measures. It’s the right of every company to challenge a frivolous or weak patent, not just in India but in any part of the world. And we don’t do that willy-nilly. It’s only a small part of what we do.
Q: You have been participating in global tenders for AIDS drugs for years, but the market has become more and more crowded. Is it a lot less profitable now?

A: Certainly antiretrovirals (for HIV/AIDS) won’t have the same gross margin as our other products. There is a real question for the global funds, that if they want companies to gear up … then we have to get a good return on investments. There is a balance to be had on how much you can push the margins on antiretrovirals. The discussion we’ve been having with the global funds is that if we can get into longer term commitments, it makes it easier for companies to make investments. It gives us some line of sight to the demand.

(Editing by Tony Tharakan; Follow Zeba on Twitter @zebatweets and Tony @TonyTharakan. This article is website-exclusive and cannot be reproduced without permission)

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