http://rfrost.people.si.umich.edu/c...llecProp/Indian_Pharm_%5Bnon-]patents.pdf
"December 1, 2000
MEDICINE MERCHANTS / Pirated Pills
Selling Cheap 'Generic' Drugs, India's
Copycats Irk Industry
By DONALD G. McNEIL Jr.
BOMBAY — To anyone else, the room looks like the unprepossessing office of a college science teacher.
But to the multinational pharmaceutical giants, it is the lair of a pirate king.
Grinning proudly, he brandishes his trustiest weapon, the scribbled notebooks he has kept since his days as a chemistry student at Cambridge in the 1950's. Page upon page is filled with dainty hand-sketched lattices representing carbon rings: new molecules being tested in the West.
They are the blueprints for plunder that the pirate has gleaned from his magazine subscriptions; his budget for pharmaceutical and medical journals is $150,000 a year.
And just downstairs in the conference room is his treasure hoard, glittering with the pinks and greens of tiny pills, the sheen of gelatin capsules, the sharp glint of injection ampuls.
In the room's glass cabinets are the 400 drugs made by his company, Cipla Ltd. They include Erecto, the company's knockoff of Viagra; Nuzac, its knockoff of Prozac; Forcan, its knockoff of the antifungal drug Diflucan; Lomac, its knockoff of the ulcer drug Prilosec; Amlopres, its knockoff of the hypertension drug Norvasc.
Some of these compounds make $1 billion or more a year for the Western companies that hold the patents on them. But not here. They are sold by Cipla at one- twentieth to one-fiftieth of the price paid in the United States.
And they are all perfectly legal, at least under Indian law.
"We did a little study," Yusuf K. Hamied, Cipla's managing director and India's most outspoken buccaneer, said during a tour of his headquarters. "Our turnover is $200 million. If we sold our products at the American-originator prices, our turnover would be $4 billion."
To pharmaceutical giants like Pfizer, Glaxo Wellcome and Aventis, which invest billions of dollars in research, Dr. Hamied embodies the enemy.
Under Indian law, only manufacturing processes, not the products themselves, are covered by patents. So Indian drug companies can boldly reverse-engineer best-selling drugs and sell copies cheaply. "I make every Pfizer product," Mr. Hamied boasted.
The Pharmaceutical Research and Manufacturers of America, or PhRMA, which represents the United States industry, says Indian patent law is "designed to punish importers of patented technology into India and to coerce local production."
It calls India's licensing practices "infamous" and says the experience of some American drug makers "has been so negative that most companies have abandoned efforts to obtain or enforce patents in India."
Exactly how much money Western pharmaceutical manufacturers lose in India and other countries like Brazil, Argentina, Thailand, Egypt and China that fly the Jolly Roger of drug piracy is in dispute. Annual world sales of drugs amount to about $400 billion, and some executives claim that a tenth of that, $40 billion, is lost.
But it is also true that Western drug companies would sell very little in the developing world at the prices they charge Americans and Europeans. Harvey E. Bale Jr., director general of the International Federation of Pharmaceutical Manufacturers Associations, a Geneva-based industry trade group, put the total of lost sales at about $3 billion.
A PhRMA study released in February found that losses in India were $69 million a year, but it covered just 20 common knockoff drugs. Mr. Bale said the total loss figure for India was probably $100 million a year.
Semantics and Ethics
Iain Cockburn, a professor of management at Boston University who has studied the issue, says there are serious problems with pirates, because some make weak or even toxic counterfeits. Also, some powerful compounds, anti-AIDS drugs for example, must be taken on
a rigorous schedule under careful monitoring, yet knockoff drugs may be shipped to impoverished countries where a steady supply and satisfactory medical supervision cannot be assured.
But apart from those concerns, he said, Western drug companies "just don't like the idea that their proprietary rights can be got around via the back door."
"That's the bottom line," Professor Cockburn continued. "It's a threat to the business model."
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