How An Indian Tycoon Fought Big Pharma To Sell AIDS Drugs For $1 A Day

Dr. Yusuf Hamied of Cipla was a prolific reader of medical journals, with an annual subscription budget that topped $150,000 (Rs1 crore at current rates).

One day in 1986, he was introduced to something he knew nothing about. A colleague mentioned, “According to the Tufts report, AZT is the only drug available for AIDS.” “What is AIDS?” Hamied responded.

At the time of Hamied’s question, the disease had barely surfaced in most of India. But it was brewing so forcefully in Bombay’s red-light district, not far from Cipla’s headquarters, that within a few years the city would earn the moniker “AIDS capital of India.”

In 1991, Rama Rao, the research head of an Indian government laboratory, told Hamied that he had developed a chemical synthesis of AZT, or azidothymidine, and wanted Cipla to manufacture it.

Even that was well beyond what most Indians could afford. “Our sales were zero,” Hamied recalled. At that point, Hamied asked the government if it could purchase and distribute the drug. But the Indian government refused: it had money only for detection and prevention, not treatment. In total disgust, Hamied ended up discarding 200,000 capsules.

A few years later, he read in a medical journal that a cocktail of three drugs called HAART (highly active anti-retroviral therapy) was effective in controlling AIDS. The three drugs in question—stavudine, lamivudine, and nevirapine—were made by three different multinational drug companies.

The combined price for a single patient reached $12,000 a year. Hamied immediately set out to make the drugs in the cocktail.

The new law sparked a furious reaction from Big Pharma. Fearing a domino effect, thirty-nine international brand-name drug companies, with the support of the US government, sued South Africa, claiming that the new health law violated an international trade agreement called TRIPS (Trade-related Aspects of Intellectual Property Rights).

It was a deadly global stalemate. As drug companies skirmished over intellectual property, 24 million people got sicker, with no foreseeable access to the affordable medicine they so desperately needed.

On Aug. 8, 2000, Hamied got a call from an activist in the United States whom he had never met. “Me and some of my colleagues would like to come see you,” said the man on the phone. It was William F Haddad, a former investigative journalist who had campaigned so vigorously for the Hatch-Waxman Act, the law that launched the US generic drug industry.

The colleagues Haddad referred to were a motley group of activists who had banded together in pursuit of a single objective—to find a way to get affordable AIDS medicine to those who needed it most, free from the stranglehold of patents.

An extraordinary alliance

Four days after contacting Hamied, Bill Haddad, Jamie Love (an intellectual- property activist), and three others, including a French doctor with the group Doctors Without Borders, arrived at the elegant London duplex where Hamied sat out the brutal Indian summer.

He led them up the stairs to a glass dining table. They asked him: how low could he price the AIDS cocktail, and how much of it could he make? As they spoke, Hamied scrawled calculations with a pencil and paper. He concluded that he could cut his price by more than half, to about $800 a year.

The men talked into the night, and the group vowed that they would support Hamied in the inevitable battles with the multinational drug companies that lay ahead.

Together, an Indian drug maker and international activists had forged an extraordinary alliance, pledging to upend the established global commercial and pharmaceutical order in order to save millions of lives.

About a month later, in part through their efforts, Hamied received an invitation to speak at the European Commission’s conference in Brussels on HIV/AIDS, malaria, tuberculosis, and poverty reduction. On Sept. 28, 2000, he took to the podium and looked out over the gathering of staid, sceptical, and white, Europeans, who included health ministers, ex–prime ministers, and representatives of multinational drug companies.

“Friends,” he told the unfriendly group, “I represent the needs and aspirations of the third world.” He then proceeded to unveil three offers: he would sell the AIDS cocktail for $800 a year ($600 to governments buying in bulk); give the technology to make the drugs free to any African government willing to produce its own drugs; and provide nevirapine, the drug that limited transmission of the disease from mother to child, for free.

He closed with a challenge: “We call upon the participants of this conference to do what their conscience dictates.”

No one took him up on his proposal. The global pharmaceutical marketplace was intersected by patents and trade agreements, which precluded many countries from reaching out for cheap medicine.

But the other problem was credibility.

Much of the world viewed Indian generics as poor-quality knockoffs, a perception that Hamied had laboured against for years.

He decided then that he could not simply wait for governments to take him up on the offer he’d made in Brussels. Just as he was pondering his next steps, the way forward presented itself.

William Haddad called Hamied back, this time with a specific question. Would Cipla be able to offer the AIDS cocktail for $1 a day? After some back-of-the-envelope calculations, Hamied agreed. He would offer the price exclusively to Doctors Without Borders. It was a number low enough to be world-changing.

On Feb. 6, 2001, at around midnight, Hamied was at a dinner party in Mumbai when his cell phone rang. The caller was the New York Times reporter Donald McNeil. “Dr. Hamied, is it true you offered $1 a day (to Doctors Without Borders)?” McNeil asked him.

Once Hamied confirmed this, McNeil laughed aloud: “Dr. Hamied, your life will not be the same from tomorrow.” McNeil’s story was published the next morning on the front page of the Times.

Fighting the giants

According to the article, Cipla was offering to sell the AIDS cocktail for $350 a year per patient, or roughly $1 a day, as compared to Western prices of between $10,000 and $15,000 a year, but was being blocked by the multinational drug makers that held the patents, who were being backed by the Bush administration.

News of Big Pharma’s patent protection efforts in the face of the global pandemic and the Bush administration’s support of them sparked international outrage and stoked street protests from Philadelphia to Pretoria, even accusations of genocide.

The result was a PR debacle for Big Pharma. Even among the industry’s lowest moments, its stance in South Africa seemed uniquely horrible.

As GlaxoSmithKline’s CEO Jean-Pierre Garnier declared of Cipla and the Indian generics companies at a 2001 health care forum, “They are pirates. That’s about what they are. They have never done a day of research in their lives.”

Some in Big Pharma accused Hamied of trying to grab market share in Africa, to which he responded: “I am accused of having an ulterior motive. Of course I have an ulterior motive: before I die, I want to do some good.”

Hamied and the activists prevailed. The following month, the multinational drug companies announced that they would drop their lawsuit in South Africa and waive their patents so that generic fixed-dose combinations of the AIDS cocktail could be sold cheaply in Africa.

However, it was the $1 a day figure that changed the calculus of the West—from “we can’t afford to help,” to “we can’t afford not to.” – Quartz India

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