'We have no intentions of selling Cipla'

Q&A: Yusuf K Hamied

Yusuf K Hamied

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.